**Exhibit10.2**

** **

**AVAYAINC. 2004 LONG TERM INCENTIVE PLAN**

**as amended effective**

**May 3, 2007**

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AVAYA INC. 2004 LONG TERMINCENTIVE PLAN

### **Article 1 — Background and Purpose**

This is the amended andrestated Avaya Inc. Long Term Incentive Plan for Management Employees (the “PriorPlan”), which, among other things, has been amended and restated to includeprovisions relating to Awards to Non-Employee Directors.  Pursuant to the terms of this document, thisamended and restated plan shall be called the Avaya Inc. 2004 Long TermIncentive Plan.

The purpose of this Planis to enhance shareholder value by reinforcing the Company’s efforts tomotivate Employees to contribute to the Company’s growth and performance andenabling the Company to attract and retain individuals of exceptionalmanagerial talent upon whom, in large measure, the sustained progress, growthand profitability of the Company depend. In addition, the Plan is designed toattract and retain qualified persons to serve as directors, to enhance theequity interest of directors in the Company, and to solidify the commoninterests of its directors and shareholders in enhancing the value of theCompany’s common stock.  The Plan seeksto encourage the highest level of director performance by providing directorswith a proprietary interest in the Company’s performance and progress.

### **Article 2 — Definitions**

For the purposes of thisPlan, the following words shall have the meanings ascribed to them below:

**(a)****                                  Affiliate**

Any(i) Person that directly or through one or more intermediaries, controls, or iscontrolled by, or is under common control with, the Company or (ii) entity inwhich the Company has a significant equity interest, as determined by theCommittee.

**(b)****                                  AnnualMeeting**

TheCompany’s annual, general meeting of shareholders.

**(c)****                                  AnnualTerm**

Eachtwelve calendar-month period beginning on March 1, 2004 and each March 1thereafter.

**(d)****                                  Award**

Any Option, StockAppreciation Right, Restricted Stock Award, Performance Award, DividendEquivalent, Other Stock Unit Award, Substitute Award, Stock Retainer or anyother right, interest, or option relating to Shares or other securities of theCompany granted pursuant to the provisions of the Plan.

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| **(e)**    | **Award Agreement**                                                                                                                                                                                                                                          |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** **                                                                                                                                                                                                                                                   |
|       | The written agreement, contract or other instrument  or document provided by the Company to evidence an Award and signed by both  the Company and the Participant, or such other documentation in such form as  the Committee may from time to time approve. |
|       |                                                                                                                                                                                                                                                         |
| **(f)**    | **Board**                                                                                                                                                                                                                                                    |
| ** ** | ** **                                                                                                                                                                                                                                                   |
|       | The Board of Directors of the Company.                                                                                                                                                                                                                       |
|       |                                                                                                                                                                                                                                                         |
| **(g)**    | **Business Day**                                                                                                                                                                                                                                             |
| ** ** | ** **                                                                                                                                                                                                                                                   |
|       | Any day on which the New York Stock Exchange is open  for transaction of business.                                                                                                                                                                           |
|       |                                                                                                                                                                                                                                                         |
| **(h)**    | **Change in Control**                                                                                                                                                                                                                                        |
| ** ** | ** **                                                                                                                                                                                                                                                   |
|       | The happening of any of the following events:                                                                                                                                                                                                                |

 

(i) 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 theExchange Act) of 50% or more of either (A) the then outstanding shares ofcommon stock of the Company (the “Outstanding Company Common Stock”) or (B) thecombined voting power of the then outstanding voting securities of the Companyentitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”); excluding, however, the following: (1) anyacquisition directly from the Company, other than an acquisition by virtue ofthe exercise of a conversion privilege unless the security so being convertedwas itself acquired directly from the Company, (2) any acquisition by theCompany, (3) any acquisition by any employee benefit plan (or related trust)sponsored or maintained by the Company or any corporation controlled by theCompany, or (4) any acquisition by any corporation pursuant to a transactionwhich complies with clauses (A), (B) and (C) of subsection (iii) of thisArticle 2(g); or

(ii) A change in the composition of the Board suchthat the individuals who, as of the Effective Date, constitute the Board (suchBoard shall be hereinafter referred to as the “Incumbent Board”) cease for anyreason  to constitute at least a majorityof the Board; provided, however, that for purposes of thisdefinition, any individual who becomes a member of the Board subsequent to theEffective Date, whose election, or nomination for election by the Company’sstockholders, was approved by a vote of at least a majority of thoseindividuals who are members of the Board and who were also members of theIncumbent Board (or deemed to be such pursuant to this proviso) shall beconsidered as though such individual were a member of the Incumbent Board; and provided,furtherhowever, that any such individual whose initialassumption of office occurs as a result of or in connection with either anactual or threatened election contest 

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(as such terms are used in Rule 14a-11 of Regulation 14A promulgatedunder the Exchange Act) or other actual or threatened solicitation of proxiesor consents by or on behalf of an Entity other than the Board shall not be soconsidered as a member of the Incumbent Board; or

(iii) The approval by the stockholders of the Companyof a merger, reorganization or consolidation or sale or other disposition ofall or substantially all of the assets of the Company (each, a “CorporateTransaction”) or, if consummation of such Corporate Transaction is subject, atthe time of such approval by stockholders, to the consent of any government orgovernmental agency, the obtaining of such consent (either explicitly orimplicitly by consummation); excluding however, such a Corporate Transactionpursuant to which (A) all or substantially all of the individuals and entitieswho are beneficial owners, respectively, of the Outstanding Company Stock and OutstandingCompany Voting Securities immediately prior to such Corporate Transaction willbeneficially own, directly or indirectly, more than 60% of, respectively, theoutstanding shares of common stock, and the combined voting power of the thenoutstanding voting securities entitled to vote generally in the election ofdirectors, as the case may be, of the corporation resulting from such CorporateTransaction (including, without limitation, a corporation or other Person whichas a result of such transaction owns the Company or all or substantially all ofthe Company’s assets either directly or through one or more subsidiaries (a “ParentCompany”)) in substantially the same proportions as their ownership,immediately prior to such Corporate Transaction, of the Outstanding CompanyCommon Stock and Outstanding Company Voting Securities, as the case may be, (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 ofdetermining whether clause (A) above is satisfied in connection with theapplicable Corporate Transaction, such Parent Company) will beneficially own,directly or indirectly, 50% or more of, respectively, the outstanding shares ofcommon stock of the corporation resulting from such Corporate Transaction orthe combined voting power of the outstanding voting securities of suchcorporation entitled to vote generally in the election of the directors unlesssuch ownership resulted solely from ownership of securities of the Companyprior to the Corporate Transaction, and (C) individuals who were members of theIncumbent Board will immediately after the consummation of the CorporateTransaction constitute at least a majority of the members of the board ofdirectors of the corporation resulting from such Corporate Transaction (or, ifreference was made to equity ownership of any Parent Company for purposes ofdetermining whether clause (A) above is satisfied in connection with theapplicable Corporate Transaction, of the Parent Company); or

(iv)  The approval by the stockholders ofthe Company of a complete liquidation or dissolution of the Company.

**(i)            Code**

The InternalRevenue Code of 1986, as amended.

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| **(j)**    | **Committee**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       | The Corporate Governance and Compensation Committee  of the Board, or any successor committee that is comprised of two or more  Directors who meet the criteria for independence as required by any  applicable law and the listing standards of the New York Stock Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **(k)**    | **Company**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       | Avaya Inc., a Delaware corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **(l)**    | **Company Action**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       | A Company or  Subsidiary declared or initiated (i) termination from service under a  force management program, (ii) sale of a unit or portion of a unit,  (iii) transfer of a Participant to a corporation, partnership, limited  liability company or other business entity in which the Company has a direct  or indirect equity interest and which does not constitute a Subsidiary or  (iv) placement of the job function of a Participant with an outsourcing  contractor unless the successor employer has made appropriate provision for  the assumption and continuation of Awards of Employees who are employed by the  successor employer after an event described in (ii), (iii) or (iv). |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **(m)**    | **Covered Employee**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       | The Chief Executive Officer and all Vice-Presidents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **(n)**    | **Deferral Plan**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       | The Company’s Deferred Compensation Plan, and any  successor or replacement plan then in effect with respect to Participants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **(o)**    | **Delegate**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       | The person or committee authorized by the Committee  or the Board to exercise specified authority under this Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **(p)**    | **Dividend Equivalent**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       | Has the meaning assigned in Article 6(b).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

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| **(q)**    | **Disability or Disabled**                                                                                                                                                                                                                                                                     |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                           |
|            | Termination of employment under circumstances where  the Participant qualifies for benefits under a long-term disability pay plan  as provided in the Participant’s Award Agreement.                                                                                                      |
|       |                                                                                                                                                                                                                                                                                           |
| **(r)**    | **Discounted Option**                                                                                                                                                                                                                                                                          |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
|       | Any Option awarded under Article 7 with an exercise  price that is less than the Fair Market Value of a Share on the date of the  grant.                                                                                                                                                       |
|       |                                                                                                                                                                                                                                                                                           |
| **(s)**    | **Effective Date**                                                                                                                                                                                                                                                                             |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
|       | See Article 21.                                                                                                                                                                                                                                                                                |
|       |                                                                                                                                                                                                                                                                                           |
| **(t)**    | **Employee**                                                                                                                                                                                                                                                                                   |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
|       | Any employee of the Company or any Subsidiary,  excluding leased employees within the meaning of Section 414(n) of the Code.                                                                                                                                                                   |
|       |                                                                                                                                                                                                                                                                                           |
| **(u)**    | **Exchange Act**                                                                                                                                                                                                                                                                               |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
|       | The Securities Exchange Act of 1934, as amended.                                                                                                                                                                                                                                               |
|       |                                                                                                                                                                                                                                                                                           |
| **(v)**    | **Exercise Date**                                                                                                                                                                                                                                                                              |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
|       | See Article 19(c)(v).                                                                                                                                                                                                                                                                          |
|       |                                                                                                                                                                                                                                                                                           |
| **(w)**    | **Existing Plans**                                                                                                                                                                                                                                                                             |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
|       | The Prior Plan, the 2000 Long Term Incentive Plan,  the 2000 Stock Compensation Plan for Non-Employee Directors and the  Broad-Based Stock Option Plan.                                                                                                                                        |
|       |                                                                                                                                                                                                                                                                                           |
| **(x)**    | **Expiration Date**                                                                                                                                                                                                                                                                            |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
| .          | The date specified in the Award Agreement after  which rights under the Award expire                                                                                                                                                                                                           |
|       |                                                                                                                                                                                                                                                                                           |
| **(y)**    | **Fair Market Value**                                                                                                                                                                                                                                                                          |
| ** ** | ** **                                                                                                                                                                                                                                                                                     |
|       | The average of the high and low sales prices of a  Share as reported on the New York Stock Exchange on the Grant Date, or if no  sales of Shares were reported on such date, the average of the high and low  sales prices of a Share on the next preceding day on which sales were  reported. |

** **

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| **(z)**        | **Grant Date**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                | The Grant Date shall be the date an Award is granted  as set forth in the Award Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **(aa)**       | **Net Income**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ** **     | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           | The net income of the Company as determined under  generally accepted accounting principles, excluding (a) extraordinary items  (net of applicable taxes); (b) cumulative effects of changes in accounting  principles; (c) gains and losses (net of applicable taxes) from the sales of  securities; and (d) nonrecurring items (net of applicable taxes) including,  but not limited to, gains or losses on asset dispositions and sales of  divisions, business units or subsidiaries, restructuring charges, gains and  losses from qualified benefit plan curtailments and settlements, and income  or expenses related to deferred tax assets. |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ** (bb)** | **Non-Employee Director**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ** **     | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           | A member of the  Board who is not an Employee of the Company or any of its Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **(cc)**       | **Option**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| ** **     | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           | An Award described in Article 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **(dd)**       | **Other Stock Unit Award**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| ** **     | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           | An Award described in Article 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **(ee)**       | **Participant**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ** **     | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           | Each (i) Employee or (ii) Non-Employee Director, who  is selected by the Committee to receive an Award under the Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **(ff)**       | **Performance Award**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| ** **     | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           | An award described in Article 10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **(gg)**       | **Performance Period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ** **     | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           | That period, established by the Committee at or  after the time any Performance Award is granted, during which any performance  goals specified by the Committee with respect to such Award are to be  measured.                                                                                                                                                                                                                                                                                                                                                                                                                                     |

** **

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| **(hh)**   | **Person**                                                                                                                                                                                                                   |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                         |
|            | Any individual, corporation, partnership,  association, joint-stock company, trust, unincorporated organization, limited  liability company, other entity or government or political subdivision.                            |
|       |                                                                                                                                                                                                                         |
| **(ii)**   | **Plan**                                                                                                                                                                                                                     |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | The Avaya Inc. 2004 Long Term Incentive Plan  (formerly known as the Long Term Incentive Plan for Management Employees).                                                                                                     |
|       |                                                                                                                                                                                                                         |
| **(jj)**   | **Restricted Stock**                                                                                                                                                                                                         |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | An Award described in Article 9.                                                                                                                                                                                             |
|       |                                                                                                                                                                                                                         |
| **(kk)**   | **Retainer**                                                                                                                                                                                                                 |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | The retainer paid to a Non-Employee Director as  compensation for services as a member of the Board or any committee of the  Board with respect to each Annual Term, but shall not include any  reimbursement for expenses.  |
|       |                                                                                                                                                                                                                         |
| **(ll)**   | **Retirement**                                                                                                                                                                                                               |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | Termination of the employment of an Employee with  the Company or any Subsidiary under circumstances where the Employee  qualifies for benefits under a retirement plan as provided in the Employee’s  Award Agreement. |
|       |                                                                                                                                                                                                                         |
| **(mm)**   | **Share**                                                                                                                                                                                                                    |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | A share of the common stock of the Company, par  value $.01 per share.                                                                                                                                                       |
|       |                                                                                                                                                                                                                         |
| **(nn)**   | **Stock Appreciation Right**                                                                                                                                                                                                 |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | An Award described in Article 8.                                                                                                                                                                                             |
|       |                                                                                                                                                                                                                         |
| **(oo)**   | **Stock Award Committee**                                                                                                                                                                                                    |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | A committee of one or more directors appointed by  the Committee pursuant to Article 4.                                                                                                                                      |
|       |                                                                                                                                                                                                                         |
| **(pp)**   | **Stock Retainer**                                                                                                                                                                                                           |
| ** ** | ** **                                                                                                                                                                                                                   |
|       | That portion of a Non-Employee Director’s Retainer  that, pursuant to Article 19(a) of this Plan, such Non-Employee Director has  elected, or is required, to receive in Shares.                                        |

 

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**(qq)         Subsidiary**

 

A “subsidiary corporation”of the Company as defined in Section 424(f) of the Code, an entity in which theCompany directly or indirectly owns 50% or more of the voting interests or anentity in which the Company has a significant equity interest, as determined bythe Committee.

**(rr)         Substitute Award**

An Award granted in lieuof an Option, Restricted Stock or Stock Appreciation Right pursuant to Article17.

**(ss)         Term**

The period beginning onthe date this Plan is approved by the stockholders of the Company, and endingon October 1, 2013.

#### **Article 3 — Shares Available for Awards;Adjustments**

(a)  Subject to adjustment as provided in Article3(b) and the remainder of this Article 3(a), the aggregate number of Shareswhich may be made subject to Awards granted under this Plan shall not exceed29,000,000; provided, however, that from and after February 15, 2007, suchnumber shall be increased to 55,000,000. Any Shares granted as Options (other than Discounted Options) or StockAppreciation Rights shall be counted against this limit as one (1) Share forevery one (1) Share granted.  Any Sharesgranted as Awards other than Options or Stock Appreciation Rights shall becounted against this limit as one and thirty-five hundredths (1.35) Share forevery one (1) Share granted. For each Discounted Option granted, the number offull Shares representing the aggregate value of the discount on the date ofgrant shall reduce the number of Shares that may be available for the grant ofAwards by one and thirty-five hundredths (1.35) Share for every one (1) Sharegranted.  If any Shares are subject to anAward, including an award under any of the Existing Plans that was made priorto and remains outstanding as of the Effective Date, that is forfeited, settledin cash, expires, or is otherwise terminated without issuance of Shares, suchShares shall again be available for Awards under the Plan if no Participantshall have received any benefits of ownership in respect thereof.  In addition, the number of shares availablefor Awards under the Plan shall be increased by (i) that number of Shares whichthe Company repurchases in the open market or otherwise with proceeds receivedfrom Option exercises, (ii) Shares that are tendered or withheld to pay theexercise or purchase price of an Award or to settle tax withholding or otherobligations arising in connection with an Award, and (iii) Shares that are nototherwise issued pursuant to an Award, in each case including with respect toawards made under any of the Existing Plans prior to and remaining outstandingas of the Effective Date.  In addition,the number of Shares available for grants under the Plan or to a Participant inany fiscal year shall not be reduced by Awards granted or Shares issued by theCompany through the assumption of, or in substitution or exchange for awards orthe right or obligation to make future grants of awards in connection with theacquisition of another corporation or business entity.  Any Shares issued under the Plan may consist,in whole or in part, of authorized and unissued Shares, Shares purchased in 

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the open market orotherwise, treasury Shares, or any combination of the foregoing, as the Boardor the Committee may from time to time determine.

(b)   (i) In the event of any Business Combination (as such term isdefined under accounting principles generally accepted in the United States (“GAAP”)),such adjustments and other substitutions shall be made to the Plan and eachoutstanding Award as the Committee in its sole discretion deems equitable orappropriate, including, without limitation: such adjustments in the aggregatenumber, class and kind of Shares or other consideration which may be deliveredunder the Plan, in the aggregate or to any one Participant; in the number,class, kind and option or exercise price of Shares subject to outstandingAwards granted under the Plan; and in the number, class and kind of Sharessubject to Awards granted under the Plan (including, if the Committee deemsappropriate, the substitution of similar options to purchase the shares of, orother awards denominated in the shares of, another company).

(ii)    In the event of any Equity Restructuring (as such term is definedunder GAAP),  the Committee shall berequired to make an equitable adjustment to the Shares subject to this Plan andeach outstanding Award, including, without limitation: adjusting the aggregatenumber, class and kind of Shares or other consideration which may be deliveredunder the Plan; adjusting the number, class, kind and option or exercise priceof Shares subject to outstanding Awards granted under the Plan; and adjustingthe number, class and kind of Shares subject to Awards granted under the Plan(including, the substitution of similar options to purchase the shares of, orother awards denominated in the shares of, another company).

After any adjustment underthis paragraph (b), the number of Shares or other securities subject to anyAward shall always be a whole number.

(c)  Except as provided in Article 22, theCommittee shall be authorized to make adjustments in Performance Award criteriaor in the terms and conditions of other Awards in recognition of unusual ornonrecurring events affecting the Company or its financial statements, orchanges in applicable laws, regulations or accounting principles.  The Committee may correct any defect, supplyany omission or reconcile any inconsistency in the Plan or any Award in themanner and to the extent it shall deem desirable.  In the event the Company shall assumeoutstanding employee benefit awards or the right or obligation to make futuresuch awards in connection with the acquisition of another corporation orbusiness entity, the Committee may, in its discretion, make such adjustments inthe terms of Awards under the Plan as it shall deem appropriate.

**Article 4 — Administration**

The Plan shall beadministered by the Committee.  The Committee shall have full power andauthority, subject to such resolutions not inconsistent with the provisions ofthe Plan as may from time to time be adopted by the Board, to (i) interpret andadminister the Plan and any instrument or agreement entered into under thePlan; (ii) establish such rules and regulations and appoint such agents as itshall deem appropriate for the proper administration and interpretation of thePlan, including a Stock Award Committee to make grants of Awards and 

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discharge the duties of the Committee; and (iii) make any otherdetermination and take any other action that the Committee deems necessary ordesirable for administration of the Plan. The Committee or the Stock Award Committee may appoint a Delegateto administer and interpret the provisions of the Plan, promulgate rules andregulations under the Plan, discharge the duties of the Committee underArticles 12 and 17, designate employees to perform ministerial functions underthis Plan and execute documents on behalf of the Company; provided, however,that any Delegate appointed pursuant to this Article 4 who is a Participant inthe Plan shall not participate in making any decision that would benefit suchDelegate, except to the extent such decision would only incidentally benefitthe Delegate and would also generally benefit a larger class of Participants.

The interpretations andconstruction of any provision of the Plan by the Committee, the Stock AwardCommittee, or the Delegate, as the case may be, as well as any factualdeterminations, shall be final, unless otherwise determined by the Board.  No member of the Board, the Committee, theStock Award Committee or any Delegate shall be liable for any action ordetermination made by him or her in good faith.

### **Article 5 — Eligibility**

The Committee, in itssole discretion, may grant an Award to (i) any Employee who is activelyemployed by the Company or a Subsidiary and (ii) to any Non-EmployeeDirector.  The adoption of this Planshall not be deemed to give any Employee or Non-Employee Director any right tobe granted an Award, except and to the extent and upon such terms andconditions as may be determined by the Committee.

### **Article 6 — Awards — General**

(a)  Awards may be granted to Participants eitheralone, in tandem with or in addition to any other type of Award granted underthe Plan.  Awards may be granted for noconsideration, for such minimum consideration as is required by applicable lawor for such other consideration as the Committee may determine.  Any Award granted under the Plan shall beevidenced by an Award Agreement.  Theprospective recipient of any Award shall not, with respect to such Award, bedeemed to have become a Participant, or to have any rights with respect to suchAward, until and unless such recipient has complied with the then applicableterms and conditions of the related Award Agreement.  The term of each Award shall be for suchperiod of months or years from date of its grant as may be determined by theCommittee; providedthat in no event shall the term of any Optionexceed a period of seven (7) years from its Grant Date.  The Committee may impose such conditions onthe exercise or vesting of any Award as it shall deem appropriate.

(b)  Subject to the provisions of this Plan andany Award Agreement, the recipient of an Award (including, without limitation,any deferred award) may, if so determined by the Committee, be entitled toreceive, currently or on a deferred basis, interest or dividends, or interestor dividend equivalents (collectively, “Dividend Equivalents”), with respect tothe number of Shares covered 

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by the Award, asdetermined by the Committee, in its sole discretion, and the Committee mayprovide that such amounts (if any) shall be deemed to have been reinvested inadditional Shares or otherwise reinvested.

**Article 7— Options**

An Option is a right topurchase Shares subject to the following terms and conditions and to suchadditional terms and conditions, not inconsistent with the provisions of thePlan, as the Committee shall deem desirable; provided, however, that in noevent shall any Option granted under this Plan be an “incentive stock option”as such term is defined under Section 422 of the Code:

**(a)**  **Option Price.**  The exercise price per Share under an Optionshall be determined by the Committee in its sole discretion; providedthatsuch exercise price shall not be less than 75% of the Fair Market Value of aShare on the date of the grant.

**(b)  Exercisability.**  Options shall be exercisable at such time ortimes as determined by the Committee at or subsequent to grant.

**(c)  Method Of Exercise.**  Subject to the other provisions of the Planand any applicable Award Agreement, any Option may be exercised by theParticipant in whole or in part at such time or times, and the Participant maymake payment of the option price in such form or forms, including, withoutlimitation, payment by delivery of cash or Shares (whether through actualdelivery or attestation of sufficient ownership)  or by any combination of cash or Shares.  Subject to the other provisions of the Planand any applicable Award Agreement, if permitted by the Committee, applicableaccounting rules and applicable law, the Company may withhold Shares as paymentof the exercise price for any Option.

**(d)  Form Of Settlement.**  In its sole discretion, the Committee mayprovide, at the time of grant, that the Shares to be issued upon an Option’sexercise shall be in the form of Restricted Stock or other similar securities,or may reserve the right so to provide after the time of grant.

**(e)  Repricing.**  Any repricing (as such term is defined underthe listing standards of the New York Stock Exchange) of Options that aregranted pursuant to the terms of this Plan shall be subject to the approval ofthe Company’s shareholders.

##### **Article 8 — Stock Appreciation Rights**

A Stock AppreciationRight is a right to receive in cash the difference between the Fair MarketValue of a Share on the exercise date and the Grant Date.  Stock Appreciation Rights may be grantedalone (“freestanding”) or may be related to an Option or other Award.  A freestanding Stock Appreciation Right shallotherwise have the same terms and conditions as an Option.  Any Stock Appreciation Right related to anOption may be granted at the same time such Option is granted or at any timethereafter before exercise or expiration of such Option.  In the case of any Stock Appreciation Rightrelated to any Op­tion, the Stock Appreciation Right or 

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applicable portionthereof shall terminate and no longer be exercisable upon the termination orexer­cise of the related Option, ex­cept that a Stock Appreciation Rightgranted with respect to less than the full num­ber of Shares covered by arelated Option shall not be reduced until the exercise or termination of therelated Option exceeds the number of Shares not cov­ered by the StockAppreciation Right.  Any Option relatedto any Stock Appreciation Right shall no longer be exercisable to the extentthe related Stock Appreciation Right has been exercised.

###### **Article 9 — Restricted Stock**

Restricted Stock is anAward in the form of Shares issued with the restriction that the Participantmay not sell, transfer, pledge or assign the Shares and with any other restrictionsthat the Committee may impose (including restrictions on the right to vote orreceive cash dividends on the Shares) which restrictions may lapse separatelyor in combination at such time or times, in installments or otherwise, as theCommittee shall determine.

###### **Article 10 — Performance Awards**

A Performance Award is anAward of Performance Units or Performance Shares which vests and becomesnon-forfeitable based on performance criteria determined by the Committee to beachieved over a prescribed Performance Period. An Award of Performance Shares is a number of units valued by referenceto a designated number of Shares, and an Award of Performance Units is a numberof units valued by reference to a designated amount of property other thanShares.  The performance criteria to beachieved during any Performance Period and the length of the Performance Periodshall be determined by the Committee upon the grant of each PerformanceAward.  Except as provided in Articles 12and 14, Performance Awards will be distributed only after the end of the rele­vantPerformance Period.  A Performance Periodshall not be less than twelve months nor greater than five years.

Performance Awards may bepaid in cash, Shares, other property or any combination of the foregoing, inthe sole discre­tion of the Committee upon the grant of the PerformanceAward.  The performance levels which havebeen achieved for each Performance Period and the amount of the Award to bedistributed shall be conclu­sively deter­mined by the Committee.  Performance Awards may be paid in a lump sumor in installments following the close of the Performance Period.

# **Article11 — Other Stock Unit Awards**

Other Awards of Sharesand other Awards that are valued in whole or in part by reference to, or are otherwisebased on, Shares (“Other Stock Unit Awards”) may be paid in Shares, othersecurities of the Company, cash or any other form of property as the Committeeshall determine upon the grant of the Other Stock Unit Award.  Other Stock Unit Awards may be issued withsuch restrictions that the Committee may impose, which restrictions may lapseseparately or in combination at such time or times, in installments orotherwise, as the Committee shall determine. Shares purchased pursuant to Other Stock Unit Awards shall be 

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purchased for suchconsideration as the Committee shall in its sole discretion determine, whichshall not be less than the Fair Market Value of such Shares as of the GrantDate of such Award.

### **Article 12 —Termination of Employment**

Except as otherwiseprovided in Article 19 or in an Award Agreement, the provisions of this Article12 shall govern the rights of Participants to exercise Options followingtermination of employment.  If aParticipant terminates employment for any reason other than Retirement,Disability or death (i) any portion of the Participant’s Options which areexercisable on the date employment terminates may be exercised until theearlier of ninety days following termination of employment or the originalExpiration Date of the Option, and (ii) any portion of an Option that is notexercisable on the date employment terminates shall be forfeited and canceled,except that if the reason for the termination of employment is a CompanyAction, then the Option shall become immediately exercisable for the periodspecified in clause (i) with respect to the number of Shares determined by thefollowing formula, and shall be forfeited and canceled with respect to theremaining Shares:
| Shares          |   |   |  Original Shares |   |   |                                          | Number of  Completed Months Prior to       |   |   |
|-----------------|--------|--------|-----------------------|--------|--------|-----------------------------------------------|--------------------------------------------|--------|--------|
| Exercisable   = |   |   |  Granted         |   | X      |                                          | Termination of  Employment Since   Granted |   |   |
|            |   |   |                  |   |   |                                          | Number of Complete Months from Grant       |   |   |
|            |   |   |                  |   |   |                                          | Date to Full Exercisability of Option      |   |   |
|            |   |   |                  |   |   |                                          |                                       |   |   |
|            |   |   |                  |   |   | Minus: Number of  Shares Exercisable Prior to |
|            |   |   |                  |   |   | Termination of  Employment                    |
|                 |        |        |                       |        |        |                                               |                                            |        |        |  |

 

Upon termination ofemployment by reason of Retirement or Disability, any portion of a Participant’sOption that is then outstanding shall, to the extent not then exercisable, beimmediately forfeited and canceled in its entirety. To the extent that anOption is exercisable on the date of a Participant’s Retirement or Disability,the Option will remain exercisable until the original Expiration Date of theOption. Notwithstanding the foregoing, if a Participant terminates employmentpursuant to a Company Action under circumstances that also constituteRetirement for such Participant, then any portion of any Option of theParticipant which becomes exercisable by reason of this Article 12 along withany portion of any Option of the Participant which is exercisable on the dateof termination of employment shall be exercisable, until the originalExpiration Date of the relevant Option. Upon the death of a Participant, theoutstanding portion of such Participant’s Option shall, to the extent not thenexercisable, become immediately exercisable in full and the Option shall remainexercisable until the original Expiration Date of the Option.  The Committee or its Delegate may, in itssole discretion, waive or modify the application of this Article 12 in the caseof any individual Participant.  ThisArticle 

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12 applies only toOptions; however the Committee may provide for similar treatment of other formsof Awards at the time that the Award is granted.

### **Article 13 — Nonassignability/Deferral**

(i)    No Award shall be assigned or transferred bya Participant who is an Employee other than by will or the laws of descent anddistribution, and during the lifetime of the Participant may be exercised onlyby such Participant or his or her guardian or legal representative; provided,however, that an Option granted under the Plan to an Employee may be assignedor transferred to the extent determined by the Committee and set forth in theapplicable Award Agreement.

(iii)  To the extent permitted by the Deferral Plan,a Participant may elect to have all or a portion of any Award deliverable underthis Plan credited to the deferred compensation account of such Participantunder the Deferral Plan to be held in, respectively, the Company Shares andcash portions of such account.

### **Article 14 — Change in Control Provisions**

Notwithstanding any otherprovision of the plan to the contrary, but, with respect to Non-EmployeeDirectors, subject to Article 19, unless the Committee shall determineotherwise at the time of grant with respect to a particular Award, in the eventof a Change in Control any Options and Stock Appreciation Rights outstanding asof the date such Change in Control is determined to have occurred, and whichare not then exercisable and vested, shall become fully exercisable and vestedto the full extent of the original grant and any Restricted Stock and OtherStock Unit Awards which are not then vested shall become vested andnon-forfeitable to the full extent of the original grant.  If a Change in Control occurs or is to occurduring a Performance Period, the Committee shall determine the extent to whichPerformance Awards shall vest or shall be adjusted in accordance with Article3(c) in the event of a Change in Control. This determination shall be made by individuals who are members of theIncumbent Board, as defined in the definition of Change in Control in Article1(h).

### **Article 15 — Reservation of Shares**

The Company, during theterm of this Plan, will at all times reserve and keep available, and will seekor obtain from any regulatory body having jurisdiction any requisite authoritynecessary to issue and to sell, the number of Shares that shall be sufficientto satisfy the requirements of this Plan. The inability of the Company to obtainfrom any regulatory body having jurisdiction the authority deemed necessary bycounsel for the Company for the lawful issuance and sale of Shares shallrelieve the Company of any liability in respect of the failure to issue or sellShares as to which the requisite authority has not been obtained.

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### **Article 16 — Taxes**

Where permitted by theCommittee and set forth in the applicable Award Agreement, a Participant mayrequest that the Company satisfy any applicable taxes in connection with anAward by withholding from payment to the Participant Shares (at minimumstatutory rates only), or the Participant may deliver Shares (whether throughactual delivery or attestation of sufficient ownership) to the Company tosatisfy those obligations,  In addition,the Company and any Subsidiary shall have the right to condition the grant orexercise of any Award on a Participant’s payment of any applicable amountsrequired by a governmental agency to be withheld from payment to theParticipant or paid or deducted by the Company or a Subsidiary in connectionwith an Award (“withholding tax”).  TheCompany and any Subsidiary shall also have the right to deduct any withholdingtax from a Participant’s other compensation or to make any other arrangementsto satisfy withholding tax obligations, including arrangements with one or morebrokerage firms pursuant to cashless exercise procedures.  The Company and any Subsidiary shall furtherhave the right to deduct from any payment under an Award under the Plan or froma Participant’s other compensation any tax or social insurance payment imposedon the Company or Subsidiary in connection with such Award.

### **Article 17 — Employees Based Outside of theUnited States**

Notwithstanding anyprovision of the Plan to the contrary, in order to foster and promoteachievement of the purposes of the Plan or to comply with the provisions oflaws in other countries in which the Company and its Subsidiaries operate orhave Employees, the Committee or its Delegate, in its sole discretion, shallhave the power and authority to (1) determine which Employees that are subjectto the tax, employment and securities laws of nations other than the UnitedStates are eligible to participate in the Plan, (2) modify the terms andconditions of any Awards granted to such Employees (including the grant ofRestricted Stock, Stock Appreciation Rights or some other comparable form ofaward (“Substitute Award”) in lieu of Options), and (3) establish subplans,modified Option exercise procedures and other terms and procedures to theextent such actions may be necessary or advisable; provided, however,that the Committee may not grant such Awards that do not comply with thelimitations of Article 3.  Any subplansestablished under this Article 17 shall be attached to this Plan asAppendices.  The terms of this Planapplicable to Options shall apply with like effect to Stock AppreciationRights, Restricted Stock Awards, Performance Awards, Other Stock Unit Awardsand Substitute Awards to the extent legally permissible.

### **Article 18 — Rights to Continued Employmentor Directorship**

### Neither this Plan nor any Award shall be construed as giving any personthe right to be retained in the employ of the Company or any Subsidiary.  No Participant shall have any claim to begranted any Award under the Plan or to include any Award or its value in anyform of severance or similar pay, or in any benefit plan or program which byits terms does not specifically include the value of the Award.  There is no obligation of uniformity oftreatment of Participants under the Plan. This Plan is of limited duration and creates no ongoing obligation ofthe Company to provide any future benefit of similar nature or value.  Nothing in the Plan shall be deemed to

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### create any obligation on the part of the Board or the Company tonominate any Director for reelection by the Company’s shareholders or to limitthe rights of the shareholders to remove any Director.

###### **Article 19 — Non-Employee Director Awards**

Notwithstandingany provision in the Plan to the contrary, the following terms shall apply withrespect to Awards granted to Non-Employee Directors under the Plan:

**(a)****          Inaugural Grants**

Non-employeeDirectors may receive such inaugural grants of Awards in the form of Shares,Restricted Stock or Options upon commencement of service on the Board as theCommittee shall determine.

**(b)****          Retainer.**
|   | (i)    | Commencing with  the Annual Term beginning March 1, 2004, each Participant will receive fifty  percent (50%) of his or her Retainer for each Annual Term in the form of a  Stock Retainer, Restricted Stock or Option, as determined by the Committee,  and may elect to receive all or any portion of the remaining fifty percent  (50%) of such Retainer in the form of either a Stock Retainer or in cash;  provided, that, to the extent deemed permissible by the Committee, each  Non-Employee Director may elect to receive in lieu of any or all of any  amount to be paid as a Stock Retainer a payment in the form of an Option for the  number of Shares determined pursuant to Article 19(c). Any such election  shall be filed on a form prescribed by the Committee for this purpose and  such election (or failure to elect) shall be irrevocable as of the last date  by which such election was due to be filed with the Company. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | (ii)   | If any  Non-Employee Director fails to notify the Secretary of the Company in writing  by December 31 of the preceding Annual Term of the desired form of payment of  the Retainer for the next Annual Term, then such Participant shall be deemed  to have elected a Stock Retainer for fifty percent (50%) of the value of such  Retainer, with the remaining 50% in cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | (iii)  | Any Shares constituting a Stock Retainer shall be payable  automatically on March 1 of each Annual Term (or, if March 1 is not a  Business Day, on the next succeeding Business Day), commencing March 1, 2004.  Payments for the cash portion, if any, of the Annual Retainer shall be made  on the same day. A Participant’s Stock Retainer shall consist of the largest  number of whole Shares having a Fair Market Value, as of the date of payment,  equal to the portion of the Retainer to be paid in Shares. The Fair Market  Value of any fractional share shall be paid in cash.                                                                                                                                                                                                                                                                                                                                                   |

 

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|  | (iv) | This Article 19  shall apply to any person who becomes a Non-Employee Director Participant  other than at the beginning of an Annual Term (or the immediately preceding  Annual Meeting) with respect to the Retainer determined by the Committee to  be payable for such portion of such Annual Term which follows his or her  appointment to the Board. Such person shall make the election prescribed by  Article 19(b)(i) no later than the 30th day following the effective date of  his or her appointment to the Board. The payment date for any cash portion of  the Retainer and the date of grant for any Option or Stock Retainer shall be  the first Business Day which occurs at least fifteen (15) calendar days after  receipt by the Company of such election. |
|--|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**(c)           Options.**
|  | (i) | In the event  that the Committee determines that a Non-Employee Director may elect to  receive payment of all or any portion of the Retainer in the form of an  Option, an Option shall be granted, on the terms and conditions described in  this Plan, to purchase the largest number of whole Shares obtained by  applying the following formula: |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 
|        | Number  of | Multiplier  X | Dollar Amount of  Retainer to be paid as an Option |   |   |
|--------|------------|---------------|----------------------------------------------------|--------|--------|
|   | Shares =   |          | Fair Market Value of a Share on March 1*           |

 

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|   | *or, if March 1 is not a Business Day, on the  next succeeding Business Day.                                                                                                                                                                                                                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | “Multiplier” shall be a number (but need not be a  whole number) to be determined by the Committee in its discretion in order to  provide that any grant to a Director is equitable under the circumstances,  including without limitation, prior grants awarded to such Director and  grants awarded to other Directors; provided, however, that the Multiplier  shall not be less than 1 nor greater than 5. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The value of any fractional share shall be paid in  cash.                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                     | Options shall be subject to the terms and conditions set forth in  this Plan and to such additional terms and conditions, not inconsistent with  the provi­sions of this Plan, as the Committee shall deem desirable. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                    | The exercise price per Share  under an Op­tion shall be the Fair Market Value of a Share on the date of  grant, subject to adjustment as prescribed in Article 3(b). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|   | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                     | Options shall be vested and  non-forfeitable on the Grant Date and be fully exercisable on the earliest of  (i) the date which is six (6) months after the Grant |

 

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|        | Date, (ii) the occurrence of  a Change in Control and (iii) the death of a Participant (any of the  foregoing the “Exercise Date”). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                          |
|   | (v)                                                                                                                                           | Except as provided in this  Article 19(c)(v) or as otherwise determined by the Committee and set forth in  the applicable Award Agreement, an Option is not transferable other than by  will or the laws of descent and distribution, and during the lifetime of the  Non-Employee Director, may be exercise only by such Non-Employee Director or  his or her guardian or legal representative. Notwithstanding the foregoing,  an Award may be transferred by the Non-Employee Director, in accordance with  rules established by the Company, to one or more members of the Non-Employee  Director’s immediate family, to a partnership of which the only partners are  members of such immediate family or to a trust established by the  Non-Employee Director for the benefit of one or more members of such  immediate family (each such transferee a “Permitted Transferee”). For  purposes of this Article 19, “immediate family” means a Non-Employee  Director’s spouse, parents, children, grandchildren and spouses of children  and grandchildren (including adopted children and grandchildren, as the case  may be). A Permitted Transferee may not further transfer the Award. An Award  transferred pursuant to this Article 19 shall remain subject to all of the  provisions of the Plan and any Award Agreement with respect to such Award and  may not be exercised by a Permitted Transferee unless and until all legal or  regulatory approvals, listings, registrations, qualifications or other  clearances as determined by the Company to be required or appropriate have been  obtained. |
|   |                                                                                                                                          |   |
|   | (vi)                                                                                                                                          | A Non-Employee Director may,  in accordance with procedures established by the Company, designate one or  more beneficiaries to receive all of his or her rights to any unexercised  Award and may change or revoke such designation at any time. In the event of  the death of the Non-Employee Director, any Award or portion thereof which is  subject to such a designation shall be exercisable (to the extent such  designation is determined by the Company to be valid, effective and  enforceable) by the designated person or persons in accordance with this Plan  and any Award Agreement. Such determination by the Company shall be final and  binding on all Persons, and the Company shall have no liability with respect  to any Person with respect to such determination. |
|   |                                                                                                                                          |   |
|   | (vii)                                                                                                                                         | Any Option may be exercised by the Participant in whole or in part at  any time on or after the Exercise Date and before the expiration of such  Option. The Participant shall make payment of the Option price in cash or in  Shares (whether through actual delivery or attestation of sufficient  ownership) with a Fair Market Value  equivalent to the exercise price for all of the Shares to be purchased upon  exercise of the Option. Subject to the other provisions of the Plan  and any applicable Award Agreement, if permitted by the Committee, applicable  accounting rules and applicable law, the Company may withhold Shares as  payment of the exercise price for any Option. |

 

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**Article20 — Amendment of Plan**

The Board may amend thePlan at any time and from time to time. The Board may, at any time or from time to time, suspend or terminatethis Plan in whole or in part.

No such amendment,suspension or termination of the Plan may, however, impair any Award grantedprior to such amendment, suspension or termination, without the written consentof the affected Participant.

Shareholder approval ofamendments to the Plan will be obtained where required to comply withapplicable law and New York Stock Exchange regulations.

### **Article 21 — Term of Plan**

The Plan shall becomeeffective upon approval of the Plan by the stockholders of the Company (the “EffectiveDate”).

The Plan shall terminateon October 1, 2013 or at such earlier date as may be determined by the Board ofDirectors.  Termination of the Plan,however, shall not affect the rights of Participants under Awards previouslygranted to them, and all unexpired Awards shall continue in force and operationafter termination of the Plan except as they may lapse or be terminatedpursuant to this Plan.

###### **Article 22 — Code Section 162(m) Provisions**

(a)  Notwithstanding any other provision of thisPlan, if the Committee deter­mines at the time Restricted Stock, a PerformanceAward or an Other Stock Unit Award is granted to a Participant that suchParticipant is, or may be as of the end of the tax year for which the Companywould claim a tax deduction in connection with such Award, a Covered Em­ployee,then the Committee may provide that this Article 22 is applicable to such Awardunder such terms as the Committee shall determine.  Notwithstanding any provision of the Planother than Article 3(b), no Participant may receive, in any 36-month periodduring the Term beginning with the Effective Date, Awards with respect to morethan, in each case in the aggregate, (i) 1,500,000 Shares, (ii) $15 million incash, other securities of the Company or other forms of property, or (iii)Options or Stock Appreciation Rights on more than 5,000,000 Shares.

(b) If an Award, otherthan an Option or Stock Appreciation Right with an exercise price not less than100% of the Fair Market Value of a Share on the date of grant, is subject tothis Article 22, then the grant of cash, Shares or other property shall besubject to the Company attaining specified levels of one or any combination ofthe following for the Performance Period: Net Income; net cash provided by operating activities; earnings perShare from continuing 

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operations; operatingincome; revenues; gross margin; return on operating assets; return on equity;economic value added; stock price appreciation; total shareholder return(measured in terms of stock price appreciation and dividend growth); or costcontrol, of the Company or the Subsidiary or division of the Company for orwithin which the Covered Employee is primarily employed (collectively, the “PerformanceGoals”).  The Committee shall establishthe Performance Goals within 90 days following the date of commencement of theapplicable Performance Period, or by such earlier time as is prescribed bySection 162(m) of the Code or the regulations thereunder in order for the levelto be considered “pre-established.” The Committee, may, in its discretion,reduce the amount of any Award subject to this Article 22 based on suchcriteria as it shall determine, including but not limited to individual merit.

(c)  Notwithstanding any contrary provision of thePlan other than Article 14, the Committee may not adjust upwards the amountpayable pursuant to any Award subject to this Article 22, nor may it waive theachievement of the applicable Performance Goal contained in Article 22(b),except in the case of the death or disability of a Participant.

(d)  Prior to the payment of any Award subject tothis Article 22, the Committee shall certify in writing that the applicablePerformance Goal applicable to such Award was met.

(e)  The Committee shall have the power to imposesuch other restrictions on Awards subject to this Article 22 as it may deemnecessary or appropriate to en­sure that such Awards satisfy all requirementsfor “performance-based compensa­tion” within the mean­ing of Section162(m)(4)(C) of the Code, the regulations promulgated thereunder, and anysuccessors thereto.

###### **Article 23 — Form of Shares and RestrictedStock Awards**

Shares issued ordelivered under the Plan and any Restricted Stock Award may be evi­denced insuch manner as the Committee in its sole discretion shall deem appropri­ate,including, without limitation, book-entry registration or issuance of a stockcertificate or certificates. In the event any stock certificate is issued inrespect of a Restricted Stock Award, such certificate shall be regis­tered inthe name of the Participant, and shall bear an appropriate legend referring tothe terms, conditions, and restrictions ap­plicable to such Award.  All shares delivered under the Plan shall be subject to such stop-transfer ordersand other restrictions as the Company may deem advisable under the rules,regulations, and other requirements of the Securities and Ex­change Commission,any stock exchange upon which the Shares are then listed, and any applicableFederal or state securities law, and the Company may cause a legend or leg­endsto be put on any such certificates to make appropri­ate reference to suchrestrictions.

###### **Article 24 — Postponement of Issuance andDelivery**

The issuance or delivery of any Shares under this Plan may be postponedby the Company for such period as may be required to comply with any applicablerequirements under Federal securities laws, any applicable listing requirementsof any national securities exchange, and requirements under any other law orregulation applicable to the issuance or delivery of such Shares, and theCompany shall not be obligated to issue or deliver any Shares if the issuance 

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or delivery of such Shares shall constitute a violation of anyprovision of any law or of any regulation of any governmental authority or anynational securities exchange.

###### **Article 25 —Severability**

If any provision of this Plan is or becomes or is deemed invalid,illegal or unenforce­able in any jurisdiction, or would disqualify the Plan orany Award under any law deemed applicable by the Company, such provision shallbe construed or deemed amended to conform to applicable laws or if it cannot beconstrued or ­deemed amended without, in the determination of the Company,materially altering the intent of the Plan, it shall be stricken and theremainder of the Plan shall remain in full force and effect.

###### **Article 26 — Governing Law**

The Plan and the validityand construction of any Awards granted hereunder shall be governed by the lawsof the State of Delaware without regard to principles of conflicts of law.

IN WITNESS WHEREOF, the Company has caused thisPlan, as amended, to be executed effective as of the 3rd day of May, 2007.
| AVAYA INC. |
|------------|
|       |
|       |
| By:        |   |   |
|       | Roger Gaston |
|       | Senior Vice  President — Global Human Resources |
|       |
|       |
| Attest:    |   |   |
|       | Eric Sherbet |
|       | Vice President —  Law, Corporate and Securities |
|       | & Corporate  Secretary |

 

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