AND ANY
NONQUALIFIED SUPPLEMENTAL DEFINED BENEFIT PENSION PLAN OF THE COMPANY IN WHICH
THE EXECUTIVE IS A PARTICIPANT, CALCULATED BY INCREASING THE EXECUTIVE'S AGE AND
SERVICE CREDIT UNDER SUCH PLANS AS OF THE DATE OF TERMINATION BY
YEAR(S) OVER (II) THE EXECUTIVE'S ACCRUED ANNUITY BENEFITS UNDER SUCH PLANS AS
OF DECEMBER 31, 2003.
SUCH EXCESS PAYMENT WILL BE DISCOUNTED BACK TO THE
EXECUTIVE'S AGE AS OF THE TERMINATION DATE.
SUCH LUMP SUM CASH AMOUNT SHALL BE
COMPUTED USING THE SAME ACTUARIAL METHODS AND ASSUMPTIONS THEN IN USE FOR
PURPOSES OF COMPUTING BENEFITS UNDER SUCH PLANS, PROVIDED THAT THE INTEREST RATE
USED IN MAKING SUCH COMPUTATION SHALL NOT BE GREATER THAN THE INTEREST RATE
PERMITTED UNDER SECTION 417(E) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), ON THE DATE OF TERMINATION.
(C)
FURTHERMORE, IN ADDITION TO THE PAYMENTS TO BE MADE PURSUANT TO
SECTION 3(A) AND 3(B), THE COMPANY SHALL PAY TO THE EXECUTIVE A LUMP-SUM CASH
AMOUNT EQUAL TO (I)
TIMES THE SAVINGS PLAN AMOUNT PLUS (II)
TIMES THE SAVINGS RESTORATION PLAN AMOUNT.
THE "SAVINGS PLAN AMOUNT" AND THE
"SAVINGS RESTORATION PLAN AMOUNT" ARE THE AMOUNTS THAT WOULD HAVE BEEN CREDITED
TO THE EXECUTIVE'S ACCOUNTS AS AUTOMATIC COMPANY ALLOCATIONS AND MATCHING
ALLOCATIONS UNDER THE AVAYA INC. SAVINGS PLAN FOR SALARIED EMPLOYEES (THE
"SAVINGS PLAN") AND THE AVAYA INC. SAVINGS RESTORATION PLAN (THE "RESTORATION
PLAN"), RESPECTIVELY, HAD THE EXECUTIVE REMAINED EMPLOYED BY THE COMPANY FOR THE
TWELVE-MONTH PERIOD FOLLOWING THE TERMINATION DATE (THE "PERIOD").
IN
DETERMINING THE SAVINGS PLAN AMOUNT AND THE SAVINGS RESTORATION PLAN AMOUNT, THE
FOLLOWING SHALL BE ASSUMED:
(I) THE EXECUTIVE'S AGGREGATE CONTRIBUTIONS TO EACH
OF THE SAVINGS PLAN AND THE RESTORATION PLAN FOR THE PERIOD WOULD HAVE BEEN
IDENTICAL TO THE AGGREGATE ELIGIBLE CONTRIBUTIONS MADE BY THE EXECUTIVE TO THE
SAVINGS PLAN AND RESTORATION PLAN, RESPECTIVELY, FOR THE TWELVE-MONTH PERIOD
PRIOR TO THE TERMINATION DATE (OR, IF CONTRIBUTIONS WERE MADE FOR A SHORTER
PERIOD, THEN IDENTICAL TO THE CONTRIBUTIONS MADE BY
7
THE EXECUTIVE FOR SUCH SHORTER PERIOD), AND (II) THE EXECUTIVE'S ANNUAL BASE
SALARY FOR THE PERIOD WOULD HAVE REMAINED THE SAME AS ON THE TERMINATION DATE.
(D)
FOR A PERIOD OF
YEARS COMMENCING ON THE DATE OF
TERMINATION, THE COMPANY SHALL CONTINUE TO KEEP IN FULL FORCE AND EFFECT ALL
POLICIES OF MEDICAL AND LIFE INSURANCE WITH RESPECT TO THE EXECUTIVE AND HIS
DEPENDENTS WITH THE SAME LEVEL OF COVERAGE, UPON THE SAME TERMS AND OTHERWISE TO
THE SAME EXTENT AS SUCH POLICIES SHALL HAVE BEEN IN EFFECT IMMEDIATELY PRIOR TO
THE DATE OF TERMINATION OR AS PROVIDED GENERALLY WITH RESPECT TO OTHER PEER
EXECUTIVES OF THE COMPANY AND ITS AFFILIATED COMPANIES, AND THE COMPANY AND THE
EXECUTIVE SHALL SHARE THE COSTS OF THE CONTINUATION OF SUCH INSURANCE COVERAGE
IN THE SAME PROPORTION AS SUCH COSTS WERE SHARED IMMEDIATELY PRIOR TO THE DATE
OF TERMINATION; PROVIDED, HOWEVER, THAT THE MEDICAL AND LIFE INSURANCE COVERAGE
PROVIDED PURSUANT TO THIS SECTION 3(D) SHALL BE IN LIEU OF ANY OTHER MEDICAL AND
LIFE INSURANCE