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Exhibit 10.1    
  

 
 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT    
  

 
 

Table of Contents    
  

	 
	 	 
	 	Page

	1.	 	Termination of Existing Employment Agreements	 	1
	2.	 	Employment; Term	 	1
	3.	 	Offices and Duties	 	1
	4.	 	Compensation	 	2
	5.	 	Benefits	 	3
	6.	 	Termination	 	4
	7.	 	Compensation Following Termination Prior to the End of the Term	 	7
	8.	 	Excise Tax Restoration Payment	 	11
	9.	 	Offsets; Withholding	 	11
	10.	 	Noncompetition; Nonsolicitation; Nondisclosure; etc	 	11
	 	 	10.1      Noncompetition; Nonsolicitation.	 	11
	 	 	10.2      Proprietary Information	 	13
	 	 	10.3      Confidentiality and Surrender of Records	 	13
	 	 	10.4      Nondisparagement	 	13
	 	 	10.5      No Other Obligations	 	14
	 	 	10.6      Forfeiture of Outstanding Options	 	14
	 	 	10.7      Enforcement	 	14
	 	 	10.8      Cooperation with Regard to Litigation	 	15
	 	 	10.9      Survival	 	15
	 	 	10.10    Company	 	15
	11.	 	Insurance for the Company's Benefit	 	15
	12.	 	Indemnification	 	15
	13.	 	Notices	 	16
	14.	 	Assignability; Binding Effect	 	17
	15.	 	Complete Understanding; Amendment; Waiver	 	17
	16.	 	Severability	 	17
	17.	 	Survivability	 	18
	18.	 	Governing Law; Arbitration; Expenses; Interest	 	18
	 	 	18.1      Governing Law	 	18
	 	 	18.2      Arbitration	 	18
	 	 	18.3      Reimbursement of Expenses in Enforcing Rights	 	19
	 	 	18.4      Interest on Unpaid Amounts	 	19
	19.	 	Reimbursement of Expenses of Executive in Negotiating Agreement	 	19
	20.	 	Titles and Captions	 	19

 
 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT    
  

        This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 1st day of November, 2000 (the "Effective Date"), by and between SCIENTIFIC
GAMES CORPORATION, a Delaware corporation formerly known as Autotote Corporation (the "Company"), and A. Lorne Weil ("Executive"). 

 
 

W I T N E S S E T H:    
  

        WHEREAS, Executive has been employed by the Company pursuant to an Employment Agreement dated as of
November 1, 1997, as amended by the letter agreement dated September 10, 1998 and the Amendment to Employment Agreement dated as of September 1, 2000 (the "Old Agreement"); and 

        WHEREAS, the Company desires to continue to employ Executive with the Company, and Executive wishes to continue to serve the Company, in
the capacities and on the terms and conditions set forth in this Agreement; and 

        WHEREAS, the Company and Executive desire that this Agreement, amended and restated as of November 1, 2000, replace and supersede
the Old Agreement; 

        NOW, THEREFORE, in consideration of the premises and the mutual benefits to be derived herefrom and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 

        1.    Termination of Existing Employment Agreements.    As of the Effective Date, all existing employment agreements
between the parties, whether oral or written, including the Old Agreement, are hereby terminated, except as provided in Section 12. 

        2.    Employment; Term.    The Company hereby agrees to employ Executive, and Executive hereby accepts continued
employment with the Company, in accordance with and subject to the terms and conditions set forth herein. The term of employment of Executive under this Agreement (the "Term") shall be the period
commencing on the Effective Date and ending on December 31, 2004, and any period of
extension thereof in accordance with this Section 2, subject to earlier termination in accordance with Section 6. The Term shall be extended automatically without further action by
either party by one additional year (added to the end of the Term) first on December 31, 2004 (extending the Term to December 31, 2005) and then on each succeeding December 31
thereafter, unless either party shall have given written notice to the other party prior to the June 30 preceding the date upon which such extension would become effective electing not to
further extend the Term, in which case Executive's employment shall terminate on the date upon which such extension would otherwise have become effective, unless earlier terminated in accordance with
Section 6; provided, however, that any termination pursuant to this Section 2 shall be subject to and without limitation of or prejudice to Executive's rights with respect to
(i) a termination for Good Reason pursuant to Section 6(e)(viii), or (ii) a termination without Cause pursuant to Section 6(g), as applicable. 

        3.    Offices and Duties.    

        (a)  During
the Term, Executive shall serve as Chairman of the Board, President and Chief Executive Officer of the Company and shall report solely to the Board of Directors
of the Company (the "Board"). Executive agrees to serve during the Term as a member of the Board, and of any Board committee to which the Board may elect him. 

        (b)  Executive
shall perform such duties and responsibilities and have such authority as are customary for the chairman of the board, president and chief executive officer of
a publicly held corporation of the size, type, and nature of the Company as they may exist from time to time, but in no event shall such duties, responsibilities and authority be reduced from those of
Executive at the Effective Date. 

 

        (c)  Executive
shall devote his full business time and attention and best efforts to his positions with the Company without commitment to other business endeavors, except
that so long as such activities do not preclude or render unlawful Executive's employment by the Company or otherwise materially inhibit the performance of his duties under this Agreement or
materially impair the business of the Company or its subsidiaries, Executive (i) may make personal investments which are not in conflict with his duties to the Company and manage personal and
family financial and legal affairs, (ii) may continue to serve on any board of directors on which he is known by the Board to be serving on the Effective Date, as specified in Schedule A
hereto, (iii) may undertake public speaking engagements, and (iv) may serve as a director of (or hold a similar position with) any other organization. 

        (d)  Executive
shall be the highest-ranking executive of the Company. 

        4.    Compensation.    

        (a)    Base Salary.    During the Term the Company shall pay Executive a base salary (the "Base Salary") at the
initial rate of $750,000 per annum, payable biweekly (except to the extent deferred under a deferred compensation plan) and subject to all withholdings that are legally required or are agreed to by
Executive. The Base Salary shall be increased annually on each January 1 during the Term by a percentage of the Base Salary then in effect equal to the percentage increase, if any, during the
preceding twelve months in the Consumer Price Index for the Greater New York area. In no event shall the Base Salary be reduced. 

        (b)    Incentive Compensation.    Executive shall have the opportunity annually to earn incentive compensation in
amounts determined by the Compensation Committee of the Board (the "Committee") in accordance with the applicable plan(s) of the Company as in effect from time to time; provided, however, that
(i) Executive shall have the opportunity to earn annually up to 100% of the Base Salary as incentive compensation pursuant to, and subject to the terms and conditions of, the Company's
Management Incentive Compensation Plan as in effect from time to time (provided, however, that if no Management Incentive Compensation Plan is in effect at any relevant time, or if such plan, as in
effect at any relevant time, does not provide a reasonable opportunity for Executive to earn annually up to 100% of the Base Salary as incentive compensation, then the Company shall provide such
reasonable opportunity to Executive independently of such plan, and provided further that Executive may in the discretion of the Committee or the Board receive additional incentive compensation); and
(ii) Executive's annual opportunity for incentive compensation shall, for each year, be on terms and conditions at least as favorable to Executive as the most favorable terms and conditions for
incentive compensation offered to any other employee of the Company for such year. Any incentive compensation payable to Executive shall be paid in accordance with the Company's usual practices with
respect to payment of incentive compensation to its other senior executives (except to the extent deferred under a deferred compensation plan). To accommodate the change in the Company's fiscal year
end from October 31 to December 31, the first annual period during the Term for purposes of Executive's incentive compensation shall be the fourteen-month period from the Effective Date
through December 31, 2001, and Executive's annual opportunity for incentive compensation based on Base Salary for such first annual period of the Term, ending December 31, 2001, shall be
determined with reference to the Base Salary (as determined in accordance with the terms hereof) payable in respect of such fourteen-month period. Notwithstanding anything to the contrary herein or in
any plan, policy or program of the Company, any other compensation or benefit to which Executive is entitled that is based on a fiscal year of the Company shall be computed for fiscal year 2001 so
that the months of November and December 2000 are included in such computation for the benefit of Executive, except to the extent (if any) that (i) such months previously had been
reflected in a computation of such compensation or benefit, or (ii) inclusion of such months would otherwise result in a duplication or overlap of such compensation or benefit or the
computation thereof; provided, however, that if, in the case of clause (i) or (ii) above, the amount or value of such 

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compensation or benefit in respect of such months (or portion thereof) as so computed is less than what the amount or value of such compensation or benefit would be for such months (or portion
thereof) if such months (or portion thereof) had been included in the computation of such
compensation or benefit for fiscal year 2001, then the amount or value of such compensation or benefit for fiscal year 2001 shall be increased by the amount of such difference (it being understood
that, for the computation of any compensation or benefit which is based on a comparison between amounts with respect to a given reference period, including, without limitation, for purposes of
Section 5(h) of this Agreement, the amounts to be compared shall each be computed for the same reference period). 

        (c)    Executive Compensation Plans.    Executive shall be entitled during the Term to participate, without
discrimination or duplication, in the Company's supplemental executive retirement plan and all other executive compensation plans and programs which are made generally available by the Company to its
other senior executives (including, without limitation, any stock option plans, performance share plans, management incentive plans, deferred compensation plans, and supplemental retirement plans) in
accordance with the terms of such plans and programs and subject to the Company's right to at any time amend or terminate any such plan or program; provided, however, that Executive shall be eligible
to participate in such executive compensation plans and programs on terms and conditions at least as favorable to Executive as the most favorable terms and conditions offered to any other employee of
the Company. 

        5.    Benefits.    

        (a)  The
Company shall reimburse Executive for all reasonable and necessary travel, business entertainment and other business expenses incurred by Executive in connection
with the performance of his duties under this Agreement, on a timely basis upon submission by Executive of vouchers therefor in accordance with the Company's standard procedures. 

        (b)  Executive
shall be entitled to participate, without discrimination or duplication, in any and all medical insurance, group health, disability, life, accidental death,
dismemberment insurance, pension, retirement, profit sharing, stock ownership and other insurance, benefit, fringe benefits and perquisite plans and programs which are made generally available by the
Company to its other senior executives; provided, however, that Executive shall be eligible to participate in such insurance, benefit, fringe benefit and perquisite plans and programs on terms and
conditions at least as favorable to Executive as the most favorable terms and conditions offered to any other employee of the Company. The Company, in its sole discretion, may at any time amend or
terminate any such plans or programs; provided, however, that: 

        (i)    At
all times during the Term, such plans and programs in effect, in the aggregate, shall provide Executive with benefits and compensation substantially no less favorable
than is provided by the Company to Executive under such plans and programs as of the Effective Date; 

        (ii)  The
Company shall provide Executive with long-term disability insurance and benefits substantially no less favorable (including any required contributions
by Executive) than such insurance and benefits in effect on the Effective Date; and 

        (iii)  The
Company shall provide Executive with Company-paid group and individual term life insurance providing a death benefit no less than that provided under
Company-paid insurance in effect on the Effective Date. 

        (c)  If
the Company adopts an equity investment program permitting executives to elect to forego salary, annual incentive, other bonuses, annual option opportunities under
long-term incentive plans, or other specified compensation or benefits in exchange for a grant of stock options, restricted stock or other equity or non-equity awards or
benefits, Executive will be eligible to participate in such program on terms no less favorable than the terms of participation of any other employee of the Company. 

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        (d)  Executive
shall be entitled to participate in the Company's deferred compensation plan in accordance with the terms of such plan and subject to the Company's right to at
any time amend or terminate any such plan. 

        (e)  Executive
shall be entitled to paid vacation, holidays, and any other time off in accordance with the Company's policies in effect from time to time. 

        (f)    The
Company will use its best efforts to file with the Securities and Exchange Commission and thereafter maintain the effectiveness of one or more registration
statements registering under the Securities Act of 1933, as amended, the offer and sale of shares by the Company to Executive pursuant to stock options or other equity-based awards granted to
Executive under Company plans. All outstanding stock options then held by Executive shall become fully vested and non-forfeitable (i) upon the occurrence of any of the events
described in clauses (i) through (vii) of Section 6(e) and the Company's failure to cure such event within thirty (30) days after its receipt of notice thereof from
Executive, (ii) in the event that during any period of three consecutive months, individuals who at the beginning of such period constitute the Board cease for any reason (except action by any
stockholder of the Company) to constitute at least one-third (1/3) of the Board, or (iii) upon the failure (except solely by reason of Executive's own actions) of the
Board or the Company to approve or effectively seek to implement, in all material respects, any material strategic plan or initiative for the Company, that, in any such case, has been proposed in
writing in good faith by Executive (provided that upon such vesting the period of time afforded to the Company, pursuant to Section 6(e), to otherwise cure any conduct alleged to constitute
Good Reason within the meaning of such Section 6(e) shall be extended from thirty (30) days to ninety (90) days). 

        (g)  Executive
shall be deemed to have commenced employment with the Company on August 1, 1990, for purposes of calculating Executive's period of service under this
Agreement except to the extent, if any, that any provision of this Agreement specifically credits Executive with a longer period of service for purposes of such provision. 

        (h)  For
purposes of computing the "Retirement Benefit" or equivalent payment or benefit due to Executive under any SERP (as defined in Section 7(a) below) in which
Executive participates during the Term, or any payment or benefit under Section 7 of this Agreement in lieu of any SERP benefit or payment, the "Final Average Compensation" or equivalent
reference compensation amount, in the case of Executive, shall, notwithstanding the terms of such SERP, be the higher of (x) such amount as otherwise determined pursuant to the terms of the
SERP or (y) an amount equal to the sum of (i) Executive's then-current Base Salary immediately prior to termination plus (ii) such then-current Base Salary
multiplied by (A) the sum of the Incentive Compensation Percentages for each of the Reference Years divided by (B) 3; where (X) "Incentive Compensation Percentage" for a Reference
Year means the percentage expressed by dividing the aggregate incentive compensation and bonuses paid to Executive in such Reference Year by Executive's Base Salary in such Reference Year, and
(Y) "Reference Year" means each of the three consecutive calendar years with the highest Incentive Compensation Percentages during the period of ten calendar years immediately preceding
termination. 

        6.    Termination.    Executive's employment hereunder may be terminated prior to the end of the Term under the
following circumstances: 

        (a)    Death; Total Disability.    Executive's employment hereunder shall terminate upon Executive's death, and the
Company may terminate Executive's employment hereunder in the event of Executive's "Total Disability." For purposes of this Agreement, "Total Disability" shall mean Executive's failure to perform the
duties and responsibilities contemplated under this Agreement for a period of more than 180 days during any consecutive 12-month period, due to physical or mental incapacity or
impairment as determined by a physician or physicians selected by the Company and reasonably acceptable to Executive unless, within 30 days after Executive has received written notice from the
Company of a proposed termination due to such failure (as determined in accordance with the foregoing provisions of 

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this sentence) which notice shall include a copy of the findings of such physician or physicians and shall refer to this Section 6(a), Executive shall have returned to the full performance of
his duties hereunder and shall have presented to the Company a written certificate of Executive's good health by a physician selected by Executive and reasonably acceptable to the Company. 

        (b)    Retirement.    Executive may terminate his employment hereunder upon retirement at or after age 65 or at or
after age 55 following at least 10 years of full-time employment with the Company ("Normal Retirement") or prior to such age upon approval by the Committee ("Approved Early
Retirement"), in each case upon forty-five (45) days' prior written notice to the Company referring to this Section 6(b). 

        (c)    Termination by the Company for Cause.    The Company may terminate Executive's employment hereunder for Cause
at any time upon written notice to Executive referring to this Section 6(c). For purposes of this Agreement, the term "Cause" shall mean Executive's gross misconduct (as defined herein) or
willful and material breach of Section 10.1(a) (other than the first sentence thereof), 10.1(b), 10.2 (other than the first and penultimate sentences thereof), 10.3, 10.4, or 10.8. For purposes
of this definition, "gross misconduct" shall mean (i) Executive's conviction in a court of law of a felony under
applicable federal or state law that was committed while Executive was employed by the Company, or (ii) Executive's willful and continued failure substantially to perform his material duties
under this Agreement or any act or omission on the part of Executive not requested or approved by the Board constituting willful malfeasance or gross negligence in the performance of Executive's
material duties under this Agreement. For purposes of this Agreement, an act or failure to act on Executive's part shall be considered "willful" if it was done or omitted to be done by him not in good
faith and shall not include any act or failure to act resulting from any physical or mental incapacity or impairment of Executive. Executive may not be terminated for Cause unless and until there
shall have been delivered to him, within ninety (90) days after the Board (A) had actual knowledge of conduct or an event allegedly constituting Cause and (B) had reason to
believe that such conduct or event could be grounds for termination for Cause, a copy of a resolution duly adopted by the Board by a vote of Directors constituting a majority of the Board (excluding
Executive) at a meeting of the Board which a quorum is present and which is called and held for such purpose (after giving Executive reasonable notice of the specific grounds for such termination and,
except if a felony conviction is the grounds for termination, 30 days to correct such grounds, and affording Executive and his counsel the opportunity to be heard before the Board) finding
that, in the good faith opinion of the Board, Executive was guilty of conduct constituting Cause (the "Cause Resolution"). 

        If,
within 30 days of Executive's receipt of notice of his termination for Cause, Executive in good faith files a claim in arbitration disputing the termination for Cause,
Executive shall, during the pendency of the arbitration, be considered a suspended employee of the Company and be entitled to receive compensation and benefits under this Agreement as if he had not
been terminated. If the arbitration panel finds that the Company had Cause to terminate Executive's employment, Executive shall, within 5 days of the arbitration award, repay any amounts
provided to him by the Company in respect of periods commencing after his termination, including but not limited to salary continuation and the value of all benefits provided to Executive in respect
of periods commencing after his termination, in excess of any amounts to which he was entitled under this Agreement upon a termination for Cause. If the arbitration panel finds that the Company did
not have Cause to terminate Executive's employment: (x) Executive's employment shall be deemed to have been terminated without Cause as of the date which is 90 days after the date of
notice of his termination for Cause; and (y) any amounts paid to Executive by the Company in respect of periods commencing after 90 days following the date of the notice of his
termination for Cause, including but not limited to salary continuation and the value of all benefits provided to Executive, shall be credited against amounts owed to Executive under
Section 7(c) of this Agreement. 

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        (d)    Termination by the Company Without Cause.    The Company may terminate Executive's employment hereunder at any
time, without Cause, for any reason or no reason. 

        (e)    Termination by Executive for Good Reason.    Executive may terminate his employment hereunder for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean: without Executive's prior written consent, (i) a material change, adverse to Executive, in Executive's positions, titles or offices as
set forth in Section 3, or status rank, nature of responsibilities, or authority within the Company, or removal of Executive from, or failure to nominate, reappoint or reelect Executive as the
Chairman of the Board, or as a member of any Board committee on which he has served during the Term (except if
required by a change in law, accounting rule, or the rules of any national securities exchange or automated quotation system on which the Company's securities may be listed or quoted), including a
failure of the Board or stockholders to take such actions (notwithstanding their legal right to do so), except, in such case, in connection with the termination of Executive's employment for Cause,
Total Disability, Normal Retirement or Approved Early Retirement, or death, (ii) an assignment of any significant duties to Executive which are inconsistent with his positions or offices held
under Section 3, (iii) a decrease in Base Salary or other compensation or in any compensation opportunities or a material decrease in the aggregate benefits provided under this
Agreement, (iv) any other failure by the Company to perform any material obligation under, or breach by the Company of any material provision of, this Agreement, (v) a relocation of the
Corporate Offices of the Company more than 35 miles from the latest location of such offices prior to such relocation, (vi) any failure to secure the agreement of any successor corporation or
other entity to the Company to fully assume the Company's obligations under this Agreement in a form reasonably acceptable to Executive, (vii) any attempt by the Company to terminate Executive
for Cause which does not result in a valid termination for Cause, except where (x) valid grounds for Cause exist but are corrected as permitted under Section 6(c) or (y) the
Company, prior to 35 days after Executive's receipt of a copy of the Cause Resolution, revokes the Cause Resolution, takes any and all other steps reasonably necessary to retract its
allegations of Cause and fully restore Executive to active employment in accordance with the terms of this Agreement, effective immediately prior to the adoption of the Cause Resolution, and pays (or
reimburses Executive for) any costs and expenses reasonably incurred by Executive in connection with such attempted termination, and (viii) the failure of the parties to agree in writing at the
end of the Term (or any extension thereof) to the terms of Executive's continued employment where only Executive, and not the Company, has given notice electing not to further extend the Term pursuant
to the last sentence of Section 2. Executive shall not be considered to have terminated for Good Reason unless Executive shall have provided the Company with written notice of the specific
reasons for such termination within ninety (90) days after he has actual knowledge of the event that is the basis for such termination and (except in the case of a termination pursuant to
clause (vii) or (viii) of the preceding sentence) affords the Company at least thirty (30) days to cure the alleged conduct. 

        (f)    Termination by Executive for Other than Good Reason.    Executive may terminate his employment hereunder for
any reason or no reason upon thirty (30) days' prior written notice to the Company referring to this Section 6(f); provided, however, that a termination of Executive's employment by
reason of death, Total Disability, Normal or Early Retirement, or Good Reason shall not constitute a termination by Executive for other than Good Reason pursuant to this Section 6(f). 

        (g)    Termination Upon the Company's Failure to Extend the Term.    An election by the Company not to extend the Term
pursuant to Section 2 hereof shall be deemed for all purposes of this Agreement (including, without limitation, for purposes of Sections 7(c) and 10.1(a) hereof) to be a termination of
Executive's employment hereunder by the Company without Cause as of the date of expiration of the Term. 

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        7.    Compensation Following Termination Prior to the End of the Term.    In the event that Executive's employment
hereunder is terminated prior to the end of the Term, Executive shall be entitled only to the following compensation and benefits: 

        (a)    Termination by Reason of Death, Normal Retirement, or Approved Early Retirement.    In the event that
Executive's employment is terminated prior to the expiration of the Term by reason of Executive's death, pursuant to Section 6(a), or by reason of his Normal Retirement or Approved Early
Retirement pursuant to Section 6(b), the Company shall pay the following amounts, and make the following other benefits available, to Executive (or Executive's spouse or estate, as the case may
be): 

        (i)    Any
accrued but unpaid Base Salary (as determined pursuant to Section 4(a)) for services rendered to the date of termination; 

        (ii)  All
vested, nonforfeitable amounts owing or accrued at the date of termination under any compensation and benefit plans, programs, and arrangements set forth or
referred to in Sections 4(b), 4(c), and 5 (including any earned and vested annual incentive compensation and long term incentive award but excluding any incentive compensation under
Section 4(b) for the year of termination) in which Executive theretofore participated, to be paid in accordance with the terms and conditions of such plans, programs, and arrangements (and
agreements and documents thereunder); 

        (iii)  In
lieu of any incentive compensation under Section 4(b) for the year of termination, an amount equal to the amount of annual incentive compensation payable to
Executive assuming achievement of the maximum performance targets for such year, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination
and the denominator of which is the total number of days in the year of termination; 

        (iv)  Stock
options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and any
such options which were granted on or after November 1, 1997 (that is, the Effective Date of the Old Agreement) shall remain exercisable until the earlier of three years after the date of such
termination or the scheduled expiration date, and, in other respects, all such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options
were granted; 

        (v)  All
deferred stock awards, and all deferral arrangements under any deferred compensation plan, will be settled in accordance with the plans and programs under which the
awards were granted or governing the deferral including, if so permitted by the plans or programs, Executive's duly executed deferral election forms or the terms of any mandatory deferral; 

        (vi)  Reasonable
business expenses and disbursements incurred by Executive prior to such termination will be reimbursed in accordance with Section 5(a); 

        (vii) If
Executive's employment terminates due to his Normal Retirement or Approved Early Retirement, Executive may elect continued participation after termination in the
Company's health and medical coverage for himself and his spouse and dependent children after such coverage would otherwise end until such time as Executive becomes eligible for Medicare; provided,
however, that in the event of such election, Executive shall pay the Company each year an amount equal to the then-current annual COBRA premium being paid (or payable) by any other former
employee of the Company; 

        (viii)  Executive
shall be entitled to designate (and change, to the extent permitted under applicable law) a beneficiary or beneficiaries to receive any
compensation or benefits payable hereunder following Executive's death; 

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        (ix)  In
lieu of any payments and benefits under any supplemental executive retirement plan or substantially similar plan (a "SERP") in which Executive participated during
the Term, Executive shall be entitled to receive the greater of: (y) all payments and benefits to which Executive otherwise would have been entitled under the SERP (computed in accordance with
Section 5(h) hereof); and (z) all payments and benefits to which Executive otherwise would have been entitled under the SERP (computed in accordance with Section 5(h) hereof) if
Executive had 15 years of service with the Company. Such payments and benefits shall be payable in a lump sum or in equal installments, as determined by Executive in his discretion, in
accordance with the terms and conditions of the SERP; provided, however, that Executive shall not be entitled to receive payments in installments unless at least 12 months prior to the date of
the termination of his employment, he elected to receive payments in installment form under the SERP. If Executive receives such payment(s) under this Section 7(a)(ix), Executive shall forfeit
all rights under the SERP, and the SERP shall have no force and effect with respect to Executive; 

Provided,
however, that Executive will be entitled to the benefit of any terms of plans or agreements applicable to Executive which are more favorable than those specified in this Section 7(a). 

        Amounts
payable under (i), (ii), (iii), and (vi) above will be paid as promptly as practicable after termination of Executive's employment; provided, however, that, to the extent
that the Company would not be entitled to deduct any such payments (other than those under (i) above) under Internal Revenue Code Section 162(m), such payments shall be made at the
earliest time that the payments would be deductible by the Company without limitation under Section 162 (m) (unless this provision is waived by the Company). 

        (b)    Termination by the Company for Cause; Termination by Executive for Other than Good Reason.    In the event that
Executive's employment is terminated by the Company for Cause pursuant to Section 6(c) or
by Executive for other than Good Reason pursuant to Section 6(f), the Company shall pay the following amounts, and make the following other benefits available, to Executive: 

        (i)    Any
accrued but unpaid Base Salary (as determined pursuant to Section 4(a)) for services rendered to the date of termination; 

        (ii)  All
vested nonforfeitable amounts owing or accrued at the date of termination under any compensation and benefit plans, programs, and arrangements set forth or referred
to in Sections 4(b), 4(c), and 5 hereof (including any earned and vested annual incentive compensation) in which Executive theretofore participated will be paid under the terms and conditions of such
plans, programs, and arrangements (and agreements and documents thereunder); 

        (iii)  Except
as provided in Section 10.6, all stock options and deferred stock awards will be governed by the terms of the plans and programs under which the options
or awards were granted; 

        (iv)  Non-forfeitable
amounts credited to any deferral account of Executive under deferral arrangements referred to in Section 5(d) hereof at the date of
termination will be settled in accordance with the plans and programs under which the awards were granted or governing the deferral including, if so permitted by the plans or programs, Executive's
duly executed deferral election forms or the terms of any mandatory deferral; and 

        (v)  Reasonable
business expenses and disbursements incurred by Executive prior to such termination will be reimbursed, in accordance with Section 5(a). 

Amounts
payable under (i), (ii), and (v) above will be paid as promptly as practicable after termination of Executive's employment; provided, however, that, to the extent that the Company would
not be entitled to deduct any such payments under Internal Revenue Code Section 162(m), such payments shall be made at the earliest time that the payments would be deductible by the Company
without limitation under Section 162(m) (unless this provision is waived by the Company). 

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        (c)    Termination by Reason of Total Disability; Termination by the Company Without Cause; Termination by Executive For Good
Reason.    In the event that Executive's employment is terminated by reason of Total Disability pursuant to Section 6(a), or by the Company without Cause
pursuant to Section 6(d) or 6(g),
or by Executive for Good Reason pursuant to Section 6(e), the Company shall pay the following amounts, and make the following other benefits available, to Executive: 

        (i)    A
lump sum cash payment in an amount equal to three times the sum of (x) Executive's then-current Base Salary at the rate payable in accordance with
Section 4(a) hereof, at the date of termination plus (y) the Severance Annual Incentive Amount (as defined below), will be paid to Executive; provided, however, that Executive may elect
to receive the amount payable under this Section 7(c)(i) in equal monthly installments over the 36 months following termination, without interest, in lieu of receiving a lump sum
cash payment. For purposes of this Section 7(c)(i) and Section 7(c)(iv), the "Severance Annual Incentive Amount" shall be the greater of (1) the average annual incentive
compensation paid to Executive for the three years immediately preceding the year of termination or (2) the annual incentive compensation payable to Executive upon achievement of the maximum
performance targets for the year of termination; 

        (ii)  The
unpaid portion of Base Salary at the rate payable, in accordance with Section 4(a) hereof, at the date of termination, pro rated through such date of
termination, will be paid; 

        (iii)  All
vested, nonforfeitable amounts owing or accrued at the date of termination under any compensation and benefit plans, programs, and arrangements set forth or
referred to in Sections 4(b) and 5(a) and 5(c) hereof (including any earned and vested annual incentive compensation) in which Executive theretofore participated will be paid under the terms and
conditions of such plans, programs, and arrangements (and agreements and documents thereunder); 

        (iv)  In
lieu of any annual incentive compensation under Section 4(b) for the year in which Executive's employment terminated (unless otherwise payable under
(iii) above), Executive will be paid an amount equal to (X) the Severance Annual Incentive Amount as defined in Section 7(c)(i), multiplied by (Y) a fraction the numerator
of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination; 

        (v)  Stock
options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and any
such options which were granted on or after November 1, 1997 or, if previously granted, were not "in the money" as of November 1, 1997 shall remain exercisable until the scheduled
expiration date, and, in other respects, all such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted; 

        (vi)  Deferred
stock held by Executive at termination will become fully vested and non-forfeitable, and shall be settled upon such termination, without regard to
any stated period of deferral otherwise remaining in respect of such amounts; 

        (vii) Executive
shall be entitled to receive an amount equal to the amount accrued under any deferred compensation plan or agreement in effect at the date of termination in
which Executive is a participant or party, less required withholding taxes under Section 9, as promptly as practicable following such date of termination; the amount paid under this
Section 7(c)(vii) shall be equal to Executive's account balance on the date of the termination of Executive's employment if the deferred compensation amount is in the form of an account
balance or, if the deferred compensation amount is not in the form of an account balance, the present value of the deferred compensation on the date of the termination of Executive's employment,
calculated using a discount rate (the "Discount Rate") equal to the yield, at the time of determination, for U.S. Treasury securities having a maturity of thirty years; if Executive elects to receive
payment under 

9

 

this Section 7(c)(vii), Executive shall forfeit all rights under any such deferred compensation plan or agreement, and such deferred compensation plan or agreement shall have no force and
effect with respect to Executive; 

        (viii)  Reasonable
business expenses and disbursements incurred by Executive prior to such termination will be reimbursed, in accordance with
Section 5(a); 

        (ix)  For
(A) a period of 3 years after such termination other than due to Total Disability or (B) the period from termination due to Total Disability
until Executive attains age 65, Executive shall continue to participate in all employee and executive benefit plans, programs, and arrangements under Section 5 providing health, medical,
disability and life insurance benefits in which Executive was participating immediately prior to termination, the terms of which allow Executive's continued participation, as if Executive had
continued in employment with the Company during such period or, if such plans, programs, or arrangements do not allow Executive's continued participation, Executive shall receive a cash payment
equivalent on an after-tax basis to the value of the additional benefits Executive would have received under such plans, programs, and arrangements in which Executive was participating
immediately prior to termination, as if Executive had received credit under such plans, programs, and arrangements for service and age with the Company during such period following Executive's
termination as provided in clause (A) or (B) above (as applicable), with such benefits payable by the Company at the same times and in the same manner as such benefits would have been
received by Executive under such plans (it being understood that the value of any insurance-provided benefits will be based on the premium cost to Executive, which shall not exceed the highest risk
premium charged by a carrier having an investment grade or better credit rating); 

        (x)  In
lieu of any payments and benefits under any SERP in which Executive participated during the Term, Executive shall be entitled to receive the greater of:
(y) all payments and benefits to which Executive otherwise would have been entitled under the SERP (computed in accordance with Section 5(h) hereof); and (z) all payments and
benefits to which Executive otherwise would have been entitled under the SERP if Executive had 15 years of service with the Company (computed in accordance with Section 5(h) hereof).
Such payments and benefits shall be payable in a lump sum or in equal installments, as determined by Executive in his discretion, in accordance with the terms and conditions of the SERP; provided,
however, that Executive shall not be entitled to receive payments in installments unless at least 12 months prior to the date of the termination of his employment, he elected to receive
payments in installment form under the SERP; if Executive receives such payment(s) under
this Section 7(c)(x), Executive shall forfeit all rights under the SERP, and the SERP shall have no force and effect with respect to Executive; 

        Provided,
however, that if the Company terminates Executive's employment without Cause and does not provide Executive with at least 90 days' prior written notice of such
termination, the date of Executive's termination for all purposes of this Agreement except Section 7(c)(viii) shall be the 90th day after Executive received written notice from the
Company of the termination; and 

        Provided
further that Executive will be entitled to the benefit of any terms of plans or agreements applicable to Executive which are more favorable than those specified in this
Section 7(c). Except as otherwise expressly provided above, amounts payable under this Section 7(c), will be paid as promptly as practicable after termination of Executive's employment,
and in no event more than 30 days after such termination. 

        Notwithstanding
the foregoing, if a reduction in Base Salary or other level of compensation or benefit was a basis for Executive's termination for Good Reason, the Base Salary or other
level of compensation in effect before such reduction shall be used to calculate payments or benefits under this Section 7(c). 

10

 

        (d)    No Obligation to Mitigate.    Executive shall not be required to seek other employment or otherwise to mitigate
Executive's damages upon any termination of employment; provided, however, that, to the extent Executive receives from a subsequent employer health or other insurance benefits substantially similar to
the benefits referred to in Section 5, any such benefits to be provided by the Company to Executive following the Term shall be correspondingly reduced. 

        (e)    No Other Benefits or Compensation.    Except as may be provided under this Agreement, under any other written
agreement between Executive and the Company, or under the terms of any plan or policy applicable to Executive, Executive shall have no right to receive any other compensation from the Company, or to
participate in any other plan, arrangement or benefit provided by the Company, with respect to any future period after such termination or resignation. 

        (f)    Release of Employment Claims.    Executive agrees, as a condition to receipt of any termination payments and
benefits provided for in Section 7 (other than compensation and benefits earned through the date of termination), that he will execute a general release agreement, in a form reasonably
satisfactory to the Company, releasing any and all claims arising out of Executive's employment (other than enforcement of this Agreement) 

        8.    Excise Tax Restoration Payment.    Notwithstanding anything to the contrary in this Agreement, in the event that
any payment or distribution of any type to or for the benefit of Executive made by the Company, by any of its affiliates, by any person who acquires ownership or effective control or ownership of a
substantial portion of the Company's assets (within the meaning of section 280G of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the "Code")) or by any
affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of an employment agreement or otherwise (the "Total Payments"), would be subject to the excise
tax imposed by section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are collectively referred to
as the "Excise Tax"), then Executive shall be entitled to receive an additional payment (an "Excise Tax Restoration Payment") in an amount that shall fund the payment by Executive of any Excise Tax on
the Total Payments as well as all income taxes imposed on the Excise Tax Restoration Payment, any Excise Tax imposed on the Excise Tax Restoration Payment and any interest or penalties imposed with
respect to taxes on the Excise Tax Restoration or any Excise Tax. 

        9.    Offsets; Withholding.    Amounts required to be paid by the Company to Executive pursuant to this Agreement
shall not be subject to offset except for any amounts that are owed to the Company by Executive due to his receipt of funds as a result of his fraudulent activity. The foregoing and other provisions
of this Agreement notwithstanding (but without limiting the terms of Section 8), all payments to be made to Executive under this Agreement, including under Section 7, or otherwise by the
Company will be subject to required withholding taxes and other legally required deductions. 

        10.    Noncompetition; Nonsolicitation; Nondisclosure; etc.    

        10.1    Noncompetition; Nonsolicitation.    

        (a)  Executive
acknowledges the highly competitive nature of the Company's business and that access to the Company's confidential records and proprietary information renders
him special and unique within the Company's industry. In consideration of the amounts that may hereafter be paid to Executive pursuant to this Agreement (including, without limitation, Sections 4 and
7), Executive agrees that during the Term (and any extensions thereof) and during the Covered Time (as defined in Section 10.1(e)), Executive, alone or with others, will not, directly or
indirectly, engage (as owner, investor, partner, stockholder, employer, employee, consultant, advisor, director or otherwise) in any business in which he has been directly engaged on behalf of the
Company, or which he has supervised as an executive thereof, during the last two years prior to such termination, or was engaged in by the Company with Executive's actual knowledge or planned by the
Company with Executive's actual 

11

 

knowledge at the time of such termination, in any geographic area in which such business was conducted or planned to be conducted (a "Competing Business"); provided, however, that this
Section 10.1(a) shall not restrict Executive from engaging in (and the term "Competing Business" shall not include) any business in which the Company no longer engages or plans to engage;
provided further that this Section 10.1(a) shall not apply if Executive terminates his employment for Good Reason pursuant to clause (i), (ii), (iii), (iv), (v), (vi), or (vii) of
Section 6(e) or if Executive's employment
is terminated by the Company without Cause; and provided further that activities of the Company, or activities engaged in by Executive for or on behalf of the Company, are not restricted by this
Section 10.1(a) and shall not constitute a "Competing Business." Ownership of (i) the securities of any entity for which a Competing Business represents less than 10% of net sales or net
income (as determined in accordance with generally accepted accounting principles) for the most recent fiscal year (or if such entity has not completed a fiscal year, net sales or net income projected
for its first fiscal year) or (ii) not more than two percent of the equity securities of any company having securities listed on an exchange or regularly traded in the
over-the-counter market shall not, of itself, be deemed inconsistent with this Section 10.1(a). Nothing herein shall require Executive to sell or otherwise dispose of
any securities of any entity if the acquisition of such securities did not violate the terms of this Section 10.1(a) at the time of such acquisition. 

        (b)  In
further consideration of the amounts that may hereafter be paid to Executive pursuant to this Agreement (including, without limitation, Sections 4, 5, and 7),
Executive agrees that during the Term (including any extensions thereof) and during the Covered Time he shall not, directly or indirectly, (i) solicit or attempt to induce any of the employees,
agents, consultants or representatives of the Company to terminate his, her, or its relationship with the Company; (ii) solicit or attempt to induce any of the employees, agents, consultants or
representatives of the Company to become employees, agents, consultants or representatives of any other person or entity; (iii) solicit or attempt to induce any customer, vendor or distributor
of the Company to curtail or cancel any business with the Company; or (iv) hire any person who, to Executive's actual knowledge, is, or was within 180 days prior to such hiring, an
employee of the Company. 

        (c)  During
the Term (including any extensions thereof) and during the Covered Time, Executive agrees that upon the earlier of Executive's (i) negotiating with any
Competitor (as defined below) concerning the possible employment of Executive by the Competitor, (ii) responding to (other than for the purpose of declining) an offer of employment from a
Competitor, or (iii) becoming employed by a Competitor, (x) Executive will provide copies of Section 10 of this Agreement to the Competitor, and (y) in the case of any
circumstance described in (i) or (ii) above occurring during the Covered Time, and in the case of any circumstance described in (iii) above occurring during the Term or during the
Covered Time, Executive will promptly provide notice to the Company of such circumstances. Executive further agrees that the Company may provide notice to a Competitor of Executive's obligations under
this Agreement. For purposes of this Agreement, "Competitor" shall mean any entity (other than the Company) that engages, directly or indirectly, in the United States in any Competing Business. 

        (d)  Executive
understands that the restrictions in this Section 10.1 may limit his ability to earn a livelihood in a business similar to the business of the Company
but nevertheless agrees and acknowledges that the consideration provided under this Agreement (including, without limitation, Sections 4, 5, and 7) is sufficient to justify such restrictions.
In consideration thereof and in light of Executive's education, skills and abilities, Executive agrees that he will not assert in any forum that such restrictions prevent him from earning a living or
otherwise should be held void or unenforceable. 

        (e)  For
purposes of this Section 10.1, "Covered Time" shall mean the period beginning on the date of termination of Executive's employment (the "Date of Termination")
and ending twenty-four months after the Date of Termination; provided, however, that if Executive terminates his employment for Good Reason pursuant to clause (viii) of
Section 6(e), "Covered Time" shall mean for purposes of 

12

 

Section 10.1(a) the period beginning on the Date of Termination and ending six months after the Date of Termination. 

            10.2    Proprietary Information.    Executive acknowledges that during the course of his employment with
the Company he will necessarily have access to and make use of proprietary information and confidential records of the Company. Executive covenants that he shall not during the Term or at any time
thereafter, directly or indirectly, use for his own purpose or for the benefit of any person or entity other than the Company, nor otherwise disclose to any individual or entity, any such proprietary
information, unless such disclosure has been authorized in writing by the Company or is otherwise required by law. The term "proprietary information" means: (a) the software products, programs,
applications, and processes utilized by the Company; (b) the name and/or address of any customer or vendor of the Company or any information concerning the transactions or relations of any
customer or vendor of the Company with the Company; (c) any information concerning any product, technology, or procedure employed by the Company but not generally known to its customers or
vendors or competitors, or under development by or being tested by the Company but not at the time offered generally to customers or vendors; (d) any information relating to the Company's
computer software, computer systems, pricing or marketing methods, sales margins, cost of goods, cost of material, capital structure, operating results, borrowing arrangements or business plans;
(e) any information identified as confidential or proprietary in any line of business engaged in by the Company; (f) any information that, to Executive's actual knowledge, the Company
ordinarily maintains as confidential or proprietary; (g) any business plans, budgets, advertising or marketing plans; (h) any information contained in any of the Company's written or
oral policies and procedures or manuals; (i) any information belonging to customers, vendors or any other person or entity which the Company, to Executive's actual knowledge, has agreed to hold
in confidence; (j) any inventions, innovations or improvements covered by this Agreement; and (k) all written, graphic, electronic data and other material containing any of the
foregoing. Executive acknowledges that information that is not novel or copyrighted or patented may nonetheless be proprietary information. The term "proprietary information" shall not include
information generally known or available to the public or generally known or available to the industry or information that becomes available to Executive on a non-confidential basis from a
source other than the Company or its directors, officers, employees, or agents (without breach of any obligation of confidentiality of which Executive has actual knowledge at the time of the relevant
disclosure by Executive.) 

            10.3    Confidentiality and Surrender of Records.    Executive shall not during the Term or at any time
thereafter (irrespective of the circumstances under which Executive's employment by the Company terminates), except as required by law, directly or indirectly publish, make known or in any fashion
disclose any confidential records to, or permit any inspection or copying of confidential records by, any individual or entity other than in the course of such individual's or entity's employment or
retention by the Company, nor shall he retain, and will deliver promptly to the Company, any of the same following termination of his employment hereunder for any reason or upon request by the
Company. For purposes hereof, "confidential records" means those portions of correspondence, memoranda, files, manuals, books, lists, financial, operating or marketing records, magnetic tape, or
electronic or other media or equipment of any kind in Executive's possession or under his control or accessible to him which contain any proprietary information. All confidential records shall be and
remain the sole property of the Company during the Term and thereafter. 

            10.4    Nondisparagement.    Executive shall not, during the Term and thereafter, disparage in any
material respect the Company, any affiliate of the Company, any of their respective businesses, any of their respective officers, directors or employees, or the reputation of any of the foregoing
persons or entities. Notwithstanding the foregoing, nothing in this Agreement shall preclude 

13

 

Executive from making truthful statements that are required by applicable law, regulation or legal process or are reasonably required to describe the conduct, decisions, or policies of the Company or
any of its affiliates, or their respective businesses, officers, directors or employees. 

        10.5    No Other Obligations.    Executive represents that he is not precluded or limited in his ability to undertake
or perform the duties described herein by any contract, agreement or restrictive covenant. Executive covenants that he shall not employ the trade secrets or proprietary information of any other person
in connection with his employment by the Company without such person's authorization. 

        10.6    Forfeiture of Outstanding Options.    The provisions of Section 7 notwithstanding, if Executive
willfully and materially fails to comply with any restrictive covenant under Section 10.1(a) (other than the first sentence thereof), 10.1(b), 10.2 (other than the first and penultimate
sentences thereof), 10.3, 10.4, or 10.8, all options to purchase Common Stock granted by the Company and then held by Executive or a transferee of Executive shall be immediately forfeited and
thereupon such options shall be cancelled. Notwithstanding the foregoing, Executive shall not forfeit any option (i) unless there shall have been delivered to him, within ninety
(90) days after the Board (A) had knowledge of conduct or an event allegedly constituting grounds for such forfeiture and (B) had reason to believe that such conduct or event
could be grounds for such forfeiture, a copy of a resolution duly adopted by the Board by a vote of Directors constituting a majority of the Board (excluding Executive) at a meeting of the Board in
which a quorum is present and which is called and held for such purpose (after giving Executive reasonable notice specifying the nature of the grounds for such forfeiture and not less than
30 days to correct such grounds and affording Executive and his counsel the opportunity to be heard before the Board) finding that, in the good faith opinion of the Board, Executive has engaged
and continues to engage in conduct set forth in this Section 10.6 which constitutes grounds for forfeiture of Executive's options; and (ii) if, within 30 days following his
receipt of such resolution, Executive commences an arbitration proceeding in accordance with Section 18.2 disputing such grounds, in which case such forfeiture shall be tolled pending the
resolution of Executive's claim and shall not occur if the arbitration panel finds that the Company is not entitled to cause the forfeiture. 

        If
the arbitration panel finds that the Company is entitled to cause the forfeiture of Executive's options, Executive shall be required to forfeit such options immediately. If any option
is exercised after delivery of the Board's notice of forfeiture and if such forfeiture subsequently occurs pursuant to the foregoing terms of this Section 10.6, Executive shall be required to
return to the Company all shares acquired upon such exercise; provided further that if Executive has sold any shares he acquired upon such exercise, Executive shall pay to the Company an amount equal
to the difference between the aggregate sale price of the shares sold and the aggregate exercise price paid by Executive for such shares. Any such forfeiture shall apply to such options
notwithstanding any term or provision of any option agreement. If the Board or the arbitration panel finds that the Company is not entitled to cause a forfeiture for which a notice is given to
Executive, the Company shall pay (or reimburse, if already paid by Executive) all expenses actually incurred by Executive in connection with such attempted forfeiture. 

            10.7    Enforcement.    Executive acknowledges and agrees that, by virtue of his position, services and
access to and use of confidential records and proprietary information, any violation by him of any of the undertakings contained in this Section 10 would cause the Company immediate,
substantial and irreparable injury for which it has no adequate remedy at law. Accordingly, Executive agrees and consents to the entry of an injunction or other equitable relief by a court of
competent jurisdiction restraining any violation or threatened violation of any undertaking contained in this Section 10. The Company agrees and consents to the entry of an injunction or other
equitable relief by a court of competent jurisdiction restraining the Company from making any defamatory statements, whether orally or in writing, relating to alleged violations or threatened 

14

 

violations by Executive of any undertaking contained in this Section 10. Executive and the Company each waive posting of any bond otherwise necessary to secure such injunction or other
equitable relief. Rights and remedies provided for in this Section 10 are cumulative and shall be in addition to rights and remedies otherwise available to the parties hereunder or under any
other agreement or applicable law. Subject to Section 18.3, the Company shall bear all costs and expenses arising in connection with any enforcement pursuant to this Section 10.7. 

            10.8    Cooperation with Regard to Litigation.    Except to the extent that Executive has or intends to
assert in good faith an interest or position adverse to or inconsistent with the interest or position of the Company, Executive agrees to cooperate reasonably with the Company, during the Term and
thereafter (including following Executive's termination of employment for any reason), by making himself reasonably available to testify on behalf of the Company in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and reasonably to assist the Company in any such action, suit, or proceeding, by providing information and meeting and consulting with the
Board or its representatives or counsel, or representatives or counsel to the Company, in each case, as reasonably requested by the Company. The Company agrees to pay (or reimburse, if already paid by
Executive) all expenses actually incurred in connection with Executive's cooperation and assistance including, without limitation, reasonable fees and disbursements of counsel, if any, chosen by
Executive if Executive reasonably determines in good faith, on the advice of counsel, that it is appropriate that Executive be separately represented by his own counsel in such proceeding. Without
limiting the foregoing, after the expiration of this Agreement or the termination of Executive's employment by the Company for any reason, such cooperation and assistance shall not require Executive
to forgo or significantly interrupt any professional or personal commitment that he reasonably deems significant or to take any action (including, without limitation, travel to, attendance at or
preparation for any meeting, deposition or other proceeding or event of any type) that, in his reasonable judgment, could impair his ability to perform the responsibilities of, or could jeopardize the
continuation of, his then current employment, or would otherwise impose any undue burden on Executive. 

            10.9    Survival.    The provisions of this Section 10 shall survive the termination of the Term
and any termination or expiration of this Agreement. 

            10.10    Company.    For purposes of this Section 10, references to the "Company" shall include
both the Company and each subsidiary of the Company. 

        11.    Insurance for the Company's Benefit.    The Company may at any time and for the Company's own benefit (or for
the benefit of a lender to the Company) apply for and take out life, health, accident or other insurance covering Executive, either independently or together with others, in any amount which the
Company may deem to be in its best interests. The Company shall own all rights in such insurance and proceeds thereof and Executive shall not have any right, title or interest therein. Executive shall
assist the Company at the Company's expense in obtaining and maintaining any such insurance by submitting to reasonable and customary medical examinations and preparing, signing and delivering such
applications and other documents as reasonably may be required. 

        12.    Indemnification.    During the Term of this Agreement and all periods after the expiration of this Agreement or
termination of Executive's employment for any reason, the Company shall indemnify Executive to the full extent permitted under the Company's Certificate of Incorporation or By-Laws and
pursuant to any other agreements or policies in effect from time to time; provided, however, that Executive shall at all times have at least all rights to indemnification by the Company as are
provided in the Company's Certificate of Incorporation or By-Laws or pursuant to other agreements in effect on or immediately prior to the Effective Date, and the Company shall also
advance expenses for which indemnification may be ultimately claimed as such expenses are incurred to the fullest extent permitted under applicable law, subject to any requirement that Executive
provide an undertaking to repay such 

15

 

advances if it is ultimately determined that Executive is not entitled to indemnification; provided, however, that any determination required to be made with respect to whether Executive's conduct
complies with the standards required to be met as a condition of indemnification or advancement of expenses under applicable law and the Company's Certificate of Incorporation, By-Laws, or
other agreement, shall be made by independent counsel mutually acceptable to Executive and the Company (except to the extent otherwise required by law). After the Effective Date, the Company shall not
amend its Certificate of Incorporation or By-Laws or any agreement in any manner which adversely affects the rights of Executive to indemnification thereunder. Any provision contained
herein notwithstanding, this Agreement shall not limit or reduce, and the Company hereby agrees to provide to Executive, any and all rights to indemnification to the full extent permitted under
applicable law. In addition, the Company will maintain directors' and officers' liability insurance in effect and covering acts and omissions of Executive during the Term and for a period of six years
thereafter on terms substantially no less favorable than those in effect on the Effective Date. The indemnification rights made available to Executive pursuant to this Section 12 shall at all
times be at least as favorable to Executive as the indemnification rights made available at such times to any other employee of the Company. For purposes of this Section 12, references to the
"Company" shall include both the Company and each of its subsidiaries for which Executive has acted, acts or will in the future act in any capacity. The provisions of this Section 12 shall
survive the termination of the Term and any termination or expiration of this Agreement. 

        13.    Notices.    Whenever under this Agreement it becomes necessary to give notice, such notice shall be in writing,
signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified, by Federal Express or other similar
overnight service or by certified or registered mail, return receipt requested, postage prepaid
and addressed to such party at the address set forth below or at such other address as may be designated by such party by like notice: 

To
the Company: 

Scientific
Games Corporation

750 Lexington Avenue

25th Floor

New York, New York 10022

Attention: General Counsel 

With
a copy to: 

Kramer
Levin Naftalis & Frankel LLP

919 Third Avenue

New York, NY 10022

(212) 715-9100

Attention: Peter G. Smith, Esq. 

To
Executive: 

A.
Lorne Weil

51 East 90th Street

Penthouse B

New York, New York 10128 

16

 

With
a copy to: 

Hogan &
Hartson L.L.P.

885 Third Avenue

New York, New York 10022

Attention: Andrew J. Trubin, Esq. 

        If
the parties by mutual written agreement supply each other with telecopier numbers for the purposes of providing notice by facsimile, such notice shall also be proper notice under this
Agreement and shall be deemed given on the next business day after the date on which successful and complete transmission is confirmed by the receiving facsimile machine or otherwise confirmed in
writing on behalf of the recipient. In the case of Federal Express or other similar overnight service, such notice or advice shall be effective on the next business day after it is sent, and, in the
cases of certified or registered mail, shall be effective 5 days after deposit into the mails by delivery to the U.S. Postal Service. 

        14.    Assignability; Binding Effect.    Neither this Agreement nor the rights or obligations hereunder of the parties
hereto shall be transferable or assignable by Executive, except in accordance with the laws of descent and distribution and as specified below. The Company may assign this Agreement and the Company's
rights and obligations hereunder, and shall assign this Agreement and such rights and obligations, to any Successor (as hereinafter defined) which, by operation of law or otherwise, continues to carry
on substantially the business of the Company prior to the event of succession, and the Company shall, as a condition of the succession, require such Successor to agree in writing to assume the
Company's obligations and be bound by this Agreement. For purposes of this Agreement, "Successor" shall mean any person that succeeds to, or has the practical ability to control, the Company's
business directly or indirectly, by merger or consolidation, by purchase or ownership of voting securities of the Company or all or substantially all of its assets, or otherwise. This Agreement shall
be binding upon and inure to the benefit of Executive, his heirs, executors, administrators, and beneficiaries, and shall be binding upon and inure to the benefit of the Company and its successors and
assigns. 

        15.    Complete Understanding; Amendment; Waiver.    This Agreement constitutes the complete understanding between the
parties with respect to the employment of Executive and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof
(including the Old Agreement), except as provided in Section 12, and no statement, representation, warranty or covenant has been made by either party with respect thereto except as expressly
set forth herein. This Agreement shall not be modified, amended or terminated except by a written instrument signed by each of the parties. Any waiver of any term or provision hereof, or of the
application of any such term or provision to any circumstances, shall be in writing signed by the party charged with giving such waiver. Waiver by either party of any breach hereunder by the other
party shall not operate as a waiver of any other breach, whether similar to or different from the breach waived. No delay by either party in the exercise of any rights or remedies shall operate as a
waiver thereof, and no single or partial exercise by either party of any such right or remedy shall preclude other or further exercise thereof. 

        16.    Severability.    If any provision of this Agreement or the application of any such provision to any person or
circumstances shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the application of such provision to such
person or circumstances other than those to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest
extent permitted by law. If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, the
parties hereto agree that the court making such determination shall reduce the scope, duration and/or area of 

17

 

such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or
shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced. The parties hereto recognize that if, in any judicial proceeding, a court shall
refuse to enforce any of the separate covenants contained in this Agreement, then that invalid or unenforceable covenant contained in this Agreement shall be deemed eliminated from these provisions to
the extent necessary to permit the remaining separate covenants to be enforced. In the event that any court determines that the time period or the area, or both, are unreasonable and that any of the
covenants is to that extent invalid or unenforceable, the parties hereto agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the
greatest geographical area that would not render them unenforceable. To the extent that a court of competent jurisdiction determines that Executive willfully and materially breached
Section 10.1(a) (other than the first sentence thereof), 10.1(b), 10.2 (other than the first and penultimate sentences thereof), 10.3, 10.4, or 10.8, the Company's obligations to make payments
hereunder shall immediately be limited to the amounts, if any, remaining to be paid pursuant to Section 7(b) to the extent not theretofore paid, provided that the Company's obligations to make
such greater payments shall immediately be reinstated in the event that the determination of such court is overturned or reversed by any higher court. 

        17.    Survivability.    The provisions of this Agreement which by their terms call for performance subsequent to
termination of Executive's employment hereunder, or of this Agreement, shall so survive such termination, whether or not such provisions expressly state that they shall so survive. 

        18.    Governing Law; Arbitration; Expenses; Interest.    

        18.1    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State
of New York applicable to agreements made and to be wholly performed within that State, without regard to its conflict of laws provisions. 

        18.2    Arbitration.    Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in New York, New York by three arbitrators in accordance with the rules of the American Arbitration Association in effect at the time of submission to arbitration; provided,
however, that the Company shall be entitled to commence an action in any court of competent jurisdiction to enforce Section 10, in part or in its
entirety.Judgment may be entered on the arbitrators' award in any court having jurisdiction. For purposes of entering such judgment or seeking
enforcement of Section 10, the Company and Executive hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the Southern
District of New York; (ii) any of the courts of the State of New York or the State of Delaware; or (iii) any other court having jurisdiction. The Company and Executive further agree that
any service of process or notice requirements in any such proceedings shall be satisfied if the rules of such court relating thereto have been substantially satisfied. The Company and Executive hereby
waive, to the fullest extent permitted
by applicable law, any objection which either may now or hereafter have to such jurisdiction and any defense of inconvenient forum. The Company and Executive hereby agree that a judgment upon an award
rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Subject to Section 18.3, the Company shall bear all costs and
expenses arising in connection with any arbitration proceeding pursuant to this Section 18.2. Notwithstanding any provision in this Section 18, Executive shall be entitled to seek in any
court of competent jurisdiction specific performance of Executive's right (which is hereby acknowledged and agreed to by the Company) to be paid all compensation, benefits and other amounts required
to be paid during the pendency of any dispute or controversy arising under or in connection with this Agreement, which, to the extent such amounts are paid by the Company (or, in the case of a
termination of Executive's employment by the Company without Cause, are so paid in respect of periods commencing after 90 days following the date of such termination) shall be credited against 

18

 

the total amounts otherwise finally determined to be owed to Executive pursuant to this Agreement. 

        18.3    Reimbursement of Expenses in Enforcing Rights.    All reasonable costs and expenses (including, without
limitation, reasonable fees and disbursements of counsel) incurred by Executive in seeking to interpret this Agreement or enforce rights pursuant to this Agreement shall be paid by the Company on
behalf of Executive (or, if already paid by Executive, reimbursed to Executive by the Company) as such costs and expenses are incurred. If any claim of Executive is found to be frivolous by a final,
nonappealable determination of the arbitration panel or court hearing the claim, Executive shall reimburse the Company within 30 days of such determination for all amounts paid by the Company
under this Section 18.3 in connection with the claim. 

        18.4    Interest on Unpaid Amounts.    Any amounts that have become payable pursuant to the terms of this Agreement or
any decision by arbitrators or judgment by a court of law pursuant to this Agreement but which are not timely paid shall bear interest at the prime rate in effect at the time such payment first
becomes payable, as quoted by the Company's principal bank. 

        19.    Reimbursement of Expenses of Executive in Negotiating Agreement.    All reasonable costs and expenses
(including, without limitation, reasonable fees and disbursements of counsel) incurred by Executive in connection with the negotiation, preparation, execution, or delivery of this Agreement shall be
paid on behalf of Executive (or, if already paid by Executive, reimbursed to Executive) promptly by the Company. 

        20.    Titles and Captions.    All paragraph titles or captions in this Agreement are for convenience only and in no
way define, limit, extend or describe the scope or intent of any provision hereof. 

        IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement as of the date first above written. 

	 	 	SCIENTIFIC GAMES CORPORATION
	

 	
 	
By:	

 Name:

Title:
	

 	
 	

 	

 A. Lorne Weil

19

QuickLinks

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Table of Contents

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

W I T N E S S E T H<Page>

                                                                    EXHIBIT 10.1

              AVAYA INVOLUNTARY SEPARATION PLAN FOR SENIOR OFFICERS

                                  PLAN DOCUMENT

                                       AND

                            SUMMARY PLAN DESCRIPTION

                          (EFFECTIVE OCTOBER 13, 2001)

THIS DOCUMENT, LIKE ALL AVAYA PLANS, PERSONNEL POLICIES OR PRACTICES, IS NOT A
CONTRACT OF EMPLOYMENT. IT IS NOT INTENDED TO CREATE, AND IT SHOULD NOT BE
CONSTRUED TO CREATE, ANY CONTRACTUAL RIGHTS, EITHER EXPRESS OR IMPLIED, BETWEEN
ANY PARTICIPATING COMPANY AND ITS EMPLOYEES. THE PRACTICES AND PROCEDURES
DESCRIED IN THIS DOCUMENT MAY BE CHANGED, ALTERED, MODIFIED OR DELETED AT ANY
TIME, WITH OR WITHOUT PRIOR NOTICE.

EMPLOYMENT AT AVAYA IS "AT-WILL". THIS MEANS THAT EMPLOYEES HAvE THE RIGHT TO
QUIT THEIR EMPLOYMENT AT ANY TIME AND FOR ANY REASON, AND AVAYA HAS THE RIGHT TO
TERMINATE ANY EMPLOYEE, AT ANY TIME AND FOR ANY REASON.

IN THE EVENT THERE IS A CONFLICT BETWEEN STATEMENTS IN THE SEPARATION PLAN AND
THE TERMS OF ANY BENEFIT PLAN, POLICY, OR PRACTICE WITH RESPECT TO THE BENEFITS
PROVIDED THEREIN, THE APPLICABLE BENEFIT PLAN, POLICY OR PRACTICE WILL CONTROL.
tHE BOARD OF DIRECTORS OF AVAYA INC. (OR ITS DELEGATE) RESERVES THE RIGHT, AT
ANY TIME, TO MODIFY, SUSPEND, CHANGE, OR TERMINATE AVAYA'S BENEFIT PLANS,
PoLICIES OR PRACTICES.

Page 1 of 16                                                    October 13, 2001

<Page>

              AVAYA INVOLUNTARY SEPARATION PLAN FOR SENIOR OFFICERS

                                  PLAN DOCUMENT
                                       AND
                            SUMMARY PLAN DESCRIPTION

A.   OVERVIEW

The Avaya Involuntary Separation Plan for Senior Officers (the "Plan"), amended
and restated effective as of October 13, 2001, as set forth herein, is designed
to provide a specific payment and certain benefit enhancements to eligible
Senior Officers of Avaya Inc. ("Avaya" or the "Company") and its affiliated
companies and subsidiaries (collectively "Participating Companies") whose
employment is involuntarily terminated under conditions described in the Plan.

B.   TYPE OF PLAN

Under Section 3(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), this Plan is classified and is to be interpreted as an
employee welfare benefit plan for purposes of providing specified post
employment payments and other benefits.

C.   PLAN PARTICIPATION

You are a participant in this Plan (a "Participant") if you are a regular
full-time Senior Officer, who is on the active roll of the Company (including
employees on loan to other organizations, receiving benefits under the Avaya
Short Term Disability Plan ("STD") or on a leave of absence with guaranteed
reinstatement rights), and you have been designated "At Risk" under the Avaya
Force Management Program ("FMP") Guidelines in effect at that time. For the
purposes of this Plan, "At Risk" under the FMP Guidelines means a company
initiated termination other than for "cause," which is defined as follows: (1)
conviction (including a plea of guilty or nolo contendere) of a felony or any
crime of theft, dishonesty or moral turpitude; or (2) gross omission or gross
dereliction of any statutory or common law duty of loyalty to the Company, or
(3) any other violation of Avaya's Code of Conduct. "At Risk " shall not include
any termination that is caused by, as a result of or otherwise related to a
"Change in Control" as defined in the Avaya Inc. Special Severance Plan.
Employees whose termination is caused by, as a result of or otherwise related to
a Change in Control are not eligible to participate in this Plan.

For purposes of this Plan, a Senior Officer is an Avaya Senior Officer who
reports directly to the Chief Executive Officer. The Chief Executive Officer is
not a Senior Officer for the purposes of this Plan.

For purposes of this Plan, Net Credited Service ("NCS") shall be determined in
accordance with the Avaya Pension Plan For Salaried Employees. If a Participant
is not

Page 2 of 16                                                    October 13, 2001

<Page>

eligible for the Avaya Pension Plan For Salaried Employees, NCS shall be equal
to the Participant's time on the U.S. payroll of Avaya or any member of its
controlled group of corporations (within the meaning of section 414(b) of the
Internal Revenue Code of 1986, as amended), while the corporation is part of the
control group, excluding any leave of absence or disability leave.

The Vice President - Compensation and Benefits of Avaya or his delegate shall
determine if and when this Plan, and to what organizations, positions and groups
of employees, this Plan is to be applied.

D.   ELIGIBILITY TO RECEIVE BENEFITS

If you are a Participant, you are eligible to receive the benefits described in
Section F upon the involuntary termination of your employment pursuant to the
terms of this Plan, on your Scheduled Off-Payroll Date as set forth in Section
E.

E.   SCHEDULED OFF-PAYROLL DATE

Your Scheduled Off-Payroll Date will be the date that is specified in the
written notice you receive confirming your designation as "At Risk", which date
will be thirty (30) days from the date of that notice. It is expected that,
subject to the transition requirements of your business organization, you will
use all accrued unused vacation prior to your Scheduled Off-Payroll Date. If you
are unable to do so because of business transition needs, you will be paid for
unused vacation days for the current calendar year and any carry-over days
approved prior to the beginning of the current fiscal year. You will not receive
pay in lieu of floating holidays and designated holidays if these days are not
taken prior to terminating employment, unless required by state law.

F.   PLAN PAYMENTS AND BENEFITS

The Post-Employment Payments and Benefits described in this Section F of the
Plan constitute the exclusive post-employment payments and benefits that a
Senior Officer who is terminated under the FMP guidelines is entitled to receive
and are provided in lieu of any post-employment benefits available under any
other applicable severance plan, program, policy, individually negotiated
separation agreement or other individual arrangement of or with a Participating
Company.

1.   POST-EMPLOYMENT PAYMENT

A Participant who becomes eligible to receive benefits under this Plan, shall be
entitled to receive a Post-Employment Payment under this Section F.1. in the
amount of one hundred and fifty percent (150%), of final annual base salary if
the Participant elects to sign and does not revoke a Termination Agreement and
Release in accordance with the provisions of Section G of this Plan.

Page 3 of 16                                                    October 13, 2001
<Page>

2.   ANNUAL INCENTIVE

You may be eligible to receive a pro rata portion of your short-term incentive
payment. The portion of the incentive payment to which you will be entitled will
be determined in accordance with existing practice and the terms of any
short-term incentive plan providing for such payments, subject to both company
and individual performance.

3.   STOCK OPTIONS

Vesting or cancellation of stock options, restricted stock units or other
long-term awards granted prior to your actual termination date shall be in
accordance with the terms and conditions of the Avaya Inc. Long Term Incentive
Program or other long-term incentive plan or program pursuant to which you have
been provided options and your award agreements.

4.   FINANCIAL COUNSELING

If you are not Service Pension eligible, you will continue to be eligible for
Company paid financial counseling services for three (3) months after the month
in which your employment terminates, up to your prorated benefit amount.

If you are Service Pension eligible, you will be entitled to financial
counseling services for one full year from your actual termination date up to
your annual benefit amount in accordance with current practice.

5.   OUTPLACEMENT SERVICES

You will be entitled to receive individual services of a Company paid
outplacement consultant for one year from your off roll date, in accordance with
customary practice for Senior Officers.

6.   OTHER PERQUISITES

All other Senior Officer Perquisites will end as of your last day on the active
payroll. These include, but are not limited to: monthly car allowances, use of
company chauffeurs, aircraft, executive travel, etc.

7.   METHOD OF PAYMENT

To receive your Post-Employment Payment, you must sign the Termination Agreement
and Release (Exhibit "A") and return it to the Executive Compensation and
Benefits Manager of Avaya within forty-five days of your actual termination
date. The Post Employment Payment shall be paid in a lump sum within 45 days
after receipt of the validly executed and delivered Termination Agreement and
Release, but not sooner than the expiration of the seven (7) day revocation
period during which you may revoke

Page 4 of 16                                                    October 13, 2001

<Page>

the Termination Agreement and Release. Revocation during that period will result
in ineligibility for payment.

G.   TERMINATION AGREEMENT AND RELEASE

A Participant who is otherwise eligible to receive a Post Employment Payment
under Section F.1 shall not be entitled to receive any of such benefits until
the Participant has signed a Termination Agreement and Release (a copy of which
is attached hereto as Exhibit "A") which releases and discharges Avaya, its
benefit committees, and all of its affiliates, subsidiaries, resulting new
entities, and the respective successors and assigns, and the respective
shareholders, officers, directors, employees and members of all of the named
entities from all claims, demands or causes of action of any kind whatsoever
arising out of your employment and the termination of your employment.

H.   WITHHOLDINGS

The amount of the Post-Employment Payment paid pursuant to this Plan is subject
to the withholding of federal, state and local taxes, FICA (Social Security
taxes), and FUTA and SUTA (unemployment taxes) at the time of payment and will
be reported on IRS form W-2. Payment will not be reduced for contributions to,
or be recognized under, any Avaya employee or Senior Officer benefit plan or
program.

I.   PAYMENT UPON DEATH, DISABILITY OR LEAVE OF ABSENCE

1.   DEATH

If you should die on or before your actual termination date, no payments will be
made or benefits provided under this Plan. You will be treated as if you had
died as an active employee and your estate or your beneficiaries will be
entitled to the customary benefits payable upon the death of an active Senior
Officer. If you should die after your actual termination date, but before
payment is made, your Post-Employment Payment, if applicable, will be made to
your lawful spouse or, if you are not survived by a lawful spouse, to your
estate in a single lump sum as soon as practicable after your death, provided
you or the executor of your estate has signed and has not revoked a Termination
Agreement and Release in accordance with the provision of Section G of this
Plan.

2.   DISABILITY AND LEAVES OF ABSENCE

If you are receiving disability benefits or you are on a leave of absence with a
right to guaranteed reinstatement prior to terminating employment, any payments
under this Plan to you shall be computed and paid as follows:

         (a)  EMPLOYEES RECEIVING DISABILITY BENEFITS:

Page 5 of 16                                                    October 13, 2001

<Page>

         No payment under this Plan will be made until your employment is
         formally terminated at the time your benefits under the Short Term
         Disability Plan stop. Any payments due under this Plan shall be reduced
         by the full amount of any disability benefits paid subsequent to your
         Scheduled Off-Payroll Date.

         (b)  EMPLOYEES ON A LEAVE OF ABSENCE WITH GUARANTEED RIGHT OF
         REINSTATEMENT:

         Payments computed under this Plan will not be payable until after your
         employment is formally terminated at the conclusion of your leave of
         absence.

J.   FORFEITURE

You will forfeit all or a portion of your benefits, including the benefits
listed under section K, under the following circumstances:

1.   RE-EMPLOYMENT

If, within one year of your actual termination date, you become employed by: (i)
Avaya, or (ii) any entity within Avaya's controlled group of corporations within
the meaning of Section 1563 of the Internal Revenue Code or (iii) any other
company which participates in Avaya's U.S. pension plans or (iv) any of the
successors or assigns of any of them, you will be required to repay to Avaya
that portion of the Post-Employment Payment which relates to the part of the
year that you are re-employed. That portion will be determined as follows: the
Post-Employment Payment will be multiplied by a fraction, the numerator of which
is the number of complete months (of the 12 month period following your actual
termination date) during which you were re-employed and the denominator of which
is 12. The result will be the amount that you must repay to the Company.

2.   DISPOSITIONS AND OUTSOURCING

If, in connection with, as a result of or in anticipation of a disposition or a
sale of any portion of the stock or assets of Avaya or an outsourcing of any of
Avaya's products, services, processes or other business concerns a Participant
is offered an opportunity, (i) to perform services as an employee with the
purchaser or service provider or (ii) to provide consulting services or to
otherwise render services to a purchaser or service provider as an employee,
independent contractor, consultant or in any other capacity, full- or part-
time, at any time within the ninety (90) day period immediately following the
participant's termination of employment with the Company, then such participant
must repay the entire Post Employment Payment described in Section F to the
Company from which his or her employment was terminated and will cease receiving
benefits described in section K effective as of the date of such hiring.

3.   VIOLATION OF AVAYA CODE OF CONDUCT OR PROPRIETARY INFORMATION

Page 6 of 16                                                    October 13, 2001

<Page>

Notwithstanding any other provision of this Plan, if, as determined by the Vice
President - Compensation and Benefits of Avaya, you violate Avaya's Code of
Conduct and/or fail to continue to fulfill your obligations not to disclose the
Company's private, confidential or proprietary information, you shall not be
entitled to receive a payment or if payment has been made you will be required
to repay the Post Employment Payment in its entirety to the Company.

K.   MEDICAL, LIFE INSURANCE, AND OTHER BENEFITS

The provisions regarding medical, dental, and life insurance coverages are
outlined below. For a description of the provisions of such coverages, including
administration of or rights of Participants under any of Avaya's health (include
COBRA rights) or life insurance plans, please consult the applicable plan
documents, which control, and the respective Summary Plan Descriptions for
active and retired employees. In the event there is a conflict between the
material in this Plan and the terms of the respective benefit plan documents,
the benefit plan documents will control and govern the operation of such plans.
Avaya reserves the right to modify, suspend, change or terminate the benefit
plans described in this Section K at any time and without prior notice to
Participants.

1.   SERVICE PENSION ELIGIBLE EMPLOYEES

If you are eligible to retire with a service pension under the service based
program of the Avaya Inc. Pension Plan for Salaried Employees or the Avaya Inc.
Pension Plan, health and life insurance coverage will be available under the
provisions that normally apply to retiring service pensioners.

2.   NON-SERVICE PENSION ELIGIBLE EMPLOYEES

Certain other benefits are continued for non-service pension eligible
Participants as described below:

     (a)  MEDICAL EXPENSE PLAN

     If you have five or more years of Net Credited Service ( NCS) the Company
     will pay for your coverage to continue on the same basis as for active
     employees under the Medical Expense Plan for six (6) months after the month
     in which your employment terminates. After that, you can continue coverage
     under COBRA for up to an additional twelve (12) months by paying the COBRA
     rate of 102%.

     If you have at least one year but less than five years of NCS, the Company
     will pay for your coverage to continue on the same basis as for active
     employees under the Medical Expense Plan for three (3) months after the
     month in which your employment terminates. After that, you can continue
     coverage under COBRA for up to an additional fifteen (15) months by paying
     the COBRA rate of 102%.

Page 7 of 16                                                    October 13, 2001

<Page>

     If you have less than one year of NCS, you can continue Medical Expense
     Plan coverage under COBRA for up to 18 months after the month in which your
     employment terminates by paying the COBRA rate of 102%.

     If you are enrolled in an HMO at termination, your HMO coverage will be
     continued for the same period as described above. All coverage continued
     for you and your eligible dependents will be the same as the coverage
     provided while you were an active employee, subject to the terms of the
     Medical Expense Plan and provided that you continue to pay your share of
     the cost of the HMO premium.

     You should immediately notify the COBRA administrator if you become covered
     under another group health plan.

     (b)  DENTAL EXPENSE PLAN

     You may continue plan coverage under the Dental Expense Plan under COBRA
     for up to 18 months after the month in which your employment terminates by
     paying the COBRA rate of 102% of the applicable premium for coverage.

NOTE: THE COMPANY PROVIDES PARTICIPANTS WITH UP TO 18 MONTHS OF CONTINUING
HEALTH CARE COVERAGE (MEDICAL EXPENSE PLAN, DENTAL EXPENSE PLAN, AND HEALTH CARE
REIMBURSEMENT ACCOUNT PLAN) UNDER COBRA WHEN THEY LEAVE THE ACTIVE PAYROLL, AT
THE PARTICIPANT'S EXPENSE. THE 18 MONTHS OF CONTINUING COBRA COVERAGE WILL RUN
CONCURRENTLY WITH THE PERIODS DESCRIBED ABOVE. THE PARTICIPANT WILL RECEIVE A
COBRA PACKAGE AFTER HE OR SHE LEAVES THE ACTIVE PAYROLL, INCLUDING APPROPRIATE
CURRENT HEALTH CARE COVERAGE OPTIONS AND BILLING INFORMATION.

     (c)  LIFE INSURANCE

     If you are not Service Pension eligible, your coverage under the Avaya Inc.
     Executive Life Insurance Program will continue, at your expense, for as
     long as you continue to pay the premiums after the month in which your
     employment actually terminates.

     If you are Service Pension eligible and participate in the service based
     program of the Avaya Inc Pension Plan for Salaried employees your coverage
     under the Avaya Inc. Executive Life Insurance Program will continue based
     on the following schedule. At retirement, your pre-retirement executive
     life insurance will be reduced by 10%. Over each of the next four years,
     another 10% reduction will be made at the anniversary of your retirement
     date until a 50% level is achieved. This coverage will be paid by the
     company. You will be subject to imputed income based on the amount of life
     coverage provided.

     (d) SUPPLEMENTARY LIFE INSURANCE. Regardless of retirement eligibility,
     your coverage of one to five times total annual pay can be continued by
     paying your premiums directly to the insurance carrier. Please contact
     MetLife at 888-466-8659.

     (e)  DEPENDENT GROUP LIFE INSURANCE

Page 8 of 16                                                    October 13, 2001

<Page>

     You may continue plan coverage under the Avaya Inc. Dependent Group Life
     Insurance Plan for up to three (3) months after the month in which your
     employment terminates by paying the group premium directly to the insurance
     carrier. At the end of the three (3) month period, you can request
     conversion to an individual policy by contacting MetLife, the insurance
     carrier, at 888-466-8659.

     (f)  ACCIDENTAL LOSS INSURANCE DEATH AND DISMEMBERMENT.

     Your coverage for up to one times total annual pay (as defined in the Avaya
     Inc. Group Life Insurance Program) will continue, at Company expense, for
     six (6) months after the month in which your employment terminates.

     (g)  SUPPLEMENTARY ACCIDENTAL LOSS INSURANCE.

     You may continue your coverage of one to five times total annual pay (as
     defined in the Avaya Inc. Group Life Insurance Program) for up to six (6)
     months after the month in which your employment terminates by paying the
     group premium directly to the insurance carrier. Please contact MetLife at
     888-466-8659. Accidental Loss Insurance cannot be converted to an
     individual policy.

     (h)  DEPENDENT ACCIDENTAL LOSS INSURANCE

     You may continue coverage under the Avaya Inc. Dependent Accidental Loss
     Insurance Plan for up to three (3) months after the month in which your
     employment terminates by paying the group premium directly to the insurance
     carrier. Dependent Accidental Loss Insurance cannot be converted to an
     individual policy.

     (i)  LONG-TERM CARE

     You may elect to continue coverage through the carrier by paying the group
     premium directly to the carrier.

     (j)  REIMBURSEMENT ACCOUNTS

     You may continue to submit claims incurred through your last day on the
     payroll up to the amount elected for that plan year in the Avaya Inc.
     Health Care Reimbursement Account Plan (HCRA). You may also continue to
     submit claims incurred through the end of the plan year up to the amount
     contributed through your last day on the payroll in the Avaya Child/Elder
     Care Reimbursement Account Plan (CECRA). Claims under both programs may be
     submitted through April 15 of the following year after your termination.
     You may choose to continue to participate in the Avaya Health Care
     Reimbursement Account Plan, through COBRA, on an after-tax basis by making
     monthly deposits to the account.

     (k) VOLUNTARY BENEFITS PROGRAM

     Coverage under the Voluntary Benefit Program, which includes vision
     coverage, legal plans, financial planning and property and casualty
     insurance, may be continued

Page 9 of 16                                                    October 13, 2001

<Page>

     through RealLife benefits. Vision coverage continuation will be offered to
     you through COBRA. Please contact RealLife Benefits for details and
     portability rules.

     (l)  DISABILITY PROGRAMS

     Coverage under the employee's short term disability programs ends on the
     last day of employment. Employees who are receiving short term disability
     benefits must waive any rights they may otherwise have to continued short
     or long term disability benefits in order to receive the benefits described
     in Section F.

3.   END OF COVERAGE

Other than as extended above, all coverage ceases at the end of the month in
which your employment terminates. Notwithstanding the above, all coverage set
forth above automatically ends when you become eligible for group coverage under
another plan of any other employer or other organization or if you fail to pay a
required premium or if the conditions set forth in Section J are met.

4.   OTHER BENEFIT PLAN AGREEMENTS.

If you were an employee of any entity at the time the stock or assets of such
entity were acquired by the Company, and you became an employee of the Company
through such acquisition, any agreements entered into by the Company, which
apply to Participants, will control, where relevant, with respect to the
benefits available to you under the Plan.

L.   BENEFIT CLAIM AND APPEAL PROCEDURES

1.   CLAIM PROCEDURE

Any Participant in the Plan, or a person duly authorized by a Participant, may
file a claim in writing for benefits under this Plan if the Participant believes
he or she has not received benefits to which he or she was entitled under the
Plan. Such a claim may only relate to a matter under the Plan and not any matter
under the FMP Guidelines or any other Participating Company policy, practice or
guideline.

The written claim should be sent to the Vice President - Compensation and
Benefits of Avaya, Room 3W316, 211 Mt. Airy Road, Basking Ridge, NJ 07920. The
written claim should be sent within 60 days of the date of the occurrence of
facts giving rise to the claim.

If the claim is denied, in whole or in part, the claimant will receive written
notice from the Vice President, Compensation and Benefits or his delegate. The
information will be

Page 10 of 16                                                   October 13, 2001

<Page>

provided within 90 days of the date the claim was received.

The written notice will include:
-    the specific reason or reasons for the denial;
-    specific reference to pertinent Plan provisions on which the denial was
     based;
-    a description of any additional material or information necessary to
     perfect the claim and an explanation of why such material or information is
     necessary; and
-    appropriate information as to the steps to be taken if the Participant,
     spouse, heirs or estate or representative desires to submit the claim for
     review.

In some cases, more than 90 days may be needed to make a decision. In such
cases, the claimant will be notified in writing, within the initial 90-day
period, of the reason more time is needed. An additional 90 days may be taken to
make the decision if the claimant is sent such a notice. The extension notice
will show the date by which the decision will be sent. If no response is
received within the 90-day period, the claim is considered denied.

     2.  APPEAL PROCEDURE

A claimant may use this procedure to appeal a denied claim if:

-    no reply at all is received by the claimant within 90 days after filing the
     claim;
-    a notice has extended the time an additional 90 days and no reply is
     received within 180 days after filing the claim; or
-    written denial of the claim for benefits or other matters is received
     within the proper time limit and the claimant wishes to appeal the written
     denial.

If a claim for benefits is denied, in whole or in part, either expressly or by
virtue of the Participant not having received a reply, the Participant, or other
duly authorized person may appeal the denial in writing within 60 days after the
denial is or should have been received. Written request for review of any denied
claim or any other disputed matter should be sent directly to Avaya Inc. Attn:
Employee Benefits Committee, Room 3C315, 211 Mount Airy Road, Basking Ridge, NJ
07920.

The Avaya Inc. Employee Benefits Committee (the "EBC") serves as the final
review committee under the Plan for all Participants. The EBC has sole and
complete discretionary authority to determine conclusively for all parties and
in accordance with the terms of the documents or instruments governing the Plan,
and all questions arising from the administration of the Plan and interpretation
of all plan provisions, determination of all questions relating to participation
of eligible employees and eligibility for benefits, determination of all
relevant facts, the amount and type of benefits payable to any Participant,
spouse, heirs or estate, and the construction of all terms of the Plan. All
determinations and decisions of the EBC are conclusive and binding on all
parties and not subject to further review.

Unless the EBC sends notice in writing that the claim is a special case needing
more time, the EBC will conduct a review and decide on the appeal of the denied
claim within 60 days after receipt of the written request for review. If more
time is required to make

Page 11 of 16                                                   October 13, 2001

<Page>

a decision, the EBC may have 60 days, a total of 120 days, to make its decision.

If the claimant sends a written request of a denied claim, the claimant has the
right to:
(i)       Review pertinent Plan documents which may be obtained by following the
          procedures described in this Plan document, and
(i)       Send to the EBC a written statement of the issues and any other
          documents in support of the claim for benefits or other matters under
          review.

The EBC decision shall include specific reasons for the decision as well as
specific references to the pertinent Plan provisions on which the decision is
based. If the EBC does not give its decision on review within the appropriate
time span, the claimant may consider the claim denied.

PLEASE NOTE THAT THE PLAN REQUIRES THAT A PARTICIPANT PURSUE ALL THE CLAIM AND
APPEAL RIGHTS DESCRIBED ABOVE BEFORE SEEKING ANY OTHER LEGAL RECOURSE REGARDING
CLAIMS FOR BENEFITS.

M.   ERISA RIGHTS STATEMENT

All employees eligible for benefits under this Plan are Plan Participants.
Participants in this Plan are entitled to certain rights and protection under
ERISA. ERISA provides that all Plan Participants shall be entitled to:

       Examine, without charge, at the office of the Plan Administrator, at 211
   Mt. Airy Road, Basking Ridge, NJ 07920, the Plan documents and copies of all
   documents filed by this Plan with the U.S. Department of Labor, such as
   detailed annual reports. A reasonable fee or charge may be imposed for such
   copies.

In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people who are responsible for the operation of employee benefits plans. The
people who operate this Plan, called "fiduciaries" of this Plan, have a duty to
do so prudently and in the interest of all Plan Participants. No one, including
a Participant's employer or any other person may fire or otherwise discriminate
against a Participant in any way for the purpose of preventing a Participant
from obtaining a benefit or exercising rights under ERISA. If any claim for a
Plan benefit is denied, in whole or in part, the person whose claim was denied
must receive a written explanation of the reason for the denial. Such a person
has the right to have the Vice President, Compensation and Benefits or his
delegate and/or the EBC review and reconsider that claim (see Section Q,
entitled "Benefit Claim and Appeal Procedures").

Under ERISA, there are steps to take to enforce the above rights. For instance,
if materials from this Plan are requested but not received within 30 days, the
person making the request may file suit in a federal court. In such cases, the
court may require the Participating Company to provide the materials and pay
that person up to $110 a day until the materials are received, unless they were
not sent because of reasons beyond the control of the Company. Anyone whose
claim for benefits is denied after final review or ignored, in whole or in part,
may file suit in a state or federal court. Anyone who is discriminated against
for asserting rights under this Plan may seek

Page 12 of 16                                                   October 13, 2001

<Page>

assistance from the U.S. Department of Labor or may file suit in a federal
court, but an action relating to a claim for benefits may not be filed prior to
exhausting the claim and appeal procedure under this Plan. The court will decide
who will pay court costs and legal fees. If that person is successful, the court
may order the party that was sued to pay these costs and fees. If that person
loses, the court may order him or her to pay these costs and fees if, for
example, it finds that the claim was frivolous.

Anyone who has questions about this Plan should contact the Plan Administrator,
Executive Compensation and Benefits Manager at, 211 Mt. Airy Road, Basking
Ridge, NJ 07920. Anyone who has questions about this statement of Participants'
rights, or about rights under ERISA, should contact the nearest office of the
U.S. Labor - Management Services Administration, Department of Labor.

N.   PLAN ADMINISTRATOR

Avaya Inc., 211 Mount Airy Road, Room 1E100, Basking Ridge, NJ 07920, is the
Plan Administrator of the Plan. Avaya and each of its subsidiary companies that
are covered by the Plan have delegated administrative authority and
responsibility to the Avaya Inc. Employee Benefits Committee ("EBC"). The EBC is
located at Avaya Inc. Room 3W431, 211 Mt. Airy Rd, Basking Ridge, NJ 07920. The
Vice President, Compensation and Benefits of Avaya or his delegate is the named
fiduciary of this Plan who makes determinations concerning when and to what
positions or groups payments should be made in Avaya. The EBC is also a named
fiduciary and is the final review committee under the Plan.

O.   EMPLOYER AND PLAN IDENTIFICATION NUMBERS

This Plan is identified by the following number under Internal Revenue Service
rules:

                  Employer ID # 22-3713430 assigned by the IRS.

                          Plan # 531 assigned by Avaya.

P.   AMENDMENT AND TERMINATION.

Pursuant to Section 402(b)(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Board of Directors of Avaya Inc. ("Board"), or
its authorized representative pursuant to delegated authority ("Delegate"), may
from time to time amend, modify or change this Plan at any time, and the Board
or its Delegate may

Page 13 of 16                                                   October 13, 2001

<Page>

terminate this Plan at any time. Plan amendments may include, but are not
limited to, elimination or reduction in the level or type of benefits provided
to any class or classes of employees (and their spouses and dependents).

Q.   PLAN DOCUMENTS

This document is both the Summary Plan Description and the official Plan
document which regulates the operation of this Plan.

R.   LEGAL PROCESS.

Process can be served on the Plan or Avaya Inc., as Plan Administrator, by
directing such legal service to Avaya Inc., 211 Mt. Airy Road, Room 3W631,
Basking Ridge, NJ 07920, Attention: Vice President - Compensation and Benefits

S.   ASSIGNMENT OR ALIENATION

No payment or benefits under this Plan or any right or interest in such payments
or benefits shall be assignable or subject in any manner to anticipation,
alienation, sale, transfer, assignment, claims of creditors, garnishment,
pledge, execution, attachment or encumbrance of any kind, including, but not
limited to, pursuant to any domestic relations order (within the meaning of
Section 206(d)(3) of ERISA and Section 414(p)(1)(B) of the Internal Revenue
Code) and any such attempted disposition shall be null and void. The payment and
benefits hereunder or the right to receive future payment or benefits under the
Plan may not be anticipated, alienated, sold, transferred, assigned, pledged,
executed upon, encumbered, or subjected to any charge or legal process; no
interest or right to receive a payment or benefit may be taken either
voluntarily or involuntarily, for the satisfaction of the debts of, or other
obligation or claims against such person or entity, including judgment or claims
for alimony, support, separate maintenance and claims in bankruptcy proceedings.

T.   TERMS AND CONDITIONS OF EMPLOYMENT.

This document is not a contract of employment. It is not intended to create, and
it should not be construed to create, any contractual rights, either express or
implied, between you and the Company. The employment relationship between the
Company and the employees covered by the Plan is "at-will". This means that
employees have the right to quit their employment at any time and for any
reason, and the Company reserves the right to terminate any employee's
employment, with or without cause, at any time for any reason.

Page 14 of 16                                                   October 13, 2001

<Page>

T.   FUNDING.

Payments made under the Plan will be paid out of the general assets of the
Company.

U.   CONTROLLING LAW.

The Plan shall be construed, administered and governed according to the laws of
the State of New Jersey, except to the extent preempted by federal law, which
shall in that case control.

Page 15 of 16                                                   October 13, 2001

<Page>

"Exhibit A"

[GRAPHIC]

                                ----------------
                         TERMINATION AGREEMENT & RELEASE

In consideration of the fact that I have voluntarily and of my own free will
elected to accept a Post Employment Payment and that Avaya Inc. ("Avaya Inc." or
"the Participating Company") has agreed to pay me the Post Employment Payment,
subject to the terms and limitations of the Avaya Inc. Involuntary Separation
Plan for Senior Officers, I acknowledge and agree to the following:

1.   I have been told by the Participating Company, and I understand, that I may
     elect, at my option, to receive a Post Employment Payment, but that my
     election to receive the Post Employment Payment is expressly conditioned
     upon my signing a Termination Agreement and Release on or after the date of
     my termination from the Participating Company, and returning it to my Force
     Management Coordinator.

1.   I realize that there are various state and federal laws that govern my
     employment relationship with the Participating Company and/or prohibit
     employment discrimination on the basis of age, color, race, gender, sexual
     preference/orientation, marital status, national origin, mental or physical
     disability, religious affiliation or veteran status and that these laws are
     enforced through the courts and agencies such as the Equal Employment
     opportunity Commission, Department of Labor and State Human Rights
     Agencies. Such laws include, but are not limited to, Title VII of the Civil
     Rights Act of 1964, the Age Discrimination in Employment Act, as amended,
     42 U.S.C. Section 1981, and state and local laws prohibiting discrimination
     on the basis of age, etc. In consideration of the Post Employment Payment
     provided for in this Termination Agreement and Release, I intend to give up
     any rights I may have under these or any other laws with respect to my
     employment and termination of employment at the Participating Company and
     acknowledge that the Participating Company (including its subsidiaries and
     affiliates) has not (a) discriminated against me, (b) breached any express
     or implied contract with me, or (c) otherwise acted unlawfully toward me.

1.   On behalf of myself, my heirs, executors, administrators, successors and
     assigns, I release and discharge Avaya Inc. (including any "resulting new
     entity" as defined in the Separation Plan), the various Avaya Inc. Benefit
     Committees, and their successors, assigns, subsidiaries, affiliates,
     shareholders, directors, officers, representatives, agents and employees
     (collectively "Releasees") from any and all claims (including claims for
     attorneys' fees and costs), charges, actions and causes of action with
     respect to, or arising out of, my employment or termination of employment
     with the Participating Company. This includes, but is not limited to,
     claims arising under federal, state, or local laws prohibiting age, color,
     race, gender, sexual preference/orientation, marital status, national
     origin, mental or physical disability, religious affiliation or veteran
     status or any other forms of discrimination or claims growing out of the
     Participating Company's termination of its employees. It also includes
     claims based on theories of contract or tort, whether based on common law
     or otherwise.

     This agreement does not limit my right to file charges with government
     agencies, but with respect to any charges that have been or may be filed
     concerning events or actions relating to my employment or the termination
     of my employment and which occurred on or before the date of this
     Termination Agreement and Release, I additionally waive and release any
     right I may have to recover in any lawsuit or proceeding brought by me, an
     administrative agency, or any other person on my behalf or which includes
     me in any class.

     (For employees working in California) Section 1542 of the Civil Code of the
     State of California states:

     "A general release does not extend to claims which the creditor does not
     know or suspect to exist in his favor at the time of executing the Release,
     which if known by him must have materially affected his settlement with the
     debtor."

     Notwithstanding the provisions of Section 1542, and for the purpose of
     implementing a full and complete release and discharge of all Releases, I
     expressly acknowledge that this Termination Agreement and Release is
     intended to include not only claims that are known, anticipated or
     disclosed, but also claims that are unknown, unanticipated and undisclosed.

1.   Subject to Paragraph 5 herein, I covenant and agree not to bring any
     action, suit or administrative proceeding contesting the validity of this
     Termination Agreement and Release or attempting to negate, modify or reform
     it, nor to sue any Releasee for any reason arising out of my employment or
     termination thereof.

1.   I understand that this Termination Agreement and Release in no way affects
     any rights I may have for benefits under the Avaya Inc. Pension Plan for
     Salaried Employees (APPSE) or the Avaya Inc. Pension Plan (APP).

2.   I have no knowledge of any wrongdoing involving improper or false claims
     against a federal or state governmental agency, or other wrongdoing that
     involves me or other present or former Participating Company employees.

Page 16 of 16                                                   October 13, 2001

<Page>

1.   The construction, interpretation and performance of this Termination
     Agreement and Release shall be governed by the laws of the state in which I
     am working on the date of my termination from the Participating Company's
     payroll, except that state's conflict of laws rules.

1.   In the event that any one or more of the provisions contained in this
     Termination Agreement and Release shall for any reason be held to be
     unenforceable in any respect under the law of any state or of the United
     States of America, such unenforceability shall not affect any other
     provisions of this Release, but, with respect only to that jurisdiction
     holding the provision to be unenforceable, this Release shall then be
     construed as if such unenforceable provision or provisions had never been
     contained herein.

1.   I understand that, pursuant to the Older Workers Benefit Protection Act of
     1990, I have the right and have been advised to consult with an attorney
     before signing the Termination Agreement and Release, I have 45 days to
     consider the Release before signing it, and I may revoke the Release within
     seven (7) calendar days after signing it. For revocation to be effective,
     written notice must be received by the Participating Company no later than
     the close of business on the seventh day after I sign this Termination
     Agreement and Release. I understand that this revocation can be made by
     delivering the written notice of revocation to the Executive Compensation
     and Benefits Manager (below).

1.   This Termination Agreement and Release contains the entire agreement
     between the Participating Company and me and fully supersedes any and all
     prior agreement or understandings pertaining to the subject matter hereof.
     I represent and acknowledge that in executing this Termination Agreement
     and Release, I have not relied upon any representation or statement not set
     forth herein made by any of the Releases or by any of the Release's agents,
     representatives or attorneys with regard to the subject matter of this
     Agreement.

1.   All defined terms used in this Termination Agreement and Release shall have
     the same meaning as the Separation Plan.

BY SIGNING THIS TERMINATION AGREEMENT AND RELEASE, I STATE THAT; I HAVE READ IT;
I UNDERSTAND IT AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS; I AGREE WITH
EVERYTHING IN IT; I WAS ADVISED TO, AND I AM AWARE OF MY RIGHT TO CONSULT AN
ATTORNEY BEFORE SIGNING IT; AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.

------------------------------------------------------
Employee Signature

Return this Release to:
Avaya Inc.
Executive Comp and Benefits
Attn: Jill Bergently
Room 1E100
211 Mt.Airy Road
Basking Ridge, NJ 07920

------------------------------------------------------
Employee Name Printed

------------------------------------------------------
Home Phone Number

Page 17 of 16                                                   October 13, 2001

<Page>

------------------------------------------------------
Social Security Number

------------------------------------------------------
Personnel Number

------------------------------------------------------
Date (this date must be the termination date or later)

         IN ORDER TO BE VALID, THIS RELEASE MUST BE SIGNED AND RETURNED
     ON OR AFTER THE TERMINATION DATE, BUT NOT LATER THEN 45 DAYS AFTER THE
                                TERMINATION DATE

Page 18 of 16                                                   October 13, 2001

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