Document:

Exhibit 10.1
 

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

PERFORMANCE VESTING RESTRICTED
STOCK UNIT AWARD AGREEMENT

 

	
  Name 

  	
  Grant Date 

  
	
   

  	
   

  
	
  «FirstName» «LastName»

  	
  «GrantDate»

  
	
   

  	
   

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

  	
   

  

 

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

 

1.               Vesting of Award.  The Restricted Stock Units shall vest and
become nonforfeitable upon the date the Committee determines that the following
condition has been satisfied:  that Avaya’s
diluted earnings per share (determined in accordance with U.S. Generally
Accepted Accounting Principles (“GAAP”) and as adjusted by the Items (defined
below)) (“EPS”) for the fiscal year ended September 30, 2007, shall be at least
$XXX; provided, however, that the percentage of Restricted Stock Units that may
vest and become nonforfeitable shall be determined based on the schedule
attached hereto as Appendix A; provided, further, however, that if the
aggregate EPS total calculated by combining Avaya’s EPS for each of the fiscal
years ended September 30, 2005, 2006 and 2007 is less than $XXX, then all
Restricted Stock Units shall be forfeited and cancelled (the date on which any
Restricted Stock Unit vests being the “Vesting Date” for such Restricted Stock
Unit).  Consistent with the terms of the
Plan, the Committee may, in its discretion, reduce the amount of any Award
subject to Article 22 of the Plan based on such criteria as it shall determine,
including but not limited to individual merit.

 

“Items” shall
include:

 

(i)                                     any
of the following items that has an impact on net income for a fiscal year of
more than $XX million:

a.               extraordinary items
(net of applicable taxes),

b.              cumulative effects
of changes in accounting principles, and

c.               nonrecurring items
(net of applicable taxes) including, but not limited to, gains or losses on
asset dispositions and sales of divisions, business units or subsidiaries,
restructuring charges, gains and losses from qualified benefit plan
curtailments and settlements, and income or expenses related to deferred tax
assets, and

 

(ii)                                  any
of the following items that has an impact on EPS for a fiscal year of more than
$XX per share:

a.               gains and losses
(net of applicable taxes) from the sales of securities, and

b.              the issuance or
exercise of any dilutive securities such as convertible debt, preferred stock,
warrants, restricted stock units or stock options.

 

 

The period
beginning October 1, 2004 and ending on the day prior to the Vesting Date for a
Restricted Stock Unit is herein referred to as the “Restriction Period” with
respect to such Restricted Stock Unit.

 

2.         Termination
of Employment.  Upon
termination of your employment for any reason other than death or disability as
described below, including without limitation, retirement and termination as a
result of your employer ceasing to be either Avaya or a Subsidiary, any
Restricted Stock Units that are not vested shall be forfeited and cancelled.
Transfer to and from Avaya and any Subsidiary shall not be considered a
termination of employment for purposes of this Agreement.  Nor shall it be considered a termination of
employment for purposes of this Agreement if you are placed on an approved
leave of absence, unless the Committee shall otherwise determine.

 

  (a)                                  Death
- If you die prior to the Vesting Date, then the Restriction Period will end
and the award will be paid only if the condition set forth in Section 1 is met
after your date of death, in which case the award will be paid as soon as
practicable after the Vesting Date according to the following formula and all
other Restricted Stock Units not so paid will be forfeited and cancelled:  the number of Restricted Stock Units that
will vest shall be determined by multiplying the total number of Restricted
Stock Units subject to this award by a fraction, the numerator of which shall
be equal to the number of complete months which you survived following October
1, 2004, and the denominator of which shall be equal to the number of complete
months in the Restriction Period.  In all
other instances if you die prior to the Vesting Date your award will be
forfeited and cancelled.

 

(b)                                       Disability
- “Disability” means termination of employment under circumstances where you
qualify for and receive payments under a long-term disability pay plan
maintained by Avaya or any Subsidiary or as required by or available under
applicable local law.  If your employment
is terminated prior to the Vesting Date, then the Restriction Period will end
and the award will be paid only if the condition set forth in Section 1 is met
after your date of termination, in which case the award will be paid as soon as
practicable after the Vesting Date according to the following formula and all
other Restricted Stock Units not so paid will be forfeited and cancelled:  the number of Restricted Stock Units that
will vest shall be determined by multiplying the total number of Restricted
Stock Units subject to this award by a fraction, the numerator of which shall
be equal to the number of complete months you were employed by Avaya or any
Subsidiary following October 1, 2004, and the denominator of which shall be
equal to the number of complete months in the Restriction Period.  In all other instances if you terminate your
employment as a result of a Disability, your award will be forfeited.

 

3.               Delivery of Shares.   As soon as practicable after termination of
the Restriction Period, and subject to Section 6, the Company will deliver a
certificate representing the Shares being distributed to you or to your legal
representative.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

 

Please indicate your
acceptance of terms 1-9, and acknowledge that you have received a copy of the
Plan, as currently in effect, by signing at the place provided and returning
the original of this Agreement.

 

 

	
  ACCEPTED AND AGREED:

  	
  Avaya Inc.

  
	
  SIGNATURE

  	
  BYExhibit
10.2

 

Written Description of
the Tenovis Special Incentive Plan

 

On December 16, 2004, the
Compensation Committee (the “Committee”) of the Board of Directors of Avaya
Inc. (the “Company”) approved a special incentive plan designed to promote a
successful integration of the recent acquisition of Tenovis Germany GmbH and
its subsidiaries (collectively, “Tenovis”) and the achievement of three
metrics:  targeted revenue for Germany,
targeted revenue for the EMEA region, and contribution margin for the EMEA
region for the calendar year 2005.  EMEA
consists of the European, Middle Eastern and African operations of the
Company.  Participants in the plan
include certain employees of the Company involved in the integration and
management of Tenovis, including executive officers of the Company.

 

Based on the level of
involvement and impact, participants are eligible for an award equal to a
percentage of their base salaries. 
Participants must be on payroll on December 31, 2005 to be eligible for the payment. The
plan provides that no payments will be made to certain executive officers under
the plan unless a minimum percentage payout under the Avaya Inc. Short Term
Incentive Plan is achieved for fiscal 2005.

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