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EXHIBIT 10.6
DRAFT
AVAYA INC.
2000 LONG TERM INCENTIVE PLAN
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ARTICLE 1 - BACKGROUND AND PURPOSE
The purpose of the Avaya Inc. 2000 Long Term Incentive Plan is to enhance
shareholder value by reinforcing the Company's efforts to motivate Employees to
contribute to the Company's growth and performance, and enabling the Company to
attract and retain individuals of exceptional talent upon whom, in large
measure, the sustained progress, growth and profitability of the Company depend.
ARTICLE 2 - DEFINITIONS
For the purposes of this Plan, the following words shall have the meanings
ascribed to them below:
(a) AWARD
Any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Award, Dividend Equivalent, Other Stock Unit Award,
Substitute Award or any other right, interest, or option relating to
Shares or other securities of the Company granted pursuant to the
provisions of the Plan.
(b) AWARD AGREEMENT
The written agreement, contract, or other instrument or document
provided by the Company to evidence an Award and signed by both the
Company and the Participant.
(c) BOARD
The Board of Directors of the Company.
(d) CHANGE IN CONTROL
The happening of any of the following events:
(i) An acquisition by any individual, entity or group (within
the meaning of Section 13 (d)(3) or 14 (d)(2) of the Exchange Act) (an
"Entity") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (1) any acquisition
directly from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security so being
converted was itself acquired directly from the Company, (2) any
acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (4) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A),
(B) and (C) of subsection (iii) of this Article 2(c); or
(ii) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such
Board shall be hereinafter referred to as
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that for purposes of this
definition, that any individual who becomes a member of the Board
subsequent to the Effective Date, whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at
least a majority of those individuals who are members of the Board and
who were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be considered as though such individual
were a member of the Incumbent Board; and provided, further however,
that any such individual whose initial assumption of office occurs as a
result of or in connection with either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of an Entity other
than the Board shall not be so considered as a member of the Incumbent
Board; or
(iii) The approval by the stockholders of the Company of a
merger, reorganization or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (each, a
"Corporate Transaction") or, if consummation of such Corporate
Transaction is subject, at the time of such approval by stockholders,
to the consent of any government or governmental agency, the obtaining
of such consent (either explicitly or implicitly by consummation);
excluding however, such a Corporate Transaction pursuant to which (A)
all or substantially all of the individuals and entities who are
beneficial owners, respectively, of the Outstanding Company Stock and
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or indirectly,
more than 60% of, respectively, the outstanding shares of common stock,
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation or other Person which as
a result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries (a "Parent Company")) in substantially the same
proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Entity (other
than the Company, any employee benefit plan (or related trust) of the
Company, such corporation resulting from such Corporate Transaction or,
if reference was made to equity ownership of any Parent Company for
purposes of determining whether clause (A) above is satisfied in
connection with the applicable Corporate Transaction, such Parent
Company) will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power
of the outstanding voting securities of such corporation entitled to
vote generally in the election of the directors unless such ownership
resulted solely from ownership of securities of the Company prior to
the Corporate Transaction, and (C) individuals who were members of the
Incumbent Board will immediately after the consummation of the
Corporate Transaction constitute at least a majority of the members of
the board of directors of the corporation resulting from such Corporate
Transaction (or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above is
satisfied in connection with the applicable Corporate Transaction, of
the Parent Company); or
(iv) The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
(e) CODE
The Internal Revenue Code of 1986, as amended.
(f) COMMITTEE
The Corporate Governance and Compensation Committee (or any successor
committee) of the Board.
(g) COMPANY
Avaya Inc., a Delaware corporation.
(h) COMPANY ACTION
A Company or Subsidiary declared or initiated (i) termination from
service under a force management program, (ii) sale of a unit or
portion of a unit, (iii) transfer of a Participant to a corporation,
partnership, limited liability company or other business entity in
which the Company has an equity interest and which does not constitute
a Subsidiary or (iv) placement of the job function of a Participant
with an outsourcing contractor [unless the Committee determines that
any successor employer has made appropriate provision for the
assumption and continuation of Awards of Employees who are employed by
the successor employer after an event described in (ii), (iii) or
(iv).].
(i) COVERED EMPLOYEE
A "covered employee" within the meaning of Section 162(m)(3) of the
Code.
(j) DIVIDEND EQUIVALENT
Has the meaning assigned in Article 6(b).
(k) DELEGATE
The person or committee authorized by the Committee or the Board to
exercise specified authority under this Plan.
(l) DISABILITY OR DISABLED
Termination of employment under circumstances where the Participant
qualifies for benefits under a long-term disability pay plan as
provided in the Participant's Award Agreement.
(m) EMPLOYEE
Any employee of the Company or any Subsidiary, excluding leased
employees within the meaning of Section 414(n) of the Code.
(n) EXCHANGE ACT
The Securities Exchange Act of 1934, as amended.
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
(o) EXPIRATION DATE
The date specified in the Award Agreement after which rights under the
Award expire.
(p) FAIR MARKET VALUE
The average of the high and low sales prices of a Share as reported on
the New York Stock Exchange on the Grant Date, or if no sales of Shares
were reported on such date, the average of the high and low prices of a
Share on the next preceding day on which sales were reported.
(q) GRANT DATE
The Grant Date shall be the date an Award is granted as set forth in
the Award Agreement.
(r) INCENTIVE OPTION
An Option granted under Article 7 that is intended to meet the
requirements of Section 422 of the Code or any successor provision
thereto.
(s) NONSTATUTORY OPTION
An Option granted under Article 7 that is not intended to be an
Incentive Option.
(t) OPTION
An Award described in Article 7.
(u) OTHER STOCK UNIT AWARD
An Award described in Article 11.
(v) PARTICIPANT
An Employee who is selected by the Committee to receive an Award under
the Plan.
(w) PERFORMANCE AWARD
An Award described in Article 10.
(x) PERFORMANCE PERIOD
That period, established by the Committee at or after the time any
Performance Award is granted, during which any performance goals
specified by the Committee with respect to such Award are to be
measured.
(y) PERSON
Any individual, corporation, partnership, association, joint-stock
company, trust, unincorporated organization, limited liability company,
other entity or government or political subdivision.
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
(z) PARTICIPANT
An Employee of the Company or any Subsidiary to whom an Award is
granted under the Plan.
(aa) PLAN
The Avaya Inc. 2000 Long Term Incentive Plan.
(bb) RESTRICTED STOCK
An Award described in Article 9.
(cc) RETIREMENT
Termination of the employment of a Participant with the Company or any
Subsidiary under circumstances where the Participant qualifies for
benefits under a retirement plan as provided in the Participant's Award
Agreement.
(dd) SHARE
A share of the common stock of the Company, par value $.01 per share.
(ee) STOCK APPRECIATION RIGHT
An Award described in Article 8.
(ff) STOCK AWARD COMMITTEE
A committee of one or more directors appointed by the Committee
pursuant to Article 4.
(gg) SUBSIDIARY
A "subsidiary corporation" of the Company as defined in Section 424(f)
of the Code, an entity in which the Company directly or indirectly owns
50% or more of the voting interests or an entity in which the Company
has a significant equity interest, as determined by the Committee.
(hh) SUBSTITUTE AWARD
An Award granted in lieu of an Option or Stock Appreciation Right
pursuant to Article 17.
(ii) TERM
The period beginning on October 1, 2000, and ending on October 1, 2005.
ARTICLE 3 - SHARES AVAILABLE FOR OPTION; ADJUSTMENTS
(a) Subject to adjustment as provided in Article 3(b), the aggregate number of
Shares which may be made subject to Awards granted under this Plan during
each fiscal year shall not exceed [insert % limit as applicable] of the
Shares issued and outstanding on the last day of the
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
immediately preceding fiscal year; provided that such number shall, except
as may otherwise be determined by the Committee, be increased in any year
by the number of Shares available for grant under the Plan in previous
years but not covered by Awards granted under the Plan in such years;
provided, further, that if any Shares are subject to an Award that is
forfeited, settled in cash, expires, or is otherwise terminated without
issuance of Shares, such Shares shall again be available for Awards under
the Plan if no Participant shall have received any benefits of ownership in
respect thereof; provided, further, that no more than [] Shares shall be
available for the grant of Incentive Options under the Plan during the
Term; and provided, further, that no more than [insert limit ] Shares shall
be available for the grant of Awards in the form of Stock Appreciation
Rights pursuant to Article 8 (excluding for this purpose any Stock
Appreciation Right granted in relation to an Incentive Option or a
Nonstatutory Option), Restricted Stock pursuant to Article 9, Performance
Awards pursuant to Article 10, and Other Stock Unit Awards pursuant to
Article 11 that are valued by reference to Shares during the Term. In
addition, the number of Shares available for grants under the Plan [or to a
Participant] in any fiscal year shall not be reduced by Awards granted or
Shares issued by the Company through the assumption of, or in substitution
or exchange for awards or the right or obligation to make future grants of
awards in connection with the acquisition of another corporation or
business entity [or in connection with the assumption of any Award granted
by Lucent Technologies Inc. ("Lucent") to an Employee who becomes an Avaya
Individual as defined in the Employee Benefits agreement dated as of
October 1, 2000 between the Company and Lucent. Any Shares issued under the
Plan may consist, in whole or in part, of authorized and unissued Shares,
Shares purchased in the open market or otherwise, treasury Shares, or any
combination of the foregoing, as the Board or the Committee may from time
to time determine.
(b) In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, stock split, reverse stock split, spin off or similar
transaction or other change in corporate structure affecting the Shares, such
adjustments and other substitutions shall be made to the Plan, and to Awards as
the Committee in its sole discretion deems equitable or appropriate, including:
such adjustments in the aggregate number, class and kind of Shares or other
consideration which may be delivered under the Plan, in the aggregate or to any
one Participant; in the number, class, kind and option or exercise price of
Shares subject to outstanding Awards granted under the Plan; and in the number,
class and kind of Shares subject to Awards granted under the Plan (including, if
the Committee deems appropriate, the substitution of similar options to purchase
the shares of, or other awards denominated in the shares of, another company)
provided, however, that the number of Shares or other securities subject to any
Award shall always be a whole number.
(c) Except as provided in Article 20, the Committee shall be authorized to make
adjustments in Performance Award criteria or in the terms and conditions of
other Awards in recognition of unusual or nonrecurring events affecting the
Company or its financial statements, or changes in applicable laws, regulations
or accounting principles. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem desirable. In the event the Company shall assume
outstanding employee benefit awards or the right or obligation to make future
such awards in connection with the acquisition of another corporation or
business entity, the Committee may, in its discretion, make such adjustments in
the terms of Awards under the Plan as it shall deem appropriate.
ARTICLE 4 - ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall be
responsible to the Board for the operation of the Plan. The Committee may
appoint one or more Directors to serve as the Stock Award Committee to make
grants of Options, administer the Plan, discharge the
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
duties of the Committee under Articles 5, 6, 7, 8, 9, 10,11, 12 and 17 with
respect to Employees other than officers and directors of the Company, and adopt
rules and regulations under the Plan and make interpretations of the Plan with
respect to such Employees. If the Committee does not appoint a Stock Award
Committee, the Plan shall be administered by the Committee. The Committee or the
Stock Award Committee may appoint a Delegate to administer and interpret the
provisions of the Plan, promulgate rules and regulations under the Plan,
discharge the duties of the Committee under Articles 12 and 17, designate
employees to perform ministerial functions under this Plan and execute documents
on behalf of the Company; provided, however, that any Delegate appointed
pursuant to this Article 4 who is a Participant in the Plan shall not
participate in making any decision that would benefit such Delegate, except to
the extent such decision would only incidentally benefit the Delegate and would
also generally benefit a larger class of Employees.
The interpretations and construction of any provision of the Plan by the
Committee, the Stock Award Committee, or the Delegate, as the case may be, as
well as any factual determinations, shall be final, unless otherwise determined
by the Board. No member of the Board, the Committee, the Stock Award Committee
or any Delegate shall be liable for any action or determination made by him or
her in good faith.
ARTICLE 5 - ELIGIBILITY
(a) The Committee, in its sole discretion, may grant an Award to any Employee
who is actively employed by the Company or a Subsidiary. The adoption of this
Plan shall not be deemed to give any Employee any right to be granted an Award,
except and to the extent and upon such terms and conditions as may be determined
by the Committee.
(b) Neither this Plan nor any Award shall be construed as giving any person the
right to be retained in the employ of the Company or any Subsidiary. No Employee
or Participant shall have any claim to be granted any Award under the Plan, and
there is no obligation of uniformity of treatment of Employees or Participants
under the Plan. This Plan creates no ongoing obligation of the Company to
provide any future benefit of similar value. The provisions of any Award need
not be the same with respect to each recipient of an Award of the same type.
ARTICLE 6 - AWARDS -- GENERAL
(a) Awards may be granted to Participants either alone or in addition to any
other type of Award granted under the Plan. Awards may be granted for no
consideration, for such minimum consideration as is required by applicable law
or for such other consideration as the Committee may determine. Any Award
granted under the Plan shall be evidenced by an Award Agreement in such form as
the Committee may from time to time approve. The prospective recipient of any
Award shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award, until and unless
such recipient shall have executed and delivered to the Company an Award
Agreement evidencing the Award, and otherwise complied with the then applicable
terms and conditions. The term of each Award shall be for such period of months
or years from the date of its grant as may be determined by the Committee;
provided that in no event shall the term of any Incentive Option or any Stock
Appreciation Right related to any Incentive Option exceed a period of ten (10)
years from its Grant Date. The Committee may impose such conditions on the
exercise or vesting of any Award as it shall deem appropriate.
(b) Subject to the provisions of this Plan and any Award Agreement, the
recipient of an Award (including, without limitation, any deferred Award) may,
if so determined by the Committee, be
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
entitled to receive, currently or on a deferred basis, interest or dividends, or
interest or dividend equivalents (collectively, "Dividend Equivalents"), with
respect to the number of Shares covered by the Award, as determined by the
Committee, in its sole discretion, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional Shares or
otherwise reinvested.
ARTICLE 7 - OPTIONS
An Option is a right to purchase Shares subject to the following terms
and conditions and to such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall deem desirable:
(a) OPTION PRICE. The exercise price per Share under an Option shall be
determined by the Committee in its sole discretion; provided that except in the
case of an Option pursuant to a Substitute Award, such exercise price shall not
be less than the Fair Market Value of a Share on the date of the grant of the
Option.
(b) EXERCISABILITY. Options shall be exercisable at such time or times
as determined by the Committee at or subsequent to grant. Unless otherwise
determined by the Committee at or subsequent to grant, no Incentive Option shall
be exercisable during the year ending on the day before the first anniversary
date of the granting of the Incentive Option.
(c) METHOD OF EXERCISE. Subject to the other provisions of the Plan and
any applicable Award Agreement, any Option may be exercised by the Participant
in whole or in part at such time or times, and the Participant may make payment
of the option price in such form or forms, including, without limitation,
payment by delivery of cash, Shares or other consideration (including, where
permitted by law and the Committee, Awards) having a fair market value on the
exercise date equal to the total option price, or by any combination of cash,
Shares and other consideration as the Committee may specify in the applicable
Award Agreement.
(d) INCENTIVE OPTIONS. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined as of
the time of grant) of the Shares with respect to which Incentive Options held by
any Participant which are exercisable for the first time by such Participant
during any calendar year under the Plan (and under any other benefit plans of
the Company or of any parent or Subsidiary of the Company) shall not exceed
$100,000 or, if different, the maximum limitation in effect at the time of grant
under Section 422 of the Code, or any successor provision, and any regulations
promulgated thereunder. The terms of any Incentive Option shall comply in all
respects with the provisions of Section 422 of the Code, or any successor
provision, and any regulations promulgated thereunder.
(e) FORM OF SETTLEMENT. In its sole discretion, the Committee may
provide, at the time of grant, that the Shares to be issued upon an Option's
exercise shall be in the form of Restricted Stock or other similar securities,
or may reserve the right so to provide after the time of grant.
ARTICLE 8 - STOCK APPRECIATION RIGHTS
A Stock Appreciation Right is a right to receive in cash the difference
between the Fair Market Value of a Share on the exercise date and the Grant
Date. A Stock Appreciation Right shall otherwise have the same terms and
conditions as an Option. Any Stock Appreciation Right related to a Nonstatutory
Option may be granted at the same time such Option is granted or at any time
thereafter before exercise or expiration of such Option. Any Stock Appreciation
Right related to an Incentive Option must be granted at the same time such
Option is granted. In the case of any Stock Appreciation Right related to any
Option, the Stock Appreciation Right or
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
applicable portion thereof shall terminate and no longer be exercisable upon the
termination or exercise of the related Option, except that a Stock Appreciation
Right granted with respect to less than the full number of Shares covered by a
related Option shall not be reduced until the exercise or termination of the
related Option exceeds the number of Shares not covered by the Stock
Appreciation Right. Any Option related to any Stock Appreciation Right shall no
longer be exercisable to the extent the related Stock Appreciation Right has
been exercised.
ARTICLE 9 - RESTRICTED STOCK
Restricted Stock is an Award in the form of Shares issued with the
restriction that the Participant may not sell, transfer, pledge or assign the
Shares and with any other restrictions that the Committee may impose (including
restrictions on the right to vote or receive cash dividends on the Shares) which
restrictions may lapse separately or in combination at such time or times, in
installments or otherwise, as the Committee shall determine. A Restricted Stock
Award may be evidenced in such manner as the Committee in its sole discretion
shall deem appropriate, including, without limitation, book-entry registration
or issuance of a stock certificate or certificates. In the event any stock
certificate is issued in respect of a Restricted Stock Award, such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award.
ARTICLE 10 - PERFORMANCE AWARDS
A Performance Award is an Award of Performance Units or Performance
Shares which vests and becomes non-forfeitable based on performance criteria
determined by the Committee to be achieved over a prescribed Performance Period.
An Award of Performance Shares is a number of units valued by reference to a
designated number of Shares, and an Award of Performance Units is a number of
units valued by reference to a designated amount of property other than Shares.
The performance criteria to be achieved during any Performance Period and the
length of the Performance Period shall be determined by the Committee upon the
grant of each Performance Award or at any time thereafter. Except as provided in
Articles 12 and 14, Performance Awards will be distributed only after the end of
the relevant Performance Period. Performance Awards may be paid in cash, Shares,
other property or any combination of the foregoing, in the sole discretion of
the Committee [upon the grant of the Performance Award] [at the time of
payment]. The performance levels which have been achieved for each Performance
Period and the amount of the Award to be distributed shall be conclusively
determined by the Committee. Performance Awards may be paid in a lump sum or in
installments following the close of the Performance Period.
ARTICLE 11 - OTHER STOCK UNIT AWARDS
Other Awards of Shares and other Awards that are valued in whole or in
part by reference to, or are otherwise based on, Shares ("Other Stock Unit
Awards") may be paid in Shares, other securities of the Company, cash or any
other form of property as the Committee shall determine [upon the grant of the
Other Stock Unit Award]. Other Stock Unit Awards may be issued with such
restrictions that the Committee may impose which restrictions may lapse
separately or in combination at such time or times, in installments or
otherwise, as the Committee shall determine. Shares purchased pursuant to other
Stock Unit Awards shall be purchased for such consideration as the Committee
shall in its sole discretion determine, which shall not be less than the Fair
Market Value of such Shares as of the date such Award is granted.
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
ARTICLE 12 - TERMINATION OF EMPLOYMENT
[Except as shall otherwise be provided in an Award Agreement, the provisions of
this Article 12 shall govern rights of Participants to exercise Options
following termination of employment. If a Participant terminates employment for
any reason other than Retirement, Disability or death (i) any portion of the
Participant's Options which are exercisable on the date employment terminates
may be exercised until the earlier of ninety days following termination of
employment or the original Expiration Date of the Option, and (ii) any portion
of an Option that is not exercisable on the date employment terminates shall be
forfeited and canceled, except that if the reason for the termination of
employment is a Company Action, then the Option shall become immediately
exercisable for the period specified in clause (i) with respect to the number of
Shares determined by the following formula, and shall be forfeited and canceled
with respect to the remaining Shares:
<TABLE>
<S> <C> <C>
Shares Original Shares Number of Completed Months Prior to
Termination of Employment Since
Exercisable = Granted X Granted
-----------------------------------
Number of Months from Grant Date to
Full Exercisability of Option
Minus: Number of Shares Exercisable or
Exercised Prior to Termination of Employment
</TABLE>
Upon termination of employment by reason of Retirement or Disability, any
portion of a Participant's Option that is then outstanding shall, to the extent
not then exercisable, be immediately, forfeited and canceled in its entirety. To
the extent that an Option is exercisable on the date of a Participant's
Retirement or Disability, the Option will remain exercisable until the original
Expiration Date of the Option. Notwithstanding the foregoing, if a Participant
terminates employment pursuant to a Company Action under circumstances that also
constitute Retirement for such Participant, then any portion of any Option of
the Participant which becomes exercisable by reason of this Article 12 along
with any portion of any Option of the Participant which is exercisable on the
date of termination of employment shall be exercisable, until the original
Expiration Date of the relevant Option. Upon the death of a Participant, the
outstanding portion of such Participant's Option shall, to the extent not then
exercisable, become immediately exercisable in full and the Option shall remain
exercisable until the original Expiration Date of the Option. The Committee or
its Delegate may, in its sole discretion, waive or modify the application of
this Article 12 in the case of any individual Participant. This Article 12
applies only to Options; however the Committee may provide for similar treatment
of other forms of Awards at the time that the Award is granted.
ARTICLE 13 - NONASSIGNABILITY
No award granted under the Plan shall be assigned or transferred by the
Participant otherwise than by will or by the laws of descent and distribution,
and such Award shall be exercisable, during the Participant's lifetime, only by
the Participant.
ARTICLE 14 - CHANGE IN CONTROL PROVISIONS
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
Notwithstanding any other provision of the plan to the contrary, unless the
Committee shall determine otherwise at the time of grant with respect to a
particular Award, in the event of a Change in Control any Options and Stock
Appreciation Rights outstanding as of the date such Change in Control is
determined to have occurred, and which are not then exercisable and vested,
shall become fully exercisable and vested to the full extent of the original
grant and any Restricted Stock or Other Stock Unit Awards which are not then
vested shall become vested and non-forfeitable to the full extent of the
Original Grant. If a Change in Control occurs or is to occur during a
Performance Period, the Committee shall determine the extent to which
Performance Awards shall vest or shall be adjusted in accordance with Article
3(c) in the event of a Change in Control. This determination shall be made by
individuals who are members of the Incumbent Board as defined in the definition
of a Change in Control in Article 1(d).
ARTICLE 15 - RESERVATION OF SHARES
The Company, during the term of this Plan, will at all times reserve and keep
available, and will seek or obtain from any regulatory body having jurisdiction
any requisite authority necessary to issue and to sell, the number of Shares
that shall be sufficient to satisfy the requirements of this Plan. The inability
of the Company to obtain from any regulatory body having jurisdiction the
authority deemed necessary by counsel for the Company for the lawful issuance
and sale of Shares shall relieve the Company of any liability in respect of the
failure to issue or sell Shares as to which the requisite authority has not been
obtained.
ARTICLE 16 - TAXES
The Company and any Subsidiary shall have the right to condition the grant or
exercise of any Award on a Participant's payment of any applicable amounts
required by a governmental agency to be withheld from payment to the Participant
or paid or deducted by the Company or a Subsidiary in connection with an Award
("withholding tax"). The Company and any Subsidiary shall also have the right to
deduct any withholding tax from a Participant's other compensation or to make
any other arrangements to satisfy withholding tax obligations, including
arrangements with one or more brokerage firms pursuant to cashless exercise
procedures. The Company and any Subsidiary shall further have the right to
deduct from any payment under an Award under the Plan or from a Participant's
other compensation any tax or social insurance payment imposed on the Company or
Subsidiary in connection with such Award.
ARTICLE 17 - EMPLOYEES BASED OUTSIDE OF THE UNITED STATES
Notwithstanding any provision of the Plan to the contrary, in order to foster
and promote achievement of the purposes of the Plan or to comply with the
provisions of laws in other countries in which the Company and its Subsidiaries
operate or have Employees, the Committee or its Delegate, in its sole
discretion, shall have the power and authority to (1) determine which Employees
that are subject to the tax laws of nations other than the United States are
eligible to participate in the Plan, (2) modify the terms and conditions of any
Awards granted to such Employees (including the grant of Stock Appreciation
Rights or some other comparable form of award ("Substitute Award") in lieu of
Options, and (3) establish subplans, modified Option exercise procedures and
other terms and procedures to the extent such actions may be necessary or
advisable provided, however, that the Committee may not grant such Awards that
do not comply with the limitations of Article 3. Any subplans established under
this Article 17 by the Committee shall be attached to this Plan as appendices.
The terms of this Plan applicable to Options shall apply with like effect to
Stock Appreciation Rights, Restricted Stock Awards,
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
Performance Awards, Other Stock Unit Awards and Substitute Awards to the extent
legally permissible.
ARTICLE 18 - AMENDMENT OF PLAN
The Board may amend the Plan at any time and from time to time. The Board may,
at any time or from time to time, suspend or terminate this Plain in whole or in
part.
No such amendment, suspension or termination of the Plan may, however, impair
any Award granted prior to such amendment, suspension or termination, without
the written consent of the affected Participant.
ARTICLE 19 - TERM OF PLAN
The Plan shall become effective as of October 1, 2000.
The Plan shall terminate on October 1, 2005 or at such earlier date as may be
determined by the Board of Directors. Termination of the Plan, however, shall
not affect the rights of Participants under Awards previously granted to them,
and all unexpired Awards shall continue in force and operation after termination
of the Plan except as they may lapse or be terminated pursuant to this Plan.
ARTICLE 20 - CODE SECTION 162(m) PROVISIONS
(a) Notwithstanding any other provision of this Plan, if the Committee
determines at the time Restricted Stock, a Performance Award or an Other Stock
Unit Award is granted to a Participant that such Participant is, or may be as of
the end of the tax year for which the Company would claim a tax deduction in
connection with such Award, a Covered Employee, then the Committee may provide
that this Article 24 is applicable to such Award under such terms as the
Committee shall determine.
(b) If an Award is subject to this Article 24, then the lapsing of
restrictions thereon and the distribution of cash, Shares or other property
pursuant thereto, as applicable, shall be subject to the Company having a level
of Net Income for the fiscal year preceding lapse or distribution set by the
Committee within the time prescribed by Section 162(m) of the Code or the
regulations thereunder in order for the level to be considered
"pre-established". The Committee may, in its discretion, reduce the amount of
any Performance Award or Other Stock Unit Award subject to this Article 24 at
any time prior to payment based on such criteria as it shall determine,
including but not limited to individual merit and the attainment of specified
levels of one or any combination of the following: net cash provided by
operating activities, earnings per Share from continuing operations, operating
income, revenues, gross margin, return on operating assets, return on equity,
economic value added, stock price appreciation, total shareowner return
(measured in terms of stock price appreciation and dividend growth), or cost
control, of the Company or the Subsidiary or division of the Company for or
within which the Participant is primarily employed.
(c) Notwithstanding any contrary provision of the Plan other than
Article 14, the Committee may not adjust upwards the amount payable pursuant to
any Award subject to this Article 24, nor may it waive the achievement of the
Net Income requirement contained in Article 24(b), except in the case of the
death or disability of a Participant.
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AVAYA INC. 2000 LONG TERM INCENTIVE PLAN
(d) Prior to the payment of any Award subject to this Article 24, the
Committee shall certify in writing that the Net Income requirement applicable to
such Award was met.
(e) The Committee shall have the power to impose such other
restrictions on Awards subject to this Article 24 as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section 162(m)(4)(C) of
the Code, the regulations promulgated thereunder, and any successors thereto.
ARTICLE 21 - GOVERNING LAW
The Plan, and the validity and construction of any Awards granted hereunder
shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Plan, as amended, to be executed
on this ___ day of ________, 2000.
For Avaya Inc.
By: __________________________
Attest: __________________________
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