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Exhibit 10.12
AVAYA INC. 2000
STOCK COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
EFFECTIVE OCTOBER 1, 2000
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE 1. PURPOSE.
The purpose of the Avaya Inc. 2000 Stock Compensation Plan for
Non-Employee Directors (the "Plan") is to enable Avaya Inc., a Delaware
corporation (the "Company"), to attract and retain qualified persons to serve as
directors, to enhance the equity interest of directors in the Company, and to
solidify the common interests of its directors and shareholders in enhancing the
value of the Company's common stock. The Plan seeks to encourage the highest
level of director performance by providing directors with a proprietary interest
in the Company's performance and progress.
ARTICLE 2. DEFINITIONS.
As used in the Plan, the following terms shall have the meanings set
forth below:
"Affiliate" shall mean (i) any Person that directly, or through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Company or (ii) any entity in which the Company has a significant
equity interest, as determined by the Committee.
"Annual Meeting" shall mean the Company's annual, general meeting of
shareholders.
"Annual Term" shall mean each twelve calendar-month period beginning on
March 1, 2001 and each March 1 thereafter.
"Board" shall mean the Board of Directors of the Company.
"Business Day" means any day on which the New York Stock Exchange is
open for transaction of business.
"Change in Control" shall mean the happening of any of the following
events:
(i) An acquisition by any individual, entity or group (within
the meaning of Article 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 being so converted
was itself acquired directly from the Company, (2) any acquisition by the
Company, (3)
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
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 section (iii) of this sentence; or
(ii) A change in the composition of the Board during any two
year period such that the individuals who, as of the beginning of such two year
period, constitute the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of this definition, any individual
who becomes a member of the Board subsequent to the beginning of the two year
period, whose election, or nomination for election by the Company's
shareholders, 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 shareholders 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 shareholders, 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 the
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of 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 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, (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
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
such Corporate Transaction or the combined voting power of the outstanding
voting securities of such corporation entitled to vote generally in the election
of 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 shareholders of the Company of a
complete liquidation or dissolution of the Company.
"Committee" shall mean the Corporate Governance and Compensation
Committee of the Board (or any successor committee consisting of two or more
members of the Board).
"Company" shall mean Avaya Inc., a Delaware corporation.
"Deferral Plan" shall mean the Company's Deferred Compensation Plan,
and any successor or replacement plan then in effect with respect to
Participants.
"Exercise Date" shall have the meaning prescribed by Article 6.
"Fair Market Value" shall mean, with respect to Shares, the average of
the highest and lowest reported sales prices, regular way, of Shares in
transactions reported on the New York Stock Exchange on the date of
determination of Fair Market Value, or if no sales of Shares are reported on the
New York Stock Exchange for that date, the comparable average sales price for
the last previous day for which sales were reported on the New York Stock
Exchange.
"Grant Date" means the date on which an Option or Stock Retainer is
granted under the Plan.
"Option" shall mean a non-statutory stock option granted under Article
6 of the Plan.
"Participant" shall mean each member of the Board from time to time who
is not a full-time employee of the Company or any of its Affiliates.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, limited
liability company, other entity or government or political subdivision thereof.
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
"Retainer" shall mean the retainer paid to each Participant as
compensation for services as a member of the Board or any committee of the Board
with respect to each Annual Term, but shall not include any reimbursement for
expenses.
"Shares" shall mean the shares of common stock, $.01 par value, of the
Company.
"Stock Retainer" shall mean that portion of a Participant's Retainer
which, pursuant to Article 5 of this Plan, such Participant has elected, or is
required, to receive in Shares.
ARTICLE 3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee shall
have full power and authority, subject to such resolutions not inconsistent with
the provisions of the Plan as may from time to time be adopted by the Board, to
(i) interpret and administer the Plan and any instrument or agreement entered
into under the Plan; (ii) establish such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (iii) make any other determination and take any other action that the
Committee deems necessary or desirable for administration of the Plan. Decisions
of the Committee shall be final, conclusive and binding upon all Persons,
including the Company, any Participants or any shareholder.
ARTICLE 4. SHARES SUBJECT TO THE PLAN.
(a) Subject to adjustment as provided in Article 4(b), the total number
of Shares available for Options and Stock Retainers granted under the Plan shall
be one million (1,000,0000) Shares; provided, that if any Shares are subject to
an Option that is forfeited, expires, or otherwise is terminated without
issuance of Shares, the Shares subject to such Option shall again be available
for Options and Stock Retainers under the Plan.
(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
Options as the Committee in its sole discretion deems equitable or appropriate,
including without limitation such adjustments in the aggregate number, class and
kind of Shares which may be delivered under the Plan, and in the number, class,
kind and option or exercise price of Shares subject to outstanding Options as
the Committee may determine to be appropriate in its sole discretion to prevent
dilution or enlargement of rights; provided that the number of Shares or other
securities subject to any Option shall always be a whole number.
ARTICLE 5. STOCK RETAINER.
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
(a) Commencing with the Annual Term beginning March 1, 2001, each
Participant will receive fifty percent (50%) of his or her Retainer for each
Annual Term in the form of a Stock Retainer and may elect to receive all or any
portion of the remaining fifty percent (50%) of such Retainer in the form of
either a Stock Retainer or in cash; provided, that each Participant may elect to
receive in lieu of any or all of any amount to be paid as a Stock Retainer a
payment in the form of an Option for the number of Shares determined pursuant to
Article 6(b).
(b) If any Participant fails to notify the Secretary of the Company in
writing by December 31 of the preceding Annual Term of the desired form of
payment of the Retainer for the next Annual Term, then such Participant shall be
deemed to have elected a Stock Retainer for fifty percent (50%) of the value of
such Retainer, with the remaining 50% in cash. Any such election shall be filed
on a form prescribed by the Company for this purpose and such election (or
failure to elect) shall be irrevocable as of the last date by which such
election was due to be filed with the Company.
(c) Any Shares constituting a Stock Retainer shall be payable
automatically on March 1 of each Annual Term (or, if March 1 is not a Business
Day, on the next succeeding Business Day), commencing March 1, 2001. Payments
for the cash portion, if any, of the Annual Retainer shall be made on the same
day. A Participant's Stock Retainer shall consist of the largest number of whole
Shares having a Fair Market Value, as of the date of payment, equal to the
portion of the Retainer to be paid in Shares. The Fair Market Value of any
fractional share shall be paid in cash. A Participant may elect to have all or a
portion of the Shares or cash otherwise deliverable under this Article 5
credited to the deferred compensation account of such Participant under the
Deferral Plan to be held in, respectively, the Company Shares and cash portions
of such account.
(d) This Article 5 shall apply to any person who becomes a Participant
other than at the beginning of an Annual Term (or the immediately preceding
Annual Meeting) with respect to the Retainer determined by the Committee to be
payable for such portion of such Annual Term which follows his or her
appointment to the Board. Such person shall make the election prescribed by
Article 5(a) no later than the 30th day following the effective date of his or
her appointment to the Board. The payment date for any cash portion of the
Retainer and the Grant Date for any Option or Stock Retainer shall be the first
Business Day which occurs at least fifteen (15) calendar days after receipt by
the Company of such election.
ARTICLE 6. OPTIONS.
(a) On or about October 2, 2000, there shall be granted to each
Participant, an inaugural grant of an Option to purchase the largest whole
number of Shares obtained by employing the following formula, on the terms and
conditions described in this plan:
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
<TABLE>
<S> <C> <C>
Number of Shares = 3 X $50,000
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Fair Market Value of a Share on October 2, 2000
</TABLE>
The value of any fractional Share shall be paid in cash.
(b) Commencing with the Annual Term beginning March 1, 2001, there
shall be granted on March 1 of each Annual Term (or, if March 1 is not a
Business Day, on the next succeeding Business Day) to each Participant who has
elected, pursuant to Article 5, payment of all or any portion of the Retainer in
the form of an Option, an Option, on the terms and conditions described in this
Plan, to purchase the largest number of whole Shares obtained by applying the
following formula:
<TABLE>
<S> <C> <C>
Number of Shares = 3 X Dollar Amount of Retainer to be paid as an Option
-------------------------------------------------
Fair Market Value of a Share on March 1*
</TABLE>
*or, if March 1 is not a Business Day, on the next succeeding Business
Day.
The value of any fractional share shall be paid in cash.
(c) Options shall be subject to the terms and conditions set forth in
this Plan and to such additional terms and conditions, not inconsistent with the
provisions of this Plan, as the Committee shall deem desirable.
(d) The exercise price per Share under an Option shall be the Fair
Market Value of a Share on the Grant Date, subject to adjustment as prescribed
in Article 4(b).
(e) The term of each Option shall be ten years from the Grant Date.
(f) Options shall be vested and non-forfeitable on the Grant Date and
be fully exercisable on the earliest of (i) the date which is six (6) months
after the Grant Date, (ii) the occurrence of a Change in Control and (iii) the
death of a Participant (any of the foregoing the "Exercise Date").
(g) Except as provided in this Article 6(g), an Option is not
transferable other than by will or the laws of descent and distribution, and
during the lifetime of the Participant may be exercised only by such Participant
or his or her guardian or legal representative. The Option may be transferred by
the Participant, in accordance with rules established by the Company, to one or
more members of the Participant's immediate family, to a partnership of which
the only partners are members of such immediate family or to a trust established
by the Participant for the benefit of one or more members of such immediate
family (each such transferee a "Permitted Transferee"). For purposes of this
Article 6(g), "immediate family" means a Participant's spouse, parents,
children, grandchildren and spouses of children and grandchildren (including
adopted children and grandchildren, as the case may be). A Permitted Transferee
may not further transfer the Option. An Option transferred
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
pursuant to this Article 6(g) shall remain subject to all of the provisions of
the Plan and any Agreement with respect to such Option and may not be exercised
by a Permitted Transferee unless and until all legal or regulatory approvals,
listings, registrations, qualifications or other clearances as determined by the
Company to be required or appropriate have been obtained.
(h) A Participant may, in accordance with procedures established by the
Company, designate one or more beneficiaries to receive all of his or her rights
to any unexercised Option and may change or revoke such designation at any time.
In the event of the death of the Participant, any Option or portion thereof
which is subject to such a designation shall be exercisable (to the extent such
designation is determined by the Company to be valid, effective and enforceable)
by the designated person or persons in accordance with this Plan and any
Agreement. Such determination by the Company shall be final and binding on all
Persons, and the Company shall have no liability with respect to any Person with
respect to such determination.
(i) Any Option may be exercised by the Participant in whole or in part
at any time on or after the Exercise Date and before the expiration of such
Option. The Participant shall make payment of the Option price in cash or in
Shares with a Fair Market Value equivalent to the exercise price for all of the
Shares to be purchased upon exercise of the Option.
ARTICLE 7. AMENDMENTS AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under an Option theretofore granted, without the Participant's
consent, or that without the approval of the shareholders would:
(a) except as is provided in Article 4(b) of the Plan, increase the
total number of shares reserved for the purpose of the Plan; or
(b) change the Participants eligible to participate in the Plan.
ARTICLE 8. GENERAL PROVISIONS.
(a) Nothing in the Plan shall be deemed to create any obligation on the
part of the Board to nominate any director for reelection by the Company's
shareholders or to limit the rights of the shareholders to remove any director.
(b) The Company shall have the right to require, prior to the issuance
or delivery of any Shares pursuant to the Plan, payment by a Participant to the
Company of any taxes required by law to be withheld with respect to the issuance
or delivery of such Shares.
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
(c) Shares issued or delivered under the Plan shall be in either book
entry form or in certificate form pursuant to instructions given by the
Participant to the Company. All Shares delivered under the Plan shall be subject
to such stop-transfer orders and other restrictions as the Company may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Shares are then
listed, and any applicable Federal or state securities law, and the Company may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(d) The issuance or delivery of any Shares under this Plan may be
postponed by the Company for such period as may be required to comply with any
applicable requirements under the Federal securities laws, any applicable
listing requirements of any national securities exchange and requirements under
any other law or regulation applicable to the issuance or delivery of such
Shares, and the Company shall not be obligated to issue or deliver any Shares if
the issuance or delivery of such Shares shall constitute a violation of any
provision of any law or of any regulation of any governmental authority or any
national securities exchange.
(e) The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan shall be determined in accordance with the
laws of the State of Delaware without regard to principles of conflicts of laws.
(f) If any provision of this Plan is or becomes or is deemed invalid,
illegal or unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Company, such provision shall
be construed or deemed amended to conform to applicable laws or if it cannot be
construed or deemed amended without, in the determination of the Company,
materially altering the intent of the Plan, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.
ARTICLE 9. EFFECTIVE DATE OF PLAN.
The Plan first becomes effective on October 1, 2000.
ARTICLE 10. TERM OF PLAN.
No Option or Stock Retainer shall be granted pursuant to the Plan after
October 1, 2007, but any Option theretofore granted may extend beyond that date.
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AVAYA INC. 2000 STOCK COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
IN WITNESS WHEREOF, the undersigned have executed the Avaya Inc. 2000
Stock Compensation Plan for Non-Employee Directors effective as of October 1,
2000.
AVAYA INC. Attested to:
By: ____________________________ By:____________________________
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