8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 1, 2010 (June 28, 2010)

AVAYA INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-15951	22-3713430
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

211 Mount Airy Road Basking Ridge, New Jersey	07920
(Address of Principal Executive Office)	(Zip Code)

Registrant’s telephone number, including area code: (908) 953-6000

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Separation Agreement with Mr. Todd A. Abbott

On June 3, 2010, Avaya Inc. (the “Company”) announced that Todd A. Abbott will step down as Senior Vice President, Global Sales & Marketing and President, Field Operations, effective June 14, 2010.

Following that announcement, on July 1, 2010, the Company and Mr. Abbott executed a Separation Agreement and General Release (the “Separation Agreement”) outlining the terms and conditions regarding his termination of employment. Pursuant to the Separation Agreement, Mr. Abbott will continue service as a non-executive employee of the Company until the earlier of September 30, 2010 or the date that Mr. Abbott accepts employment at another employer (the “Termination Date”). As consideration for executing his Separation Agreement and complying with its terms, the Company has agreed to:

(i) continue to pay Mr. Abbott his base salary up to and including the Termination Date;

(ii) make a cash payment of payment of $1,750,000, less withholdings required in accordance with applicable law, paid in three installments as follows: the first payment of $1,000,000 payable within 30 days from the Termination Date; a second payment of $150,000 payable within 6 months from the Termination Date; and, a third payment of $600,000 payable within 12 months from the Termination Date, with each payment expressly conditioned on Mr. Abbott satisfying certain obligations set forth in the Separation Agreement;

(ii) make a cash payment in an amount equal to Mr. Abbott’s accrued and unused vacation for fiscal year 2010; and

(iii) continue to provide coverage to Mr. Abbott under the Avaya Inc. Medical Expense Plan and the Avaya Inc. Dental Expense Plan for a period up to three (3) months after the month of the Termination Date.

As consideration for amounts payable to Mr. Abbott under the Separation Agreement, Mr. Abbott has agreed, among other things, to provisions regarding non-competition, non-solicitation of customers and employees, non-disparagement and a general release of the Company from any other amounts that might otherwise be payable to Mr. Abbott, including but not limited to amounts that may otherwise be payable under the terms of any Company separation plan.

The preceding summary of the Separation Agreement is qualified in its entirety by reference to the Separation Agreement attached as Exhibit 10.1 as though it was fully set forth herein.

Compensatory Arrangements of James M. Chirico, Jr.

On June 3, 2010, the Company announced that James M. Chirico, Jr. has been appointed as Executive Vice President, Business Operations effective June 14, 2010. In connection with Mr. Chirico’s appointment, on June 28, 2010 the Compensation Committee of the Board of Directors (the “Board”) of the Company approved the following fiscal 2010 compensation arrangements:

Annual Base Salary:	$625,000
Target Annual Cash Bonus Award (1):	85% of Annual Base Salary
Restricted Stock Units (RSUs) (2):	75,000 RSUs, vesting equally on the first and second anniversaries of the grant date

(1) Subject to the terms and conditions of the Avaya Inc. Short Term Incentive Plan (filed with the Securities and Exchange Commission (“SEC”) on December 23, 2009 as Exhibit 10.14 to the Company’s Registration Statement on Form S-4 (Registration No. 333-163998)).

(2) The grant date of the RSUs will be July 1, 2010 and the exercise price for the stock options will be $3.00 per share. The RSU grant is subject to the terms and conditions of the Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan (the “2007 LTIP”) (filed with the SEC as Exhibit 10.2 hereto) and the provisions of Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan Restricted Stock Unit Award Agreement (a form of which is filed with the SEC as Exhibit 10.3 hereto).

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
10.1	Separation Agreement and General Release, dated as of July 1, 2010, between Avaya Inc. and Todd Abbott
10.2	Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan
10.3	Form of Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan Restricted Stock Unit Award Agreement
10.4	Form of Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan Stock Option Award Agreement for Senior Vice Presidents and Vice Presidents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AVAYA INC.
Date: July 1, 2010	By:	/S/    PAMELA F. CRAVEN
	Name:	Pamela F. Craven
	Title:	Chief Administrative Officer

EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Separation Agreement”) is entered into by and between Todd Abbott (“You” or “Abbott”) and Avaya Inc. (“Avaya” or “Company”), and confirms the agreement that has been reached with you in connection with your termination of employment with the Company.

1. Termination of Employment. You agree that your employment with Avaya shall terminate no later than September 30, 2010, or on the date that you accept employment at another employer (if that occurs prior to September 30, 2010) (“Termination Date”), and until the Termination Date, you will in good faith and under the direction of the Board of Directors (including any committees thereof) and the Chief Executive Officer (“CEO”) and any of their respective designees, perform any duties requested of you. You will be paid your base salary up to and including the Termination Date. You will not be eligible for any awards, bonuses, including any amounts paid pursuant to the Avaya Short Term Incentive Plan (“STIP”), or any other payments, except as set forth in this Agreement. You agree that if you obtain employment at another employer prior to September 30, 2010, you will notify Avaya in writing of such employment within three (3) calendar days of accepting the offer.

2. Payments. In consideration of your execution of this Separation Agreement and your compliance with its terms and conditions, and provided that you execute this Separation Agreement and do not revoke it within the time frame provided herein for such revocation, the Company agrees to pay or provide you with the following in lieu of the payments provided in the Involuntary Separation Plan for Senior Officers:

a. A payment of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000), less withholdings required in accordance with applicable law, paid in three installments as follows: first payment of One Million Dollars ($1,000,000), payable within thirty (30) days from the Termination Date; a second payment of One Hundred Fifty Thousand Dollars ($150,000), payable within 6 months from the Termination Date; and, a third payment of Six Hundred Thousand Dollars ($600,000), within 12 months from the Termination Date, with each payment expressly conditioned on you satisfying your obligations set forth in paragraph 7 of this Separation Agreement and in the other agreements and documents referred to in paragraph 7 of this Separation Agreement. Should Abbott become deceased prior to October 1, 2011, Avaya shall pay any unpaid installments referenced in this paragraph 2(a) to his estate on the next scheduled payment date(s) upon written notification and request from the executor/executrix authorized to make such requests on behalf of his estate.

b. Accrued and unused vacation for fiscal year 2010.

c. Continued coverage under the Avaya Inc. Medical Expense Plan and the Avaya Inc. Dental Expense Plan for a period up to three (3) months after the month of your Termination Date by paying the applicable Consolidated Omnibus Budget Reconciliation Act (“COBRA”) premium rates.

3. Expenses and Certain Benefits. You will be paid for any previously submitted un-reimbursed business expenses (in accordance with usual Company guidelines and practices), to the extent not theretofore paid. In addition, you will be entitled to receive vested amounts, if any, payable to you under the Company’s 401(k) plan and other retirement and deferred compensation plans in accordance with the terms of such plans and applicable law. Except as specifically set forth herein, your participation in all Company plans, including any and all equity and/or deferred compensation plans, shall remain subject to the terms and conditions of such plans as in effect from time to time and you agree that such terms and conditions are binding on you and the Company. Further, other than the payments and benefits set forth in section 2 above and this section 3 (and any provisions of the Equity Plans and Equity Agreements referred to below), you are not entitled to any other payments or benefits of any kind based on any agreement, plan or practice of Avaya.

4. Non-Disparagement. You agree that you will not disparage or encourage or induce others to disparage any of the Company, its subsidiaries and affiliates, together with all of their respective past and present directors, managers, officers, shareholders, partners, employees, agents, attorneys, servants and clients and each of their predecessors, successors and assigns (collectively, the “Company Entities and Persons”). For the purposes of this Separation Agreement, the term “disparage” as used in this section 4 includes, without limitation, comments or statements adversely affecting in any manner (i) the conduct of the business of the Company Entities and Persons or (ii) the business reputation of the Company Entities and Persons. Nothing in this Separation Agreement is intended to or shall prevent you from providing testimony in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law. Avaya will take reasonable steps to provide that no member of the Executive Council makes any negative or derogatory remarks, comments or statements about you, your character or your performance while employed at Avaya. Further, Avaya will notify the members of the Sierra Holding Company Board of Directors that it is Avaya’s practice to provide neutral references with respect to inquiries from prospective employers and that any such inquiries to said Board of Directors members will be directed to the Senior Vice President, Human Resources, of Avaya.

5. Cooperation. You agree that you will cooperate with the Company Entities and Persons and its or their respective counsel, in connection with any investigation, inquiry, administrative proceeding or litigation relating to any matter in which you were involved or of which you have knowledge by providing truthful information, provided that such cooperation does not unreasonably interfere with your then current professional and personal commitments. The Company agrees to reimburse you promptly for any and all reasonable expenses necessarily incurred by you in connection with your cooperation pursuant to this section 5. You agree that, in the event you are subpoenaed by any person

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or entity (including, but not limited to, any government agency) to give testimony (in a deposition, court proceeding or otherwise) which in any way relates to your employment by the Company, you will give prompt notice of such request within two (2) business days of such request to the Chief Administrative Officer or Vice President, Law, Labor, Employment, Benefits and Litigation, of the Company, at Avaya Inc. 211 Mount Airy Road 3W365, Basking Ridge, NJ 07920, and will provide the Company with a reasonable opportunity to contest the right of the requesting person or entity to such disclosure before making such disclosure. Nothing in this provision shall require you to violate your obligation to comply with valid legal process.

6. Company Property. You represent that as of the Termination Date, you will have returned to the Company all property belonging to the Company and/or the Company Entities and Persons including but not limited to computers, cell phones, personal communication devices, keys, card access to the building and office floors, credit card(s) and phone card(s) (“Company Property”).

7. Post-Employment Obligations. You acknowledge that you have signed stock option equity agreements pursuant to the Sierra Holdings Amended and Restated 2007 Equity Plan and the Management Stockholders’ Agreement (“Equity Agreements and Equity Plans”) which govern exclusively the terms of your equity rights and participation in such agreements and plans. After the Termination Date, during the subsequent twelve (12) month period you will continue to comply with your obligations under any post-employment restrictive covenant, including, but not limited to, Appendix I of the Non-Disclosure, IP Assignment, Non-Solicitation and Non-Competition provisions of your Senior Management Nonstatutory Time-Based Option Agreement, signed by you as part of the Equity Plans and Equity Agreements. You shall notify your new employer(s) of your obligations under this Separation Agreement and Appendix I, and you hereby consent to notification by the Company to such employer(s) concerning your obligations under this Separation Agreement and the Equity Plans and Equity Agreements. The Company shall treat any such notice and information as confidential, and will not use or disclose the information contained therein except to enforce its rights hereunder. For the avoidance of doubt, Abbott’s post-employment obligations include, but are not limited to, the following:

a. Non-Competition. During the period prior to the Termination Date and for the 12-month period immediately following the Termination Date, you will not work for or provide services to, in any capacity, whether as an employee, independent contractor or otherwise, whether with or without compensation, to any Material Competitor (as defined below). The foregoing shall not prevent: (i) passive ownership by Abbott of no more than two percent (2%) of the equity securities of any publicly traded company; or (ii) Abbott’s providing services to a division or subsidiary of a multi-division entity or holding company, so long as no division or subsidiary to which Abbott provides services is a Material Competitor, and Abbott does not otherwise engage in competition on behalf of the multi-division entity or any competing division or subsidiary thereof. A “Material Competitor” means an entity, or a division or subsidiary of a multi-division entity or holding company, which engages in business in one or more of the fields in which the Company conducts business and from which the Company derives at least 10% of its annual gross revenues, as determined as of the Termination Date.

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b. Non-Solicitation of Customers. During the period prior to the Termination Date and for the 12-month period immediately following the Termination Date, Abbott will not, directly or indirectly, (a) solicit, encourage or induce any customer of the Company to terminate or diminish in any substantial respect its relationship with the Company; or (b) seek to persuade or induce any such customer or prospective customer of the Company to conduct with anyone else any substantial business or activity which such customer or prospective customer conducts or could conduct with the Company; provided that the restrictions in (a) and (b) shall apply (i) only with respect to those entities who are or have been a customer of the Company at any time within the immediately preceding one-year period from the Termination Date or whose business has been solicited on behalf of the Company by any of its officers, employees or agents within said one-year period, other than by form letter, blanket mailing or published advertisement, provided that in each instance of this subparagraph 7(b)(i) that Abbott had knowledge of such relationship and (ii) only if Abbott has performed work for such customer during the immediately preceding one-year period from the Termination Date or has been introduced to, or otherwise had contact with, such customer as a result of his employment or other associations with the Company or has had access to Confidential Information which would assist in the solicitation of such customer. The foregoing restrictions shall not apply to general solicitation or advertising, including through media and trade publications.

c. Non-Solicitation/Non-Hiring of Employees and Independent Contractors. During the period prior to the Termination Date and for the 12-month period immediately following the Termination Date, Abbott will not, and will not assist anyone else to, (a) hire or solicit for hiring any employee of the Company or seek to persuade or induce any employee of the Company to discontinue employment with the Company, or (b) hire or engage any independent contractor providing services to the Company, or solicit, encourage or induce any independent contractor providing services to the Company to terminate or diminish in any substantial respect its relationship with the Company. For the purpose of this provision, an “employee” or “independent contractor” of the Company is any person who is or was such at any time within the preceding six-month period. The foregoing restrictions shall not apply to general solicitation or advertising, including through media, trade publications and general job postings.

d. Notwithstanding anything set forth in this paragraph 7 (including any subparagraphs) and in the Equity Agreements and Equity Plans, you understand and agree that in exchange for the consideration set forth in this Separation Agreement you will not work for or provide services to, in any capacity, whether as an employee, independent contractor, consultant or otherwise, whether with or without compensation, to any of the following companies or their affiliates, parents, subsidiaries, successors or assigns, for the period prior to the Termination Date and for the 12-month period immediately following the Termination Date: [            ]; provided, however,

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that upon your request to work for or provide services to a subsidiary, unit or division of any of the above-named entities in this paragraph 7(d) which does not engage in a business or market in which Avaya is engaged as of the Termination Date, Avaya will consider in good faith whether to permit you to work for or provide services to such entity without alleging a violation of this paragraph 7(d).

8. General Release and Waiver. You agree that in consideration of the benefits provided to you pursuant to this Separation Agreement, other than claims related to enforcement of this Separation Agreement that you hereby waive, release and forever discharge any and all claims and rights which you ever had, now have or may have against Avaya Inc. and any Company Entities and Persons, based on any act, event or omission occurring before you execute this Separation Agreement arising out of, during or relating to your employment or services with the Company or the termination of such employment or services. This waiver and release includes, but is not limited to, any claims which could be asserted now or in the future, under: common law, including, but not limited to, breach of express or implied duties, wrongful termination, defamation, or violation of public policy; any policies, practices, or procedures of the Company; any federal or state statutes or regulations including, but not limited to, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, 29 U.S.C. §621 et seq., 42 U.S.C. §2000e et seq., the Civil Rights Act of §§1866 and 1871, the Americans With Disabilities Act, 42 U.S.C. §12101 et seq., the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §1001 et seq. (excluding those rights which have vested under any ERISA plan), the Family and Medical Leave Act, §2601 et. seq., the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq.; the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et. seq.; any contract of employment, express or implied; any provision of the United States or New Jersey Constitutions; any provision of any other law, common or statutory, of the United States, the State of New Jersey or any other state or country; provided, however, that this Separation Agreement shall not preclude you from asserting a claim with the Equal Employment Opportunity Commission (“EEOC”) relating to your employment; provided, further, however, that you agree that you may not recover any recompense as a result of any such claim.

9. No Future Actions. By signing this Separation Agreement, you represent that you have not and will not in the future commence any action or proceeding arising out of the matters released hereby, and that you will not seek or be entitled to any award of legal or equitable relief in any action or proceeding that may be commenced on your behalf.

10. Knowing and Voluntary. You acknowledge that you: (a) have carefully read this Separation Agreement in its entirety; (b) understand and agree with everything in it; (c) have been advised to consult with a counsel of your selection regarding this Separation Agreement; (d) have been provided at least twenty-one (21) days to consider the terms of this Separation Agreement, although you may choose to sign this Separation Agreement and return it to the Company sooner; (e) have seven (7) additional days from the date you sign it to revoke it by providing written notice to the Senior Vice President and Chief Administrative Officer of the Company, at 211 Mt. Airy Road, Basking Ridge,

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New Jersey 07920, within such time period, in which case this Separation Agreement shall become null and void; (f) are signing this Separation Agreement voluntarily and of your own free will and agree to abide by all the terms and conditions contained herein; and, (g) are obtaining benefits under this Separation Agreement to which you are otherwise not already entitled.

11. Severability of Provisions. If any provision of this Separation Agreement is held by an arbitrator or court of competent jurisdiction to be illegal, void or unenforceable, such provision shall have no effect; however, the remaining provisions shall be enforced to the maximum extent possible. Further, if a court or arbitrator should determine that any portion of this Separation Agreement is overbroad or unreasonable, such provision shall be given effect to the maximum extent possible by narrowing or enforcing in part that aspect of the provision found overbroad or unreasonable. In addition, you agree that your willful and knowing failure to return Company Property that relates to the maintenance of security of the Company Entities and Persons or the maintenance of proprietary information constitutes a material breach of this Separation Agreement as to which the Company may seek all available relief under the law.

12. No Admission. This Separation Agreement is not intended, and shall not be construed, as an admission that either the Company Entities and Persons have violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract or committed any wrong whatsoever. You specifically agree that during your tenure at Avaya you have not witnessed, have no knowledge of and did not participate in, any actions and/or inactions that constitute violations of any laws, statutes, rules or regulations of any governing authorities or entities.

13. Construction. Should any provision of this Separation Agreement require interpretation or construction, it is agreed by the parties that the entity interpreting or construing this Separation Agreement shall not apply a presumption against one party by reason of the rule of construction that a document is to be construed more strictly against the party who prepared the document.

14. Binding on Heirs. This Separation Agreement is binding upon, and shall inure to the benefit of, the parties and their respective heirs, executors, administrators, successors and assigns.

15. Governing Law. This Separation Agreement shall be construed and enforced in accordance with the laws of the State of New Jersey without regard to the principles of conflicts of law. Any action to enforce the terms of this Separation Agreement must be brought in the State of New Jersey.

16. Section 409A. Notwithstanding anything in this Separation Agreement to the contrary, the parties hereby agree that it is the intention that any payments or benefits provided under this Separation Agreement comply in all respects with Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and any guidance issued thereunder, and this Separation Agreement be interpreted accordingly. In addition, in the

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event that additional guidance with respect to Section 409A of the Code becomes available prior to the Separation Date, upon your reasonable request, the parties will cooperate in good faith with a view towards amending this Separation Agreement solely to the extent necessary and appropriate to avoid adverse tax consequences pursuant to Section 409A of the Code, while retaining the economic benefits and burdens of the Separation Agreement to the fullest extent possible.

17. Entire Agreement. You acknowledge that this Separation Agreement and the Equity Plan and Equity Agreements referred to herein, constitute the complete understanding between the Company and you as it relates to the termination of your employment and your post-employment obligations, and supersede any and all agreements, understandings, and discussions, whether written or oral, between you and the Company, and any of the Company Entities and Persons. No other promises or agreements shall be binding on the Company unless in writing and signed by both the Company and you after the date of this Separation Agreement.

18. Acceptance of Agreement. You may accept this Separation Agreement by signing it and returning it to the Chief Administrative Officer, Avaya Inc., 211 Mount Airy Road, Basking Ridge, NJ 07920. The effective date of this Separation Agreement shall be the date it is signed by both parties. provided that the provisions of In the event you do not accept this Separation Agreement as set forth above, this Separation Agreement, including but not limited to the obligation of the Company to provide the payments and other benefits set forth in section 2, shall not take effect and will be null and void.

19. Miscellaneous. All section headings used in this Separation Agreement are for convenience only. This Agreement may be executed in counterparts, each of which is an original.

20. Execution of General Release Attached. You agree that, as a condition to your receipt of the payments and benefits set forth in paragraphs 2(a) through 2(c), you will execute the General Release attached hereto as Exhibit A on the Termination Date. Specifically, you agree that the consideration you are receiving for executing the General Release is the fact that you are remaining on Avaya’s payroll through the Termination Date.

21. Effective Date of Agreement. This Separation Agreement shall become effective as of the date it is signed by both parties provided that the payments and consideration set forth in paragraph 2(a) through 2(c) hereinabove shall become effective in accordance with dates set forth paragraph 2(a) of this Separation Agreement. In the event you do not accept this Separation Agreement as set forth above, this Separation Agreement, including but not limited to the obligation of Avaya to provide the payments and other benefits referred to in paragraphs 2(a) through 2(c) hereinabove, shall be deemed automatically null and void.

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Signature:	/s/ Todd Abbott	Date: June 18, 2010
	Todd Abbott
AVAYA INC.
By:	/s/ Pamela F. Craven	Date: July 1, 2010
Title:	Chief Administrative Officer

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EX-10.2

Exhibit 10.2

SIERRA HOLDINGS CORP.

AMENDED AND RESTATED

2007 EQUITY INCENTIVE PLAN

Effective as of October 26, 2007

Amended and Restated as of November 1, 2009

1. DEFINED TERMS

Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets forth certain operational rules related to those terms.

2. PURPOSE

The Plan has been established to advance the interests of the Company and its Affiliates by providing for the grant to Participants of Stock-based and other incentive Awards.

3. ADMINISTRATION

The Administrator has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards, subject only to Section 5 and other express provisions of the Plan; determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures; and otherwise do all things necessary to carry out the purposes of the Plan. Except as otherwise provided by the express terms of an Award Agreement, all determinations of the Administrator made under the Plan will be conclusive and will bind all parties.

4. LIMITS ON AWARDS UNDER THE PLAN

(a) Number of Shares. Subject to Section 4(b) and Section 7, a maximum of 49,848,157 shares of Stock may be delivered in satisfaction of Awards under the Plan. The number of shares of Stock delivered in satisfaction of Awards shall, for purposes of the preceding sentence, be determined net of shares of Stock withheld by the Company under any Award in payment of any exercise price with respect to such Award.

(b) Certain Additional Awards. Reference is made to the Awards specified on Exhibit B, which represent (i) Stock Options granted in substitution for certain options granted under the Avaya Inc. 2004 Long Term Incentive Plan and the Avaya Inc. 2000 Long Term Incentive Plan (the “Avaya Plans”), (ii) Awards of Stock Units granted in replacement for certain performance-based restricted stock unit awards granted under the Avaya Plans and (iii) Awards of Restricted Stock Units granted under the Plan (collectively, the “Additional Awards”). Shares of Stock subject to the Additional Awards shall be in addition to the shares specified in Section 4(a), but if any Additional Award expires unexercised or is satisfied in whole or in part without the issuance of shares, the shares of Stock previously subject to such Award shall not be available for future grants.

(c) Type of Shares. Stock delivered under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the Company.

5. ELIGIBILITY AND PARTICIPATION

The CEO, subject to the approval of the Administrator, will select Participants from among those key Employees and directors of, and consultants and advisors to, the Company or its Affiliates who, in the opinion of the CEO, are in a position to make a significant contribution to the success of the Company and its Affiliates. Eligibility for ISOs is limited to employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code. Eligibility for Stock Options other than ISOs is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Stock Option to the Company or to a subsidiary of the Company that would be described in the first sentence of Treas. Regs. § 1.409A-1(b)(5)(iii)(E).

Stock Options (other than those described in Section 4(b)) covering 39,679,637 shares of Stock shall be granted as soon as practicable after the Closing Date, in three tranches: (i) Stock Options for 25,791,763 shares of Stock subject to the time-based vesting rules set forth in the form of Award set forth in Exhibit C (ii) Stock Options for 6,943,937 shares of Stock subject to the performance-based vesting rules set forth in the form of Award set forth in Exhibit D and (iii) Stock Options for 6,943,937 shares of Stock subject to the performance-based vesting rules set forth in Exhibit E. Awards covering any remaining shares available under Section 4(a) during the four-year period beginning on October 26, 2007 shall be allocated and awarded to the persons selected by the CEO, subject to the approval of the Administrator, with the objective of allocating and awarding any remaining shares of Stock by the end of such four-year period.

6. RULES APPLICABLE TO AWARDS

(a) All Awards

(1) Award Provisions. The Administrator will determine the terms of all Awards, subject to the limitations provided herein, and will furnish to each Participant an Award Agreement setting forth the terms applicable to the Participant’s Award. By entering into an Award Agreement, the Participant agrees to the terms of the Award and of the Plan. Notwithstanding any provision of the Plan to the contrary, awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.

(2) Fair Market Value. In determining the fair market value of any share of Stock under the Plan, the Administrator shall make the determination, after receiving any recommendation of the CEO (i) if at the applicable reference date the Stock is not readily tradable on an established securities market, in accordance with Treas. Regs. § 1.409A-1(b)(5)(iv)(B) based on an independent third-party appraisal obtained not less frequently than annually and brought down not less frequently than semi-annually by the Administrator, and (ii) in every other case, using a methodology permitted under Treas. Regs. § 1.409A-1(b)(5)(iv)(A).

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(3) Transferability. Neither ISOs, nor, except as specified in the second sentence of this Section 6(a)(3), other Awards may be transferred other than by will or by the laws of descent and distribution, and during a Participant’s lifetime ISOs (and, except as the Administrator otherwise expressly provides, other non-transferable Awards requiring exercise) may be exercised only by the Participant, except as otherwise provided in the Management Stockholders’ Agreement. Awards other than ISOs may be transferred to one or more immediate family members or to one or more trusts, partnerships or other estate planning vehicles for the exclusive benefit of immediate family members that are natural persons, but only if the transferee qualifies as a “family member” as defined in Rule 701(c)(3) promulgated under the Securities Act of 1933 or in the instructions to Form S-8.

(4) Vesting, Etc. The Administrator may determine the time or times at which an Award will vest or become exercisable and the terms on which a Stock Option will remain exercisable. Without limiting the foregoing, the Administrator may at any time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise, however, the following rules will apply if a Participant’s Employment ceases:

(A) Immediately upon the cessation of Employment, all Stock Options held by the Participant or the Participant’s permitted transferees, if any, will immediately cease to be exercisable and will immediately terminate except as otherwise provided at (B), (C) or (D) below, and all other Awards held by the Participant or the Participant’s permitted transferees, if any, to the extent not already vested, will be immediately forfeited.

(B ) Subject to (C), (D), and (E) below, all Stock Options held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment, to the extent then exercisable, will remain exercisable for the shorter of (i) a period of 30 days or (ii) the period ending on the latest date on which such Stock Option could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

(C) All Stock Options held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the Participant’s death, Disability, or Retirement, to the extent then exercisable, will remain exercisable for the shorter of (i) the one year period ending with the first anniversary of the Participant’s death, Disability, or Retirement, as the case may be, or (ii) the period ending on the latest date on which such Stock Options could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

(D) All Stock Options held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the termination of the Participant’s Employment by the Company other than for Cause, or by reason of a voluntary termination for Good Reason, to the extent then exercisable, will remain exercisable for the shorter of (i) a period of 90 days, or (ii) the period ending on the latest date on which such Stock Options could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

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(E) For the avoidance of doubt, all Stock Options held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation if such cessation of Employment has resulted in connection with an act or failure to act constituting Cause.

(5) Taxes. The Administrator will make such provision for the withholding of taxes as it deems necessary. The Administrator may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock in satisfaction of tax withholding requirements (but not in excess of the applicable minimum statutory withholding rate), except that in the event of an exercise of the Award, or a portion of the Award, in connection with a cessation of Employment as result of death, Disability, termination without Cause, or voluntary termination for Good Reason, the Participant may elect to have shares of Stock held back by the Company in satisfaction of minimum tax withholding requirements.

(6) Dividend Equivalents, Etc. To the extent consistent with Section 409A (and with Section 422, in the case of ISOs), and subject to Section 7(c), the Administrator in its sole discretion may provide for supplemental cash payments in lieu of Stock-based dividends or other distributions to the holder of any Award that is not entitled to share in the actual dividend or distribution.

(7) Rights Limited. Nothing in the Plan will be construed as giving any person the right to continued Employment with the Company or its Affiliates, or any rights as a stockholder except as to shares of Stock actually issued under the Plan. The loss of existing or potential profit in an Award will not constitute an element of damages in the event of termination of Employment for any reason, even if the termination is in violation of an obligation of the Company or its Affiliate to the Participant.

(8) Section 409A. Each Award shall contain such terms as the Administrator determines, and shall be construed and administered, such that the Award either (i) qualifies for an exemption from the requirements of Section 409A, or (ii) satisfies such requirements.

(9) Management Stockholders’ Agreement. Unless otherwise specifically provided, all Awards issued under the Plan and all Stock issued thereunder will be subject to the Management Stockholders’ Agreement. No Award will be granted to a Participant and no Stock will be delivered to a Participant, in either case, until the Participant executes the Management Stockholders’ Agreement.

(b) Additional Rules Applicable to Stock Options

(1) Time And Manner Of Exercise. Unless the Administrator expressly provides otherwise, a Stock Option will not be deemed to have been exercised until the Administrator receives a notice of exercise (in form acceptable to the Administrator) signed by the appropriate person and accompanied by any payment required under the Award. If the Award is exercised by any person other than the Participant, the Administrator may require satisfactory evidence that the person exercising the Award has the right to do so.

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(2) Exercise Price. The Administrator will determine the exercise price of each Stock Option. The initial exercise price as so determined by the Administrator shall in no event be less than the Fair Market Value of the Stock.

(3) Payment Of Exercise Price. The exercise price of a Stock Option shall be paid as follows: (a) by cash or check acceptable to the Administrator, or (b) on a cashless basis under which shares of Stock otherwise deliverable under the Award and having a Fair Market Value equal to the exercise price are withheld by the Company, or (c) by such other means, if any, as may be acceptable to the Administrator, (d) following an IPO, subject to restrictions applicable to such Shares, by means of a broker assisted exercise program acceptable to the Administrator, or (e) by any combination of the foregoing permissible forms of payment. No Stock Option or portion thereof may be exercised unless, at the time of exercise, the Fair Market Value of the shares of Stock subject to such Stock Option or portion thereof exceeds the exercise price for the Stock Option or such portion.

(4) Maximum Term. The maximum term of each Stock Option shall be ten (10) years from the date of grant.

(5) ISOs. No ISO may be granted under the Plan after October 15, 2017, but ISOs previously granted may extend beyond that date.

(c) Lawful Consideration

Awards of Restricted Stock and Unrestricted Stock, whether delivered outright or under Awards of Stock Units, may be made in exchange for such lawful consideration, including services, as the Administrator determines.

7. EFFECT OF CERTAIN TRANSACTIONS

(a) Mergers, etc. Except as otherwise provided in an Award, the following provisions shall apply in the event of a Covered Transaction:

(1) Assumption or Substitution. If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may provide for the assumption of some or all outstanding Awards or for the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.

(2) Cash-Out of Awards. If the Covered Transaction is one in which holders of Stock will receive upon consummation a payment (whether cash, non-cash or a combination of the foregoing), the Administrator may provide for payment (a “cash-out”), with respect to some or all Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the excess, if any, of (A) the Fair Market Value of one share of Stock times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Award or such portion, in each case on such payment terms (which need not be the same as the terms of payment to holders of Stock) and other terms, and subject to such conditions, as the Administrator determines; provided, that the Administrator shall not exercise its discretion under this Section 7(a)(2) with respect to an Award or portion thereof providing for “nonqualified deferred compensation” subject to Section 409A in a manner that would constitute an extension or acceleration of, or other change in, payment terms if such change would be inconsistent with the applicable requirements of Section 409A.

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(3) Acceleration of Certain Awards. If the Covered Transaction (whether or not there is an acquiring or surviving entity) is one in which there is no assumption, substitution or cash-out, the Administrator may provide that each Award requiring exercise will become exercisable, and the delivery of any shares of Stock remaining deliverable under each outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated and such shares will be delivered, prior to the Covered Transaction, in each case on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction; provided, that to the extent acceleration pursuant to this Section 7(a)(3) of an Award subject to Section 409A would cause the Award to fail to satisfy the requirements of Section 409A, the Award shall not be accelerated and the Administrator in lieu thereof shall take such steps as are necessary to ensure that payment of the Award is made in a medium other than Stock and on terms that as nearly as possible, but taking into account adjustments required or permitted by this Section 7, replicate the prior terms of the Award.

(4) Termination of Awards Upon Consummation of Covered Transaction. Each Award will terminate upon consummation of the Covered Transaction, other than the following: (i) Awards assumed pursuant to Section 7(a)(1) above; (ii) Awards converted pursuant to the proviso in Section 7(a)(3) above into an ongoing right to receive payment other than Stock; and (iii) outstanding shares of Restricted Stock (which shall be treated in the same manner as other shares of Stock, subject to Section 7(a)(5) below).

(5) Additional Limitations. Any share of Stock and any cash or other property delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, consistent with Section 409A, as the Administrator deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction. In the case of Restricted Stock that does not vest in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

(b) In the event of a Change of Control (whether or not constituting a Covered Transaction), the Administrator shall provide, to the extent consistent with Section 409A, that any Award continued or assumed in such transaction, and any new award substituted for an Award that terminates in connection with such transaction, (any of the foregoing, a “Continuing Award”), to the extent not otherwise vested, shall be subject to the following special rule: To the extent the vesting of any Continuing Award depends on the continued Employment of the Participant and the Participant’s Employment is either (i) involuntarily terminated (other than for Cause) within one year following the Change of Control, or is (ii) voluntarily terminated by the Participant, within one year following the Change of Control, for Good Reason, any remaining Employment-related vesting conditions shall be treated as having been satisfied immediately prior to such termination. Nothing in this Section 7(b) shall be construed to affect any performance-based vesting condition to which a Participant’s Award may be subject.

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(c) Changes In, Distributions With Respect To And Redemptions Of The Stock

(1) Basic Adjustment Provisions. In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure, the Administrator shall make appropriate adjustments to the maximum number of shares specified in Section 4(a) that may be delivered under the Plan and shall also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change.

(2) Certain Other Adjustments. The Administrator may also make adjustments of the type described in Section 7(c)(1) above to take into account distributions to stockholders other than those provided for in Section 7(a) and 7(c)(1), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Awards made hereunder, subject to requirements for qualification, including continued qualification, of ISOs under Section 422 and to the requirements of Section 409A. Without limiting the generality of the foregoing, upon the occurrence of a cash distribution with respect to the Stock that constitutes a “corporate transaction” described at Treas. Regs. §1.424-1(a)(3)(ii) (an “extraordinary dividend”), as determined by the Administrator, the Administrator will cause the Company to take the following steps with respect to outstanding Stock Options:

(A) For each such Stock Option that immediately prior to the extraordinary dividend had a per-share exercise price less than the then per-share Fair Market Value of the Stock, reduce the per-share exercise price following the extraordinary dividend by an amount equal to the lesser of (i) the per-share extraordinary dividend, or (ii) the maximum reduction that can be made without jeopardizing the Stock Option’s status as an exempt stock right under Section 409A and without otherwise resulting in an acceleration of taxable income under the Stock Option, all as determined by the Administrator.

(B) For each Stock Option described in (A), the excess, if any, of (A)(i) over (A)(ii) above will be paid in cash to the Option Holder at the time of the extraordinary dividend or, if later, on the date on which the applicable portion of the Stock Option vests.

(C) For each outstanding Stock Option not described in (A), any adjustment or distribution will be left to the discretion of the Administrator.

(3) Continuing Application of Plan Terms. References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 7.

8. LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company shall use all commercially reasonable efforts to ensure, prior to delivering shares of Stock pursuant to the Plan or removing any restriction from shares of Stock previously

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delivered under the Plan, that (a) all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved, and (b) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance. The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until the conditions set forth in the preceding sentence have been satisfied and all other conditions of the Award have been satisfied or waived. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act. The Company may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.

9. AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so at the time of the Award. Any amendments to the Plan shall be conditioned upon stockholder approval only to the extent, if any, such approval is required by applicable law (including the Code), as determined by the Administrator.

10. OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not in any way affect the right of the Company or an Affiliate to Award a person bonuses or other compensation in addition to Awards under the Plan.

11. MISCELLANEOUS

(a) Waiver of Jury Trial. By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim shall be tried before a court and not before a jury. By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.

(b) Limitation of Liability. Notwithstanding anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf of the Company, any Affiliate, or the Administrator, shall be liable to any Participant or to the

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estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code; provided, that nothing in this Section 11(b) shall limit the ability of the Administrator or the Company to provide by separate express written agreement with a Participant for a gross-up payment or other payment in connection with any such tax or additional tax.

12. ESTABLISHMENT OF SUB-PLANS

The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Administrator’s discretion under the Plan as the Board deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction that is not affected.

13. GOVERNING LAW

Except as otherwise provided by the express terms of an Award Agreement or under a sub-plan described in Section 12, the provisions of the Plan and of Awards under the Plan shall be governed by and interpreted in accordance with the laws of the State of Delaware.

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EXHIBIT A

Definitions of Terms

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:

“Administrator”: The Board or, if one or more has been appointed, the Committee. The Administrator may delegate ministerial tasks to such persons as it deems appropriate. In the event of any such delegation, the term “Administrator” shall include the person or persons so delegated to the extent of such delegation.

“Affiliate”: Any corporation or other entity that is an “Affiliate” of the Company within the meaning of the Management Stockholders’ Agreement.

“Award”: Any or a combination of the following:

(i) Stock Options,

(ii) Restricted Stock,

(iii) Unrestricted Stock,

(iv) Stock Units, including Restricted Stock Units; and

(v) Performance Awards.

“Award Agreement”: A written agreement between the Company and the Participant evidencing the Award.

“Board”: The Board of Directors of Sierra Holdings Corp.

“Cause”: In the case of any Participant who is party to an employment or severance-benefit agreement that contains a definition of “Cause,” the definition set forth in such agreement shall apply with respect to such Participant under the Plan. In the case of any other Participant, “Cause” shall mean a material breach by the Participant of the Participant’s duties and responsibilities which is not promptly remedied after the Company gives the Participant written notice specifying such breach, or (ii) the commission by the Participant of a felony involving moral turpitude, or (iii) the commission by the Participant of theft, fraud, material breach of trust or any material act of dishonesty involving the Company or its subsidiaries, or (iv) a significant violation by the Participant of the code of conduct of the Company or its subsidiaries or of any statutory or common law duty of loyalty to the Company or its subsidiaries.

“Change of Control”: Acquisition by a person or group, that together with stock held by such person or group, constitutes “Control of Parent” as defined in the Management Stockholders’ Agreement.

“CEO”: The chief executive officer of the Company.

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“Closing Date”: “Closing Date” as that term is defined in the Management Stockholders’ Agreement.

“Code”: The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect. References to the Code shall include any regulations promulgated thereunder.

“Committee”: One or more committees of the Board.

“Company”: Sierra Holdings Corp.

“Covered Transaction”: Any of (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or liquidation of the Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction shall be deemed to have occurred upon consummation of the tender offer.

“Disability”: In the case of any Participant who is a party to an employment or severance-benefit agreement that contains a definition of “Disability,” the definition set forth in such agreement shall apply with respect to such Participant under the Plan. In the case of any other Participant, “Disability” shall mean a disability that would entitle a Participant to long-term disability benefits under the Company’s long-term disability plan to which the Participant participates. Notwithstanding the foregoing, in any case in which a benefit that constitutes or includes “nonqualified deferred compensation” subject to Section 409A would be payable by reason of Disability, the term “Disability” shall mean a disability described in Treas. Regs. Section 1.409A-3(i)(4)(i)(A).

“Employee”: Any person who is employed by the Company or an Affiliate.

“Employment”: A Participant’s employment or other service relationship with the Company and its Affiliates. Unless the Administrator provides otherwise: A Participant who receives an Award in his or her capacity as an Employee will be deemed to cease Employment when the employee-employer relationship with the Company and its Affiliates ceases. A Participant who receives an Award in any other capacity will be deemed to continue Employment so long as the Participant is providing services in a capacity described in Section 5. If a Participant’s relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant will be deemed to cease Employment when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates. In any case where a cessation of a Participant’s Employment would affect the Participant’s rights to payment under an Award that includes nonqualified deferred compensation subject to 409A, references to cessation of Employment shall be construed to require a “separation from service” as defined in Section 409A.

“Fair Market Value”: fair market value determined in accordance with Section 6(a)(2).

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“Good Reason”: Unless otherwise defined in an Award Agreement, any of the following events or conditions occurring without a Participant’s express written consent, unless cured by the Company within thirty (30) days of being notified by a Participant of the event or condition: (i) a material reduction in the Participant’s base compensation, (ii) a material diminution of a Participant’s position with the Company and its subsidiaries involving a substantial reduction in the scope, nature, and function of the Participant’s duties, which is typically demonstrated by a reduction in compensation and/or title, (iii) a change of thirty (30) miles or more in the Participant’s principal work location, or (iv) a material reduction in the employee benefits provided by the Company and its subsidiaries to the Participant, other than any such reduction that affects, or that is similar to a change in benefits that affects, one or more other, similarly situated employees of the Company and its subsidiaries.

“IPO”: The initial closing of a bona fide firm commitment underwritten public offering of equity shares of the Company, registered under the Securities Act of 1933, as amended, that results in such shares being traded on a liquid trading market.

“ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of Section 422 of the Code. Each option granted pursuant to the Plan will be treated as providing by its terms that it is to be a non-incentive stock option unless, as of the date of grant, it is expressly designated as an ISO.

“Management Stockholders’ Agreement”: Management Stockholders’ Agreement, dated as of October 26, 2007, among the Company and certain affiliates, stockholders and Participants.

“Participant”: A person who is granted an Award under the Plan.

“Performance Award”: An Award subject to Performance Criteria.

“Performance Criteria”: Specified criteria the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. If a Performance Award so provides, such criteria may be made subject to appropriate adjustments taking into account the effect of significant corporate transactions or similar events for the purpose of maintaining the probability that the specified criteria will be satisfied. Such adjustments shall be made only in the amount deemed reasonably necessary, after consultation with the Company’s accountants, and the CEO if required by the Award Agreement, to reflect accurately the direct and measurable effect of such event on such criteria, to the extent required by the Award Agreement.

“Plan”: The Sierra Holdings Corp. 2007 Equity Incentive Plan as from time to time amended and in effect.

“Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.

“Restricted Stock”: An Award of Stock for so long as the Stock remains subject to restrictions under this Plan or such Award requiring that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

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“Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.”

“Retirement”: Employment with the Company or any of its subsidiaries under any of the following circumstances or entitlements: (i) Service Pension under the Avaya Pension Plan for Salaried Employees as defined in that plan; (ii) after attainment of age fifty (50) and fifteen (15) years of service with the Company or any of its subsidiaries.

“Section 409A”: Section 409A of the Code.

“Section 422”: Section 422 of the Code.

“Stock”: Common Stock of the Company, par value $0.001 per share.

“Stock Option”: An option entitling the recipient to acquire shares of Stock upon payment of the exercise price.

“Unrestricted Stock”: An Award of Stock not subject to any restrictions under the Plan.

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EXHIBIT B

EXHIBIT C

[Time-based Option Agreement]

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EXHIBIT D

[MoM Performance-based Option Agreement]

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EXHIBIT E

[EBITDA Performance-based Option Agreement]

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CALIFORNIA SUPPLEMENT

Pursuant to Section 12 of the Plan, this supplement has been adopted for purposes of satisfying the requirements of Section 25102(o) of the California Corporations Code, to the extent applicable. This supplement may be amended by the Administrator without the approval of the Company, as necessary or desirable to comply with California law. Any Awards granted under the Plan to a Participant who is a resident of the State of California on the date of grant (a “California Participant”) shall be subject to the following additional limitations, terms and conditions, to the extent applicable:

1. Maximum Duration of Awards. No Award granted to a California Participant will be for a term in excess of 10 years.

2. Minimum Conversion Period Following Termination. Unless the employment of a California Participant holding an otherwise vested Stock Option is terminated for Cause, in the event of termination of employment of such Participant, he or she shall have the right to exercise the vested Stock Option as follows: (i) for a period of at least six months from the date of termination, if termination was caused by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code) and (ii) for a period of at least 30 days from the date of termination, if termination was caused other than by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code), but in no event later than the latest date on which such Participant could have exercised such Stock Option in the absence of a termination of employment.

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EX-10.3

Exhibit 10.3

[Recipient Name]

SIERRA HOLDINGS CORP.

AMENDED AND RESTATED

2007 EQUITY INCENTIVE PLAN

Restricted Stock Unit Award Agreement

Sierra Holdings Corp.

c/o Avaya Inc.

211 Mt. Airy Road

Basking Ridge, New Jersey 07920

Attn: Director, Executive Compensation and Benefits

Ladies and Gentlemen:

The undersigned (i) acknowledges that the undersigned has received an award (the “Award”) of restricted stock units (the “Units”) governed by the terms of the Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan (the “Plan”), subject to the terms set forth below and in the Plan, which is incorporated herein by reference; and (ii) agrees with Sierra Holdings Corp. (the “Company”) as follows:

1. Preliminary Matters. Not later than upon the execution of this Agreement and effective as of the date hereof, the undersigned has executed and become a party to the Management Stockholders’ Agreement, dated October 26, 2007 by and among the Company and certain stockholders of the Company (the “Stockholders’ Agreement”) [and the Senior Manager Registration and Preemptive Rights Agreement, dated October 26, 2007], by and among the Company and certain stockholders of the Company.

2. Effective Date. Subject to the undersigned’s execution of the documents referenced in Section 1 above, the grant date for the Award is [            ].

3. Shares Subject to Award. The Award consists of the right to receive, on the terms set forth herein and in the Plan and except as otherwise provided in Section 5 below, one share (a “Share”) of common stock, par value $.001 per share, of the Company (“Stock”) with respect to each Unit forming part of the Award. Subject to adjustment pursuant to Section 7 of the Plan, the Award covers [            ] Units.

4. Meaning of Certain Terms. Except as otherwise expressly provided, all terms used herein shall have the same meaning as in the Plan.

5. Delivery of Shares.

a. Vesting. The award shall vest and become non-forfeitable in full on [            ]; provided, however, that vesting shall accelerate upon the earlier occurrence of one of the events described in Section 5.b.i, iii, iv or v below. Notwithstanding the preceding sentence, in the event (i) the undersigned voluntarily terminates employment without Good Reason or (ii) the undersigned’s employment is terminated for Cause, any Units that are unvested as of the date of termination shall be forfeited and cancelled.

b. Distribution. With respect to each vested Unit and subject to adjustment pursuant to Section 7 of the Plan, the Company shall deliver one Share on, or within thirty (30) days before or after, the earliest of (i) an event that is both a “change in control event” (as defined in Treas. Reg. § 1.409A-3(i)(5)(i)) and a “change in control” in which the Company or its business is acquired that also constitutes a Transfer by the Majority Stockholders of Control of Parent (each such capitalized term as defined in the Management Stockholders’ Agreement) (such event, a “Change in Control”), (ii) [            ], (iii) the undersigned’s death or Disability, (iv) termination of the undersigned’s employment without Cause or (v) the undersigned’s voluntary termination of employment for Good Reason.

6. Effect of Covered Transaction. In the event a Covered Transaction that is not a Change in Control occurs prior to [            ], the Units, unless previously paid pursuant to Section 5 above, and unless assumed in the transaction, shall automatically be converted into the right to receive from the surviving or acquiring entity (or, if so arranged by the Administrator, from an affiliate thereof), on the same payment schedule as is specified in Section 5 above and otherwise subject to the terms and conditions of this Award, cash (or, in the Administrator’s discretion, securities or other property, including Stock) on a basis that in the Administrator’s judgment as closely as possible under the circumstances, and on a basis that complies with the requirements of Section 409A, effectuates the intent of the Award, adjusted in such manner as the Administrator shall have prescribed prior to the Covered Transaction for notional interest or other notional investment experience for the period between the Covered Transaction and payment.

7. Dividends, etc. If while the undersigned still holds the Award and prior to delivery of any Shares under the Award, the Company makes a dividend or other distribution with respect to the Stock, the undersigned shall be entitled, subject to withholding of tax by the Company pursuant to Section 8 below, to a payment in lieu of such dividend or other distribution (which in-lieu-of payment shall be in cash to the extent the dividend or other distribution was in cash, and otherwise in such form as the Administrator shall determine) equal on a per-Share amount to the per-Share amount of the dividend or other distribution paid by the Company with respect to one Share of outstanding Stock.

8. Certain Tax Matters. The undersigned expressly acknowledges that because the Award consists of an unfunded and unsecured promise by the Company to deliver Shares in the future, subject to the terms hereof, it is not possible to make a so-called “83(b) election” with respect to the Award. The undersigned also expressly acknowledges that the undersigned (i) is subject to FICA tax upon the distribution of the Units underlying the Award and will promptly pay to the Company, upon demand, the full amount of such tax unless the Company determines instead that it will withhold such tax from other payments owed to the undersigned, and (ii) will be subject to income tax and related withholding requirements with respect to the Award at such time as cash or property is delivered with respect to the Award (unless required to include amounts in income prior thereto by reason of Section 409A or otherwise). The undersigned agrees that the undersigned’s rights hereunder are subject to

the undersigned promptly paying to the Company in cash (or by such other means as may be acceptable to the Company in its discretion, including, as the Administrator so determines) all taxes required to be withheld in connection with the Award.

9. Governing Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

Very truly yours,

[Recipient’s Name]

Dated:                     , 20[    ]

The foregoing Restricted Stock Unit

Award Agreement is hereby accepted:

SIERRA HOLDINGS CORP.
By
	[            ]

EX-10.4

Exhibit 10.4

Type: Senior Vice President and Vice President Stock Option Award Agreement

Optionee Name: [    ]

Total Shares Subject to Stock Option Award: [    ]

    Time-Based Award (65% of total) with vesting set forth on Schedule A: [    ]

    Performance-Based Award (35% of total) with vesting set forth on Schedule B: [    ]

Exercise Price per Stock Option: [        ]

Date of Grant: [    ]

SIERRA HOLDINGS CORP.

AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN

STOCK OPTION AWARD AGREEMENT

THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS

OPTION ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER

AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH

IN THE MANAGEMENT STOCKHOLDERS’ AGREEMENT.

SIERRA HOLDINGS CORP. STRONGLY ENCOURAGES YOU TO SEEK THE

ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH

RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

SENIOR VICE PRESIDENT AND VICE PRESIDENT NONSTATUTORY OPTION AGREEMENT

This agreement (the “Agreement”) evidences a stock option granted by Sierra Holdings Corp. (the “Company”), to the undersigned (the “Optionee”), pursuant to, and subject to the terms of, the Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan (the “Plan”), which is incorporated herein by reference.

1. Grant of Option. This Agreement evidences the grant by the Company to the Optionee on the date of grant set forth above (“Date of Grant”) of an option (the “Option”) to purchase, in whole or in part, on the terms provided herein and in the Plan, the total number of shares of Stock (the “Shares”) having an exercise price equal to the Fair Market Value of the Stock on the Date of Grant, in each case as set forth in the table above and subject to adjustment pursuant to Section 7 of the Plan. The Option will vest in accordance with Section 3 below.

The Option evidenced by this Agreement is intended to be a nonstatutory option (that is, an option not described in subsection (b) of Code Section 422).

2. Meaning of Certain Terms. Except as otherwise defined herein, all capitalized terms used in this Agreement shall have the same meaning as in the Plan. The following terms shall have the following meanings:

(a) “Beneficiary” means, in the event of the Optionee’s death, the beneficiary, in order of succession:

(i) named in the written designation (in form acceptable to the Administrator) most recently filed with the Administrator by the Optionee prior to death and not subsequently revoked prior to the death of the Optionee, or

(ii) if there is no such designated beneficiary, the executive or administrator of the Optionee’s estate.

If any portion of the Option has been transferred to a Permitted Transferee who is a natural person, and such Permitted Transferee dies while such Option or transferred portion thereof is outstanding, the Option or portion thereof so transferred may thereafter be exercised, to the extent it remains exercisable and subject to such limitations as the Administrator may impose, by the person or persons to whom it passed from the Permitted Transferee according the applicable laws of descent and distribution.

(b) “Merger” has the same meaning as that term is defined in the Management Stockholders’ Agreement.

(c) “Option Holder” means the Optionee or, if as of the relevant time the Option has passed to a Beneficiary or Permitted Transferee, the Beneficiary or Permitted Transferee, as the case may be, who holds the Option pursuant to the terms of this Agreement.

(d) “Permitted Transferee” means a transferee of the Option pursuant to a transfer described at Section 6 below.

(e) “vest” means to become exercisable.

3. Vesting; Method of Exercise; Treatment of the Option Upon Cessation of Employment.

(a) Generally. The Option, or each portion thereof, as applicable, shall vest as set forth in the table above and in accordance with the terms of the applicable Schedule(s) attached hereto.

(b) Exercise of the Option. No portion of the Option may be exercised until such portion vests. Each election to exercise any vested portion of the Option shall be subject to the terms and conditions of the Plan and shall be in writing and signed by the Optionee or by the Beneficiary or Permitted Transferee to whom such portion of the Option has passed (or electronically transmitted, to the extent permitted by the Administrator), in each case subject to any restrictions provided under the Plan and the Management Stockholders’ Agreement. Each such exercise election must be received by the Company at its principal office and be accompanied by

Sierra Holdings Corp. – Proprietary and Confidential

payment in full as provided in the Plan. The purchase price may be paid (i) by cash or check acceptable to the Administrator, or (ii) on a cashless basis under which shares of Stock otherwise deliverable under the Option and having a Fair Market Value equal to the exercise price are withheld by the Company in accordance with the Plan, or (iii) by such other means, if any, as may be acceptable to the Administrator, or (iv) by any combination of the foregoing permissible forms of payment. In the event that the Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise the Option. The latest date on which the Option or any portion thereof may be exercised is the 10th anniversary of the Date of Grant, (the “Final Exercise Date”), and if not exercised by such date the Option or any remaining portion thereof will thereupon immediately terminate.

(c) Treatment of the Option Upon Cessation of Employment. If the Optionee’s Employment ceases, the Option to the extent not already vested will be immediately forfeited and any vested portion of the Option will be treated as follows:

(i) Subject to (ii), (iii), and (iv) below, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 30 days following cessation of Employment or (ii) the Final Exercise Date, and unless previously exercised will thereupon immediately terminate.

(ii) In the event of cessation of the Optionee’s Employment by reason of death, Disability, or Retirement, the Option, to the extent exercisable immediately prior to Optionee’s death, Disability, or Retirement, will remain exercisable until the earlier of (i) the first anniversary of the Optionee’s death, Disability, or Retirement, or (ii) the Final Exercise Date, and unless previously exercised will thereupon immediately terminate.

(iii) Except as otherwise set forth in any Schedule(s) to this Agreement, in the event of termination of the Optionee’s Employment by the Company without Cause or the Optionee’s voluntary termination of Employment for Good Reason, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and unless previously exercised will thereupon immediately terminate.

(iv) In the event of cessation of the Optionee’s Employment as a result of an act or failure to act constituting Cause, the Option will be treated as having terminated immediately prior to such cessation of Employment.

4. Share Restrictions, etc. Except as expressly provided herein, the Optionee’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Management Stockholders’ Agreement.

5. Legends, etc. Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Management Stockholders’ Agreement.

6. Transfer of Option. The Option may only be transferred to a legal representative in the event of the Optionee’s incapacity or to one or more transferees permitted under Section 6(a)(3) of the Plan.

7. Withholding. The exercise of the Option will give rise to “wages” subject to withholding. The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Optionee promptly paying to the Company in cash (or by such other means, including but not limited to the withholding of Shares that would otherwise be received upon exercise of the Option if deemed acceptable to the Administrator in its sole discretion, which Shares shall have a Fair Market Value equal to the minimum statutory tax withholding requirements) all taxes required to be withheld. In the event of an exercise of the Option, or a portion of the Option, in connection with a cessation of Employment as result of death, Disability, termination without Cause, or voluntary termination for Good Reason, the Optionee may elect to have shares of Stock held back by the Company in satisfaction of minimum statutory tax withholding requirements. The Optionee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Optionee and the Company may so withhold as provided in Section 3(b) above.

8. Effect on Employment. Neither the grant of the Option, nor the issuance of Shares upon exercise of the Option, shall give the Optionee any right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her Employment at any time.

9. Other Undertakings. By executing this Agreement, the Optionee also agrees to the terms and conditions set forth in Appendix I, which are incorporated herein by reference and shall survive any exercise, expiration, forfeiture or other termination of this Agreement or the Option issuable hereunder.

10. Governing Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

Acknowledgement

The Optionee confirms that he or she has been provided adequate opportunity to review the Option grant awarded to him or her under the Plan, including this Agreement and the Management Stockholders’ Agreement.

The Optionee understands that clicking the appropriate box, “Accept” for acceptance or “Reject” for rejection, indicates his or her irrevocable election to accept or reject, as applicable, the terms of the grant as set forth in this Agreement.

By acceptance of the Option, the Optionee agrees to become a party to (or remain, if the Optionee is already a party to), and be bound by the terms of, the Management Stockholders’ Agreement. The Optionee further acknowledges and agrees that (i) this is an electronic agreement, (ii) the signature to this Agreement on behalf of the Company is an electronic signature that will be treated as an original signature for all purposes hereunder and (iii) any such electronic signature shall be binding against the Company and shall create a legally binding agreement when this Agreement is accepted by the Optionee.

Agreed to as of the Date of Grant.

SIERRA HOLDINGS CORP.

Roger Gaston

Senior Vice President, Human Resources

Schedule A

Vesting Schedule for Time-Based Award

The Time-Based Award, unless earlier terminated, forfeited or expired, shall vest as follows:

a. 25% of the total number of Shares subject to the Time-Based Award, on each of the first, second, third, and fourth anniversaries of the Date of Grant, with the last such vesting date falling on the fourth anniversary of the Date of Grant.

b. In the event of a termination of the Optionee’s Employment as a result of death or disability, or by the Company without Cause, for the vesting year in which termination occurs, the Shares subject to the Time-Based Award that were scheduled to vest at the end of such vesting year will vest on a pro-rated basis as follows: one quarter of such Shares that otherwise would have vested at the end of the vesting year had the termination not occurred will vest for each partial or full quarter in which the Optionee was Employed during that vesting year. “Vesting year” means a twelve-month period beginning on the Date of Grant or an anniversary of the Date of Grant, as applicable, and ending on the first anniversary of such beginning date.

c. In the event of termination of the Optionee’s Employment as described in Section 3(c)(iii) of the Agreement, if such termination of Employment occurs within the one-year period following a Change of Control, unless the Time-Based Award shall have been terminated, exercised or exchanged for other current or deferred cash or property in connection with the Change of Control, the Time-Based Award, to the extent outstanding immediately prior to such termination of Employment, shall be treated for all purposes of this Agreement as having vested in full immediately prior to such termination of Employment.

Schedule B

Vesting Schedule for Performance-Based Award

Unless earlier terminated, forfeited or expired, the Performance-Based Award shall vest as follows:

a. 50% of the Shares subject to the Performance-Based Award will vest upon receipt by the Majority Stockholders of Cash Proceeds equal to 1.6 times Initial Investment Value and the balance (i.e. the remaining 50%) of the Shares subject to the Performance-Based Award will vest upon receipt by the Majority Stockholders of Cash Proceeds equal to 2 times Initial Investment Value.

d. In addition, following the fourth anniversary of the Closing Date, if the Stock is then traded on a national securities exchange, 50% of the Shares subject to the Performance-Based Award will vest if, in any full calendar quarter occurring thereafter (i) the Majority Stockholders have received Cash Proceeds of at least 0.8 times their Initial Investment Value and (ii) the combination of the average of the Trading Price of the Stock of any Initial Equity Investment held by the Majority Stockholders (such average Trading Price to be determined using an average of the Trading Price for each Trading Day occurring during such calendar quarter) together with Cash Proceeds received on or prior to such quarterly determination date equals or exceeds 1.6 times the Initial Investment Value. The balance (i.e. the remaining 50%) will vest if, following the fourth anniversary of the Closing Date, the Stock is then traded on a national securities exchange and, in any full calendar quarter occurring thereafter (i) the Majority Stockholders have received Cash Proceeds of at least their Initial Investment Value and (ii) the combination of the average of the Trading Price of the Stock of any Initial Equity Investment held by the Majority Stockholders (such average Trading Price to be determined using an average of the Trading Price for each Trading Day occurring during such calendar quarter) together with Cash Proceeds received on or prior to such quarterly determination date equals or exceeds 2 times the Initial Investment Value.

For purposes of this Schedule B, the following terms shall have the following meanings:

a. “Cash Proceeds” means, as of any determination date occurring after the Closing Date, the cumulative total of all cash, cash equivalents and Marketable Securities actually received by the Majority Stockholders after the Closing Date and on or before such determination date in respect of the Majority Stockholders’ Initial Equity Investment, excluding, for the avoidance of doubt, management, consulting, monitoring, advisory or similar fees paid to affiliates of the Majority Stockholders that are (i) contemplated by the Management Services Agreement dated October 2, 2007 by and among the Company, Sierra Merger Corp., TPG Capital, L.P., and Silver Lake Management Company III, L.L.C. or associated with

the termination of such agreement, (ii) customary for the services provided, or (iii) acceptable to the Administrator after consultation with the Chief Executive Officer.

e. “Initial Equity Investment” means the shares of Stock issued to the Majority Stockholders as of October 26, 2007, including any stock, securities or other property or interests received by the Majority Stockholders in respect of such shares in connection with any stock dividend or other similar distribution, stock split or combination of shares, recapitalization, conversion, reorganization, consolidation, split-up, spin-off, combination, repurchase, merger, exchange of stock or other transaction or event that affects the Company’s capital stock occurring after the date of issuance, but not including, for the avoidance of doubt, any stock or other securities issued to the Majority Stockholders or any of them in respect of any subsequent investment or capital contribution made by the Majority Stockholders or any of them.

f. “Initial Investment Value” means $1,500,000,000.00.

g. “Majority Stockholders” has the same meaning as the term is used in the Management Stockholders’ Agreement.

h. “Marketable Securities” means any equity security (other than Stock or any security issued by the Company in substitution or exchange for such Stock) that is both (i) of a class that includes equity securities that are listed on a national securities exchange and (ii) registered under the Securities Exchange Act of 1934, as amended, in each case as of the applicable determination date; provided, however, that Marketable Securities shall not include any such equity securities described above to the extent that, and only for so long as, the equity securities of such type or class received by the Majority Stockholders are subject to a contractual lock-up or similar agreement restricting transferability. In the event any equity securities are excluded from the definition of Marketable Securities pursuant to the immediately preceding proviso, the Administrator, after consultation with the Company’s Chief Executive Officer, will provide, in connection with the transaction giving rise to the receipt of such equity securities by the Majority Stockholders, for adjustments with respect to this Option as the Administrator, after consultation with the Chief Executive Officer, deems appropriate, including providing for substitute equity awards, a “cash out” payment (whether or not subject to restrictions) and any combination thereof, in each case, subject to substantially the same vesting conditions and other restrictions contained in this Option. For purposes of this Agreement, the value of the Marketable Securities on any “measurement date” (which shall be the date of initial receipt of Marketable Securities by the Majority Stockholders, the date any such contractual lockup or similar restriction expires or the last day of each calendar quarter beginning with the calendar quarter

within which the initial receipt of Marketable Securities by the Majority Stockholders occurred) shall be equal to the average of the Trading Price of such Marketable Securities over each of the 45 consecutive Trading Days immediately preceding (and including) such measurement date; provided, however, that the Administrator, after consultation with the Chief Executive Officer, shall be entitled to make equitable adjustments to such valuation methodology in the event of an extraordinary transaction occurring during any such 45 Trading Day period ending on such measurement date.

i. “Trading Day” means each business day during such calendar quarter in which the Trading Price of the Stock or Marketable Securities, as applicable, is reported by the principal securities exchange or, solely in the case of Stock, furnished by a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) selected by the Board or determined by the Board in good faith.

j. “Trading Price” means (i) the closing price on such day of a share of Stock or Marketable Securities, as applicable, as reported on the principal securities exchange on which shares of Stock or Marketable Securities, as applicable, are then listed or admitted to trade or (ii) if not so reported, as furnished by any member of FINRA selected by the Board. In the event that the price of a share of Stock is not so reported or furnished, the Trading Price will be determined by the Board in good faith.

APPENDIX I

Non-Disclosure, IP Assignment, Non-Solicitation and Non-Competition

By executing the Award Agreement, the Optionee acknowledges the importance to Avaya Inc. and its Affiliates, existing now or in the future (hereinafter referred to collectively as the “Company”) of protecting its confidential information and other legitimate business interests, including without limitation the valuable trade secrets and good will that it has developed or acquired. The Optionee further acknowledges that the Company is engaged in a highly competitive business, that its success in the marketplace depends upon the preservation of its confidential information and industry reputation, and that obtaining agreements such as this one from its employees is reasonable. The Optionee undertakes the obligations in this Appendix I in consideration of the Optionee’s initial and/or ongoing employment with the Company, the Optionee’s opportunity to receive an Award pursuant to the Sierra Holdings Corp. Amended and Restated 2007 Equity Incentive Plan, the Optionee’s being granted access to trade secrets and other confidential information of the Company, and for other good and valuable consideration, the receipt and sufficiency of which the Optionee acknowledges.

1. Loyalty and Conflicts of Interest

1.1. Exclusive Duty. During his or her employment, the Optionee will not engage in any other business activity except as permitted by the Company’s Code of Conduct.

1.2. Compliance with Company Policy. The Optionee will comply with all policies, practices and procedures of the Company which the Company conveys to the Optionee, as these may be implemented and/or changed by the Company from time to time. Without limiting the generality of the foregoing, the Optionee acknowledges that the Company may from time to time have agreements with other Persons which impose obligations or restrictions on the Company regarding Intellectual Property, as defined below, created during the course of work under such agreements and/or regarding the confidential nature of such work. The Optionee will comply with and be bound by all such obligations and restrictions which the Company conveys to him or her and will take all actions necessary (to the extent within his or her power and authority) to discharge the obligations of the Company under such agreements.

2. Confidentiality

2.1. Nondisclosure and Nonuse of Confidential Information. All Confidential Information, as defined below, which the Optionee creates or has access to as a result of his or her employment and other associations with the Company is and shall remain the sole and exclusive property of the Company. The Optionee will never, directly or indirectly, use or disclose any Confidential Information, except (a) as required for the proper performance of his or her regular duties for the Company, (b) as expressly authorized in writing in advance by the Company, (c) as required by applicable law or regulation, (d) to his or her attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring his or her investment in the Company (provided they agree not to disclose such Confidential Information to

others, except as authorized by this Section 2.1), (e) to any prospective purchaser of any shares from him or her (at a time when such transfer is permissible under the terms of the Management Stockholders’ Agreement and other applicable agreements), so long as such prospective purchaser agrees to be bound by the provisions of this Section 2.1 and to use such Confidential Information solely for purposes of evaluating a possible investment in the Company, or (f) as may be reasonably determined by the Optionee to be necessary in connection with the enforcement of his or her rights in connection with this Appendix I. This restriction shall continue to apply after the termination of the Optionee’s employment or this Appendix I, howsoever caused. The Optionee shall furnish prompt notice to the Company of any required disclosure of Confidential Information sought pursuant to subpoena, court order or any other legal process or requirement, and shall provide the Company a reasonable opportunity to seek protection of the Confidential Information prior to any such disclosure, to the greatest extent time and circumstances permit.

2.2. Use and Return of Documents. All documents, records and files, in any media of whatever kind and description, relating to the business, present or otherwise, of the Company and any copies (including without limitation electronic), in whole or in part, thereof (the “Documents” and each individually, a “Document”), whether or not prepared by the Optionee, shall be the sole and exclusive property of the Company. Except as required for the proper performance of the Optionee’s regular duties for the Company or as expressly authorized in writing in advance by the Company, the Optionee will not copy any Documents or remove any Documents or copies or derivatives thereof from the premises of the Company. The Optionee will safeguard, and return to the Company immediately upon termination of employment, and at such other times as may be specified by the Company, all Documents and other property of the Company, and all documents, records and files of its customers, subcontractors, vendors and suppliers (“Third-Party Documents” and each individually a “Third-Party Document”), as well as all other property of such customers, subcontractors, vendors and suppliers, then in the Optionee’s possession or control. Provided, however, if a Document or Third-Party Document is on electronic media, the Optionee may, in lieu of surrender of the Document or Third-Party Document, provide a copy on electronic media (e.g., a properly formatted diskette) to the Company and delete and overwrite all other electronic media copies thereof. Upon request of any duly authorized officer of the Company, the Optionee will disclose all passwords necessary or desirable to enable the Company to obtain access to the Documents and Third-Party Documents. Notwithstanding any provision of this Section 2.2 to the contrary, the Optionee shall be permitted to retain copies of all Documents evidencing his or her hire, equity and other compensation rate and benefits, this Appendix I, and any other agreements between the Optionee and the Company that the Optionee has signed.

3. Non-Competition and Other Restricted Activity

3.1. Non-Competition. During his or her employment the Optionee will not, directly or indirectly, compete with the Company, anywhere in the world, whether as an owner, partner, investor, consultant, employee or otherwise. Further, during the 12-month period immediately following the termination of the Optionee’s employment for any

reason, the Optionee will not work for or provide services to, in any capacity, whether as an employee, independent contractor or otherwise, whether with or without compensation, to any Material Competitor (as defined below). The foregoing shall not prevent: (i) passive ownership by the Optionee of no more than two percent (2%) of the equity securities of any publicly traded company; or (ii) the Optionee’s providing services to a division or subsidiary of a multi-division entity or holding company, so long as no division or subsidiary to which the Optionee provides services is a Material Competitor, and the Optionee does not otherwise engage in competition on behalf of the multi-division entity or any competing division or subsidiary thereof.

3.2. Good Will. Any and all good will which the Optionee develops during his or her employment with any of the customers, prospective customers, subcontractors or suppliers of the Company shall be the sole, exclusive and permanent property of the Company, and shall continue to be such after termination of the Optionee’s employment, howsoever caused.

3.3. Non-Solicitation of Customers. During his or her employment and during the 12-month period immediately following the termination of such employment for any reason, the Optionee will not, directly or indirectly, (a) solicit, encourage or induce any customer of the Company to terminate or diminish in any substantial respect its relationship with the Company; or (b) seek to persuade or induce any such customer or prospective customer of the Company to conduct with anyone else any substantial business or activity which such customer or prospective customer conducts or could conduct with the Company; provided that the restrictions in (a) and (b) shall apply (i) only with respect to those Persons who are or have been a customer of the Company at any time within the immediately preceding one-year period or whose business has been solicited on behalf of the Company by any of its officers, employees or agents within said one-year period, other than by form letter, blanket mailing or published advertisement, and (ii) only if the Optionee has performed work for such Person during his or her employment with the Company or has been introduced to, or otherwise had contact with, such Person as a result of his or her employment or other associations with the Company or has had access to Confidential Information which would assist in the solicitation of such Person. The foregoing restrictions shall not apply to general solicitation or advertising, including through media and trade publications.

3.4. Non-Solicitation/Non-Hiring of Employees and Independent Contractors. During his or her employment and for the 12-month period immediately following the termination of such employment for any reason, the Optionee will not, and will not assist anyone else to, (a) hire or solicit for hiring any employee of the Company or seek to persuade or induce any employee of the Company to discontinue employment with the Company, or (b) hire or engage any independent contractor providing services to the Company, or solicit, encourage or induce any independent contractor providing services to the Company to terminate or diminish in any substantial respect its relationship with the Company. For the purposes of this Appendix I, an “employee” or “independent contractor” of the Company is any person who is or was such at any time within the preceding six-month period. The foregoing restrictions shall not apply to general solicitation or advertising, including through media, trade publications and general job postings.

3.5. Notice of New Address and Employment. During the 12-month period immediately following the termination of his or her employment for any reason, the Optionee will provide the Company with pertinent information concerning each new job or other business activity in which the Optionee engages or plans to engage during such 12-month period as the Company may reasonably request in order to determine the Optionee’s continued compliance with his or her obligations under this Appendix I. The Optionee shall notify his or her new employer(s) of the Optionee’s obligations under this Appendix I, and hereby consents to notification by the Company to such employer(s) concerning his or her obligations under this Appendix I. The Company shall treat any such notice and information as confidential, and will not use or disclose the information contained therein except to enforce its rights hereunder.

3.6. Acknowledgement of Reasonableness; Remedies. In signing the Award Agreement, the Optionee gives the Company assurance that the Optionee has carefully read and considered all the terms and conditions hereof. The Optionee acknowledges without reservation that each of the restraints contained herein is necessary for the reasonable and proper protection of the good will, Confidential Information and other legitimate business interests of the Company, that each and every one of those restraints is reasonable in respect to subject matter, length of time and geographic area; and that these restraints will not prevent the Optionee from obtaining other suitable employment during the period in which he or she is bound by them. The Optionee will never assert, or permit to be asserted on the Optionee’s behalf, in any forum, any position contrary to the foregoing. Were the Optionee to breach any of the provisions of this Appendix I, the harm to the Company would be irreparable. Therefore, in the event of such a breach or threatened breach, the Company shall, in addition to any other remedies available to it, have the right to obtain preliminary and permanent injunctive relief against any such breach or threatened breach without having to post bond. Without limiting the generality of the foregoing, in the event of the Optionee’s breach of any of the provisions of this Appendix I, the Company shall have the immediate right to call and repurchase any shares of stock and any stock options that have been awarded to the Optionee by the Company other than Invested Equity (as defined in the Management Stockholders’ Agreement), at a purchase price that is the lesser of cost or fair market value, pursuant to the call procedures set forth in the Management Stockholders’ Agreement.

3.7. In the event that any provision of this Appendix I shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. The 12-month period of restriction set forth in Sections 3.1, 3.3 and 3.4 of this Appendix I shall be tolled, and shall not run, during any period of time in which the Optionee is in violation of the terms thereof, in order that the Company shall have the agreed-upon temporal protection recited herein.

3.8. Consent to Jurisdiction. In the event of any alleged breach of this Appendix I, the Optionee consents and submits to the jurisdiction of the federal and state courts in and of the State of New Jersey, and of the federal and state courts in and of the state in which the Optionee is then employed. The Optionee will accept service of process by registered or certified mail or the equivalent directed to his or her last known address on the books of the Company, or by whatever other means are permitted by such court.

3.9. Limited Exception for Attorneys. Insofar as the restrictions set forth in this Section 3 prohibit the solicitation, inducement or attempt to hire a licensed attorney who is employed at the Company, they shall not apply if the Optionee is a licensed attorney and the restrictions contained herein are illegal, unethical or unenforceable under the laws, rules and regulations of the jurisdiction in which the Optionee is licensed as an attorney.

4. Intellectual Property

4.1. In signing the Award Agreement, the Optionee hereby assigns and shall assign to the Company all of his or her right, title and interest in and to all inventions, discoveries, improvements, ideas, mask works, computer or other apparatus programs and related documentation, and other works of authorship (hereinafter each designated “Intellectual Property”), whether or not patentable, copyrightable or subject to other forms of protection, made, created, developed, written or conceived by the Optionee during the period of his or her employment, whether during or outside of regular working hours, either solely or jointly with another, in whole or in part, either: (a) in the course of such employment, (b) relating to the actual or anticipated business or research development of the Company, or (c) with the use of company time, material, private or proprietary information, or facilities.

4.2. The Optionee will, without charge to the Company, but at its expense, execute a specific assignment of title to the Company and do anything else reasonably necessary to enable the Company to secure a patent, copyright or other form of protection for said Intellectual Property anywhere in the world.

4.3. The Optionee acknowledges that the copyrights in Intellectual Property created with the scope of his or her employment belong to the Company by operation of law.

4.4. The Optionee has provided to the Administrator a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by the Optionee prior to his or her employment with the Company, which belong to the Optionee and which are not assigned to the Company hereunder (collectively referred to as “Prior Inventions”); and, if no such list is provided, the Optionee represents and warrants that there are no such Prior Inventions.

5. Definitions

Words or phrases which are initially capitalized or are within quotation marks shall have the meanings provided in this Section 5 and as provided elsewhere in this Appendix I. For purposes of this Appendix I, the following definitions apply:

“Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by management authority, contract or equity interest.

“Confidential Information” means any and all information of the Company, whether or not in writing, that is not generally known by others with whom the Company competes or does business, or with whom it plans to compete or do business, and any and all information, which, if disclosed, would assist in competition against the Company, including but not limited to (a) all proprietary information of the Company, including but not limited to the products and services, technical data, methods, processes, know-how, developments, inventions, and formulae of the Company, (b) the development, research, testing, marketing and financial activities and strategic plans of the Company, (c) the manner in which the Company operates, (d) its costs and sources of supply, (e) the identity and special needs of the customers, prospective customers and subcontractors of the Company, and (f) the people and organizations with whom the Company has business relationships and the substance of those relationships. Without limiting the generality of the foregoing, Confidential Information shall specifically include: (i) any and all product testing methodologies, product test results, research and development plans and initiatives, marketing research, plans and analyses, strategic business plans and budgets, and technology grids; (ii) any and all vendor, supplier and purchase records, including without limitation the identity of contacts at any vendor, any list of vendors or suppliers, any lists of purchase transactions and/or prices paid; and (iii) any and all customer lists and customer and sales records, including without limitation the identity of contacts at purchasers, any list of purchasers, and any list of sales transactions and/or prices charged by the Company. Confidential Information also includes any information that the Company may receive or has received from customers, subcontractors, suppliers or others, with any understanding, express or implied, that the information would not be disclosed. Notwithstanding the foregoing, Confidential Information does not include information that (A) is known or becomes known to the public in general (other than as a result of a breach of Section 2 hereof by the Optionee), (B) is or has been independently developed or conceived by the Optionee without use of the Company’s Confidential Information or (C) is or has been made known or disclosed to the Optionee by a third party without a breach of any obligation of confidentiality such third party may have to the Company of which the Optionee is aware.

“Material Competitor” means an entity, or a division or subsidiary of a multi-division entity or holding company, which engages in business in one or more of the fields in which the Company conducts business and from which the Company derives at least 10% of its annual gross revenues, as determined on the date of the Optionee’s termination of employment with the Company or an affiliate, as applicable.

“Person” means an individual, a corporation, a limited liability company, an association, a partnership, an estate, a trust and any other entity or organization, other than the Company.

6. Compliance with Other Agreements and Obligations

The Optionee represents and warrants that his or her employment by the Company and execution and performance of the Award Agreement, including this Appendix I, will not breach or be in conflict with any other agreement to which the Optionee is a party or is bound, and that the Optionee is not now subject to any covenants against competition or similar covenants or other obligations to third parties or to any court order, judgment or decree that would affect the performance of the Optionee’s obligations hereunder or the Optionee’s duties and responsibilities to the Company, except as disclosed in writing to the Company no later than the time an executed copy of the Award Agreement, including this Appendix I, is returned by the Optionee. The Optionee will not disclose to or use on behalf of the Company, or induce the Company to use, any proprietary information of any previous employer or other third party without that party’s consent.

7. Entire Agreement; Severability; Modification

With respect to the subject matter hereof, this Appendix I sets forth the entire agreement between the Optionee and the Company, and, except as otherwise expressly set forth herein, supersedes all prior and contemporaneous communications, agreements and understandings, written or oral, regarding the same. Provided, however, this Appendix I shall not terminate or supersede any obligations the Optionee may have pursuant to any other agreement or under applicable law with respect to confidentiality, non-competition, non-solicitation, assignment of rights to intellectual property or the like. Moreover, for the avoidance of doubt, nothing in this Agreement is intended or shall be construed to affect in any way rights and obligations arising pursuant to the Management Stockholders’ Agreement. In the event of conflict between this Appendix I and any prior agreement between the Optionee and the Company with respect to the subject matter hereof, this Appendix I shall govern. The provisions of this Appendix I are severable, and no breach of any provision of this Appendix I by the Company, or any other claimed breach of contract or violation of law, shall operate to excuse the Optionee’s obligation to fulfill the requirements of Sections 2, 3 and 4 hereof. No deletion, addition, marking, notation or other change to the body of this Appendix I shall be of any force or effect, and this Appendix I shall be interpreted as if such change had not been made. This Appendix I may not be modified or amended, and no breach shall be deemed to be waived, unless agreed to in writing by the Optionee and an expressly authorized officer of the Company. If any provision of this Appendix I should, for any reason, be held invalid or unenforceable in any respect, it shall not affect any other provisions, and shall be construed by limiting it so as to be enforceable to the maximum extent permissible by law. Provisions of this Appendix I shall survive any termination if so provided in this Appendix I or if necessary or desirable to accomplish the purpose of other surviving provisions. It is agreed and understood that no changes to the nature or scope of the Optionee’s employment relationship with the Company shall operate to extinguish the Optionee’s obligations hereunder or require that a new agreement concerning the subject matter of this Appendix I be executed.

8. Assignment

Neither the Company nor the Optionee may make any assignment of this Appendix I or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, the Company may assign its rights and obligations under this Appendix I without the Optionee’s consent (a) in the event that the Optionee is transferred to a position with one of the Company’s Affiliates or (b) in the event that the Company shall hereafter effect a reorganization, consolidate with, or merge into any Person or transfer to any Person all or substantially all of the business, properties or assets of the Company or any division or line of business of the Company with which the Optionee is at any time associated. This Appendix I shall inure to the benefit of and be binding upon the Optionee and the Company, and each of their respective successors, executors, administrators, heirs, representatives and permitted assigns.

9. At-Will Employment

This Appendix I does not in any way obligate the Company to retain the Optionee’s services for a fixed period or at a fixed level of compensation; nor does it in any way restrict the Optionee’s right or that of the Company to terminate the Optionee’s employment at any time, at will, with or without notice or cause.

10. Successors

The Optionee consents to be bound by the provisions of this Appendix I for the benefit of the Company, and any successor or permitted assign to whose employ the Optionee may be transferred, without the necessity that a new agreement concerning the subject matter or this Appendix I be re-signed at the time of such transfer.

11. Acknowledgement of Understanding

In signing the Award Agreement, the Optionee gives the Company assurance that the Optionee has read and understood all of its terms; that the Optionee has had a full and reasonable opportunity to consider its terms and to consult with any person of his or her choosing before signing; that the Optionee has not relied on any agreements or representations, express or implied, that are not set forth expressly in the Award Agreement, including this Appendix I; and that the Optionee has signed the Award Agreement knowingly and voluntarily.

LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP

TITLE DATE IDENTIFYING NUMBER OR BRIEF DESCRIPTION