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Avaya to Make Voluntary Contribution to Pension Plan

05-24-2004

Avaya said it would make a voluntary contribution of approximately $111 million of its common stock to its pension plan.

Avaya Inc., (NYSE:AV) a leading global provider of communications networks and services for businesses, today said it would make a voluntary contribution of approximately $111 million of its common stock to its pension plan.

Avaya will fund the contribution with a combination of approximately 2.4 million shares of treasury stock and a new issuance of common stock for the balance of the shares. The number of common shares Avaya will contribute will be based on the average of the opening and closing prices of Avaya common shares on the last full trading day preceding the closing of the contribution.

The contribution is conditioned upon the declaration of effectiveness by the Securities and Exchange Commission of a registration statement filed by the company earlier today registering the shares for resale by the pension plan. The company noted that as a result of a voluntary contribution it made to the pension plan in fiscal 2003, it was not required to make a contribution in fiscal 2004.

"The voluntary contribution continues our strategy of strengthening Avaya's financial position," said Garry K. McGuire, chief financial officer and senior vice president, corporate development, Avaya. "This action raises the plan funding to 96 percent of the plan's current liability and defers future required contributions until 2008 based on normal asset returns. It also enhances our financial flexibility to execute our long-term growth strategy."

About Avaya
Avaya Inc. designs, builds and manages communications networks for more than one million businesses worldwide, including over 90 percent of the FORTUNE 500®. Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services.

Driving the convergence of voice and data communications with business applications - and distinguished by comprehensive worldwide services - Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya Web site: http://www.avaya.com

This news release contains forward-looking statements regarding the company's view of the benefits of the contribution to the pension plan. This view is based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, general industry market conditions and growth rates and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations and the economic, political, and other risks associated with international sales and operations, U.S. and foreign government regulation, price and product competition, rapid technological development, dependence on new product development, the successful introduction of new products, the mix of our products and services, customer demand for our products and services, the ability to successfully integrate acquired companies, control of costs and expenses, the ability to implement in a timely manner our restructuring plans, and the ability to form and implement alliances. For a further list and description of such risks and uncertainties, see the reports filed by Avaya with the Securities and Exchange Commission. Avaya disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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