CONSULTING AGREEMENT BETWEEN
BOOKHAM, INC., AVANEX CORPORATION AND GIOVANNI
BARBAROSSA
This Consulting
Agreement (the “Agreement”), is entered into as of the
27 th
day of January, 2009, by and between
Bookham Incorporated, a Delaware corporation
(“Parent”), Avanex Corporation, a Delaware corporation
(the “Company), and Giovanni Barbarossa
(“Consultant”).
WHEREAS,
Consultant currently serves as the President and Chief Executive
Officer of the Company; and
WHEREAS, the
Company and Consultant have entered into a Change in Control
Agreement dated as of November 28, 2008 (the “Change in
Control Agreement”); and
WHEREAS, Parent
and the Company (and a wholly-owned subsidiary of Parent) have
entered into an Agreement and Plan of Merger and Reorganization
dated as of January 27, 2009 (the “Merger
Agreement”), pursuant to which the Company will become a
wholly-owned subsidiary of Parent; and
WHEREAS, effective
as of the Closing Date (as described in the Merger Agreement), the
parties hereto desire to terminate Consultant’s employment as
President and Chief Executive Officer of the Company, and as a
member of the Board of Directors of the Company; and
WHEREAS, effective
as of the Closing Date, Parent desires to retain Consultant as a
consultant and as a member of its Board of Directors, and
Consultant has agreed to accept such positions, on the terms and
conditions described herein.
NOW, THEREFORE, in
consideration of the covenants and conditions set forth herein and
for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows, effective as of the Closing
Date:
1.
Termination of Employment; Release .
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(a)
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Effective as of the Closing Date,
Consultant will resign from his position as President and Chief
Executive Officer of the Company and any of its subsidiaries. The
parties agree that, as of the Closing Date, all rights and
obligations of Consultant and the Company with respect to such
employment shall terminate, except for the continuing obligations
of both parties under this Agreement, the Change of Control
Agreement, the Release Agreement (as described below), or any plan,
program, policy, corporate governance document, agreement, award or
other arrangement of the Company or its affiliates (each, a
“Company Arrangement”).
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(b)
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As
of the Closing Date, all existing equity awards granted to
Consultant by the Company shall become fully vested, exercisable
and nonforfeitable, and will otherwise be treated no less favorably
than any other outstanding equity awards.
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(c)
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As
of the Closing Date, Company or Parent will pay Consultant all base
salary and any accrued but unused vacation in accordance with
Company policies based on Consultant’s employment up to and
including the Closing Date.
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(d)
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Contingent upon Consultant
(i) executing a Separation and Release Agreement (the
“Release Agreement”), in the form attached hereto as
Exhibit A, within thirty (30) days after the Closing Date, and
(ii) not revoking or challenging the enforceability of the
Release Agreement, Consultant shall be entitled to the payments and
benefits described in the Release Agreement (in addition to the
compensation provided hereunder).
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(e)
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Nothing in this Agreement or the
Release Agreement is intended to waive or release Consultant from
any and all obligations to Company or Parent under any
confidentiality, proprietary or non-disclosure agreement, or any
obligation created by statutory or common law to protect any
intellectual property or proprietary information of Company or
Parent.
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2.
Appointment as Consultant and Director .
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(a)
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Consultant agrees to serve as a
consultant to the Parent, and Parent agrees to so engage
Consultant, commencing as of the Closing Date and ending on the
twelve (12) month anniversary of the Closing Date, unless such
service is earlier terminated pursuant to Section 5 below (the
“Consulting Term”).
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(b)
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Parent shall also cause Consultant
to be appointed to the Board of Directors of Parent to serve as a
Class I director until the annual meeting of stockholders to
be held in 2011.
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3.
Consulting Services . As a consultant to Parent, Consultant
shall be available to the Chief Executive Officer of Parent to
provide general advice and assistance including integration,
strategic and technology related matters, customer visits and
customer relations and other similar services relating to
transition matters arising from the transactions described in the
Merger Agreement and requested by the Chief Executive Officer of
Parent. Consultant shall provide such services during normal
business hours, subject to Consultant’s reasonable
availability. The parties intend the Consultant’s termination
of employment from the Company to constitute a “termination
of employment” within the meaning of Treas. Reg.
Section 1.409A-1(h)(ii). The parties also expressly agree that
Consultant will be entitled to accept employment or other
consulting engagements during the Consulting Term, provided
(i) that such services are not provided to a person, company
or entity that provides products or services that compete with
products or services provided by the Parent, (ii) such other
consulting engagements or employment will not interfere with
Consultant providing his services to Parent on an as requested and
priority basis, and (iii) that such obligations do not otherwise
preclude the Consultant’s from complying with the provisions
of this Agreement.
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(a)
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Consulting Fees.
Parent will pay
Consultant a consulting fee at the rate of $30,000 per month, which
shall be paid no less frequently than on a monthly basis. For
Consultant’s service as a member of Parent’s Board of
Directors, Consultant will be provided compensation no less
favorable than compensation provided to other non-employee
directors.
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(b)
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Independent Contractor
. Consultant understands
and agrees that, during the Consulting Term, he will be an
independent contractor and he will not be considered an employee of
Parent or the Company. No Federal, state and local income taxes or
payroll taxes of any kind shall be withheld or paid by Parent on
Consultant’s behalf, and Consultant acknowledges that he
shall not be treated as an employee with respect to the consulting
services performed hereunder for Federal, State and local tax
purposes. Consultant agrees to pay, and be solely responsible for,
any applicable Federal, State and local taxes that are imposed on
him for the consulting fees provided hereunder.
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(c)
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Authority . Consultant understands and agrees
that he is not authorized to enter into any contracts or agreements
on behalf of Parent or the Company, or to otherwise create
obligations of the Parent or Company to third parties, unless
expressly authorized to do so by Parent or the Company.
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(d)
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Expenses. Parent shall reimburse Consultant
for the reasonable expenses actually incurred by him during the
Consulting Term in performing the consulting services described
hereunder, upon submission by him of sufficient substantiation of
such expenses, subject to the terms and conditions of
Company’s written policies with respect to expense
reimbursements (as provided in advance to Consultant). At the
expiration of the Consulting Term, Parent shall, upon the
presentation of an itemized invoice from an executive outplacement
firm, reimburse Consultant for costs incurred by Consultant in the
engagement of such outplacement firm used for a search for a new
position for Consultant as a Chief Executive Officer. To the extent
such payments constitute a taxable benefit or reimbursement that is
subject to Section 409A of the Internal Revenue Code
(“Section 409A”), they shall be paid or provided
in accordance with Section 409A, including but not limited to
the following provisions: (i) the amount of any such expense
reimbursement or in-kind benefit provided during the
Consultant’s taxable year shall not affect any expenses
eligible for reimbursement in any other taxable year; (ii) the
reimbursement of the eligible expense shall be made no later than
the last day of the Consultant’s taxable year that
immediately follows the taxable year in which the expense was
incurred; and (iii) the right to any reimbursement shall not
be subject to liquidation or exchange for another benefit or
payment.
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4. Attorney
Fees . Company shall pay directly all attorney fees and other
expenses of counsel that were reasonably incurred by Consultant in
connection with the negotiation and implementation of this
Agreement, promptly upon receipt of an itemized invoice for
same.
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(a)
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The
Consulting Term may be terminated by either Parent or Consultant at
any time upon thirty (30) days’ prior written notice to
the other, provided, however, that Consultant may not terminate the
Consulting Term before the sixth (6) month anniversary of the
Closing Date.
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(i)
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In
the event of either (x) a termination of the Consulting Term
by Parent for Cause (as described in paragraph (c) below) or
(y) a voluntary termination of the Consulting Term by
Consultant, the Parent will only pay the consulting fees earned by
the Consultant prior to the effective date of such a
termination.
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(ii)
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In
the event that the Consulting Term is terminated by Parent for any
reason other than Cause (or in the event of Consultant’s
death), Parent shall make a lump sum cash payment to Consultant
(or, in the event of his death, to his estate) in an amount equal
to the remaining consulting fees that would otherwise have been
payable through the end of the Consulting Term. Such payment shall
be made within thirty (30) days of the termination
date.
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