Exhibit 10.11
EMPLOYMENT
AGREEMENT
This Agreement, dated as of May 23,
2005, is between JDS Uniphase Corporation, a Delaware corporation
(the “Company”) and John Peeler
(“Employee”).
PREMISES
WHEREFORE,
1. Employee will be employed by the
Company following the consummation of the merger between the
Company and Acterna, Inc. (the “Merger”);
and
2. Company and Employee wish to set
forth the terms governing their employment relationship with a
written Employment Agreement upon the terms herein provided
regarding Employee’s employment with Company.
AGREEMENT
NOW, THEREFORE, based on the
foregoing premises and in consideration of the commitments set
forth below, Employee and Company agree as follows:
As used herein, the following terms
are defined as follows:
a. “Cause” shall
mean:
(i) willful malfeasance by Employee,
which has a material adverse effect on the Company;
(ii) substantial and continuing
willful refusal by Employee to perform duties ordinarily performed
by an employee in the same position and having similar duties as
Employee;
(iii) conviction of Employee for a
felony or misdemeanor which would have a material adverse effect on
the Company’s goodwill if Employee is retained as an employee
of the Company; or
(iv) willful failure by Employee to
comply with material policies and procedures of the Company
including but not limited to the JDS Uniphase Corporation Code of
Business Conduct and Policy Regarding Inside Information and
Securities Transactions;
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b. “Change of Control”
shall mean the occurrence of one or more of the following with
respect to the Company:
(i) the acquisition by any person
(or related group of persons), whether by tender or exchange offer
made directly the Company’s stockholders, open market
purchases or any other transaction or series of transactions, of
Common Stock possessing sufficient voting power in the aggregate to
elect an absolute majority of the members of the Company’s
Board of Directors;
(ii) a merger or consolidation in
which the Company is not the surviving entity, except for a
transaction in which securities representing more than fifty
percent (50%) of the total combined voting power of the surviving
entity are held by persons who held Common Stock immediately prior
to such merger or consolidation and those members of the
Company’s Board of Directors immediately before such merger
or consolidation constitute a majority of the board of directors of
the surviving entity (or any parent corporation of the surviving
entity) immediately after such merger or consolidation;
(iii) any merger or consolidation in
which the Company is the surviving entity but in which either
securities representing more than fifty percent (50%) of the total
combined voting power of the Company’s outstanding securities
are transferred to holders different from those who held Common
Stock immediately prior to such merger or consolidation or those
members of the Company’s Board of Directors immediately
before such merger or consolidation do not constitute a majority of
the Company’s Board of Directors (or, if after such merger or
consolidation, the Company is a wholly owned subsidiary of another
corporation, then the board of directors of that corporation)
immediately after such merger; or
(iv) the sale, transfer or other
disposition of all or substantially all of the assets of the
Company.
c. “Closing Date” shall
mean the date of the first closing of the transactions constituting
a Change of Control.
d. “Common Stock” shall
mean $.001 par value, Common Stock of the Company.
e. “Disabled” shall mean
“disabled” as defined in section 409A(a)(2)(C) of the
Internal Revenue Code of 1986, as amended, and any regulations
thereunder (the “Code”).
f. “Good Reason” shall
mean:
(i) a material reduction in
Employee’s base salary or target bonus opportunity without
Employee’s prior written consent;
(ii) a material adverse change in
Employee’s position, duties or responsibilities without
Employee’s prior written consent. Further, for purposes of
this Section l.f.(ii) only, the occurrence of a Change of Control
shall not, in and of itself, constitute a material adverse change
in Employee’s position, duties or
responsibilities;
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(iii) an actual change in
Employee’s principal work location by more than 50 kilometers
without Employee’s prior written consent; or
(iv) failure by the Company to
obtain from any successor company the assumption of the
Company’s obligations under this Agreement.
g. “Termination Date”
means:
(i) in the event the Company
terminates the employment of Employee, the date designated by the
Company as the last day of Employee’s employment;
(ii) in the event the Employee
resigns his employment with the Company, the date designated by the
Company as the effective date of resignation;
(iii) in the event the Employee
dies, the date of death;
(iv) in the event the Employee
becomes Disabled, the date designated by the Company as the last
day of Employee’s employment.
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2.
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Position,
Duties, Responsibilities .
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a. Position . Employee is
employed by Company to render services to Company in the position
of Executive Vice President, Test & Measurement, Grade
E300.
b. Other Activities . Except
upon the prior written consent of the Company, Employee will not
(i) accept any other employment, or (ii) engage, directly or
indirectly, in any other business activity (whether or not pursued
for pecuniary advantage) that is or may be in conflict with, or
that might place Employee in a conflicting position to that of, the
Company; provided that nothing in this Section 2(b) shall prohibit
Employee from holding memberships on the board of directors of any
company that is not competitive with the Company or from
participating in charitable endeavors.
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3.
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Compensation, Equity .
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In consideration of the services to
be rendered under this Agreement, during the Term (as defined in
Section 4 below),
a. Salary . Company shall pay
Employee a base annual salary of $425,000, payable in accordance
with the Company’s payroll practices. Employee’s salary
will be reviewed from time to time in accordance with
Company’s established procedures for adjusting salaries for
similarly situated employees;
b. Incentive Plans . Employee
shall be entitled to participate in the Company’s established
incentive plan(s) for senior executives with a target bonus of 75%
of Employee’s base salary (the “Target Bonus”)
and a maximum bonus of up to 200% of Employee’s Target Bonus;
and
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c. Retention Bonus . Employee
shall be entitled to earn a Retention Bonus (the “Retention
Bonus”) of $455,000, payable in four equal installments of
$113,750, with Employee’s first paycheck on or after each of
January 1, 2006, July 2, 2006, January 1, 2007 and June
30, 2007 (each, an “Installment Date”). Except as
otherwise provided in Section 5 below, Employee will be eligible to
earn and receive Retention Bonus installments only if Employee
remains employed by the Company on the date each installment
becomes due.
d. Initial Option Grant .
Subject to the approval of the Company’s Board of Directors,
upon the first business day following the close of the Merger,
Employee will be granted an option (the “Initial
Option”) to purchase 1,000,000 shares of Common Stock. Such
Initial Option will have an exercise price equal to the closing
price of Common Stock on the NASDAQ on the date of the grant and
will vest and become exercisable over four years with 25% vesting
on the first anniversary of the date of grant and 6.25% vesting
every quarter thereafter. The Initial Option will be subject to the
terms and conditions of the Company’s 2003 Equity Incentive
Plan (the “EIP”) and standard form of Grant
Agreement.
e. Additional Stock Option
Grant . Subject to the approval of the Company’s Board of
the Company’s Board of Directors, on or before the first
anniversary of the Effective Date, Employee will be granted an
option (the “Additional Option”) to purchase at least
an additional 500,000 shares of Common Stock. Such option will have
an exercise price equal to the closing price of Common Stock on the
date of the grant and will vest and become exercisable over four
years with 25% vesting on the first anniversary of the date of
grant and 6.25% vesting every quarter thereafter. The Additional
Option will be subject to the terms and conditions of the
Company’s EIP and standard form of Grant Agreement. In
addition, Employee will be considered for additional grants of
options and equity awards on an annual basis after the first
anniversary of the Effective Date on the same terms and conditions
as other employees of the Company at the same or similar level, it
being understood that the grant of options under this Agreement are
not intended to be in lieu of future grants of options.
f. Initial Performance Units
Grant . Subject to the approval of the Company’s Board of
Directors, upon the first business day following the close of the
Merger, Employee will be awarded 275,000 performance units
(“Initial Performance Units”) under the Company’s
2003 EIP. Vesting of the Initial Performance Units shall be subject
to the achievement of performance targets to be established by the
Company and the Board of Directors and communicated to the Employee
prior to the Effective Date. The Initial Performance Units shall
also be subject to the terms and conditions of the EIP and standard
form of Award Agreement.
g. Changes in Capitalization of
the Company . In the event of any change in capitalization of
the Company as described in Section 10 of the EIP after the date of
this Agreement but before the issuance of any of the Initial
Options, the Additional Options or the Initial Performance Units,
the number of shares of Common Stock subject to such option and/or
the number of performance units, as applicable, will be adjusted as
described in Section 10 of the EIP as if such options and/or
performance units were outstanding award under the EIP as of the
date of such change in capitalization of the Company.
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g. Participation in Plans .
Employee shall be eligible to participate in Company’s
benefit plans and to receive prerequisites of employment as
established by Company for senior executives, and as may be amended
from time to time in Company’s sole discretion.
The term (the “Term”) of
this Agreement shall commence as of the Effective Date (as defined
in Section 16) and shall expire on the second anniversary of the
Effective Date unless sooner terminated as provided herein (the
initial date of termination of this Agreement, the “Initial
Expiration Date”). Notwithstanding the foregoing, on the
Initial Expiration Date, and upon the conclusion of each two-year
period thereafter (a “Renewal Date”), the Term
automatically will be extended for an additional two-year period,
provided that , the Employee’s then most recent
performance rating under the Company’s then existing
performance review procedure(s) is the equivalent of “Meets
Expectations” or better.
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5.
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Termination
Benefits Under Certain Circumstances .
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a. Certain Terminations Within 12
Months Following Effective Date and Prior to a Change of
Control . If, within twelve (12) months following the Effective
Date and before a Change of Control, the Employee’s
employment is terminated by the Company (other than for Cause),
conditioned upon the Employee’s executing and delivering to
the Company a release of claims in a form then generally being used
by the Company in similar circumstances, Employee will be entitled
to the following benefits in full satisfaction of any statutory,
contractual or common law entitlements which Employee has or could
have as a result of the termination of the Term:
(i) the Company shall pay to the
Employee, in one lump sum within 30 days following the Termination
Date, an amount equal to the sum of (x) twelve (12) months’
salary, at the Employee’s annual salary in effect as of
immediately prior to the Effective Date, and (y) a pro rata portion
of Employee’s Target Bonus in effect as of immediately prior
to the Effective Date, in each case, minus any required withholding
or deductions;
(ii) the Company shall pay to the
Employee, in one lump sum within 30 days following the Termination
Date, an amount equal to that portion of the Retention Bonus
otherwise payable on the next Installment Date following the date
of termination, minus any required withholdings or deductions;
and
(iii) should Employee elect COBRA
benefits continuation (or the functional equivalent of same in
non-United States jurisdictions) following termination of
employment the Company shall pay the full cost of such benefits
(either directly to the Employee or to the appropriate carrier or
administrator at the Company’s election) for the lesser of
(1) twelve (12) months, or (2) until such time as Employee becomes
eligible for health care benefits from a subsequent
employer.
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b. Certain Terminations After 12
Months Following Effective Date and Prior to a Change of
Control . If after twelve (12) months following the Effective
Date and before a Change of Control, the Employee’s
employment is terminated by the Company (other than for Cause),
conditioned upon the Employee’s executing and delivering to
the Company a release of claims in a form then generally being used
by the Company in similar circumstances, Employee will be entitled
to the following benefits in full satisfaction of any statutory,
contractual or common law entitlements which Employee has or could
have as a result of the termination of the Term:
(i) the Company shall pay to the
Employee, in one lump sum within 30 days following the Termination
Date, an amount equal to six (6) months’ salary, at the
Employee’s then current annual salary in effect, minus any
required withholdings or deductions;
(ii) the Company shall pay to the
Employee, in one lump sum within 30 days following the Termination
Date, an amount equal to that portion of the Retention Bonus
otherwise payable on the next Installment Date following the date
of termination, minus any required withholdings or deductions;
and
(iii) should Employee elect COBRA
benefits continuation (or the functional equivalent of same in
non-United States jurisdictions) following termination of
employment the Company shall pay the full cost of such benefits
(either directly to the Employee or to the appropriate carrier or
administrator at the Company’s election) for the lesser of
(1) twelve (12) months, or (2) until such time as Employee becomes
eligible for health care benefits from a subsequent
employer.
c. Certain Terminations Within 12
Months Following Effective Date and After a Change of Control .
If, within twelve (12) months following the Effective Date
and following a Change of Control, the Employee’s
employment is terminated (A) by the Company (other than for Cause),
or (B) by the Employee for Good Reason, conditioned upon the
Employee’s executing and delivering to the Company a release
of claims in a form then generally being used by the Company in
similar circumstances, Employee will be entitled to the following
benefits in full satisfaction of any statutory, contractual or
common law entitlements which Employee has or could have as a
result of the termination of the Term:
(i) the payments and benefits set
forth in Sections 5.a.i., 5.a.ii., and 5.a.iii. above, payable at
the time and in the manner set forth in such Sections;
and
(ii) Employee’s right, title
and entitlement to any unvested stock options or any other
securities or similar incentives which have been granted or issued
to Employee on or prior to the Termination Date, including but not
limited to the Initial Performance Unit Grant (collectively,
“Awards”), which would have vested during the period
commencing upon the Effective Date and continuing for a period of
twelve (12) months from the Termination Date, shall immediately
vest, free from any restrictions (other than those imposed by
applicable state and federal securities laws), and all such Awards
shall continue to be exercisable (if applicable) for 90 days from
the Termination Date or until the term such securities would have
otherwise expired (if applicable), whichever is earlier; provided
that if a longer exercise
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