Exhibit 10.2
FINISAR CORPORATION
EXECUTIVE RETENTION AND SEVERANCE PLAN
AS AMENDED AND RESTATED EFFECTIVE JULY 15, 2018
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1.
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ESTABLISHMENT AND PURPOSE
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1.1
ESTABLISHMENT
. The Finisar Corporation Executive Retention and Severance Plan (the “PLAN”) was established by the Compensation Committee of the Board of Directors of Finisar Corporation, effective February 25, 2003 (the “EFFECTIVE DATE”). Most recently, the Plan was amended and restated effective July 15, 2018.
1.2
PURPOSE
. The Company draws upon the knowledge, experience and advice of its Officers and Key Employees in order to manage its business for the benefit of the Company’s stockholders. The Committee recognizes that, in particular, the possibility or pending occurrence of a Change in Control could lead to uncertainty regarding the consequences of such an event and could adversely affect the Company’s ability to attract, retain and motivate its Officers and Key Employees. The Committee has therefore determined that it is in the best interests of the Company and its stockholders to provide for the continued dedication of its Officers and Key Employees by establishing this Plan to provide designated Officers and Key Employees with enhanced financial security in the event of an involuntary termination of employment and, in particular, in connection with a Change in Control. The purpose of this Plan is to provide its Participants with specified compensation and benefits in the event of termination of employment under circumstances specified herein.
2.
DEFINITIONS AND CONSTRUCTION
2.1
DEFINITIONS
. Whenever used in this Plan, the following terms shall have the meanings set forth below:
(a)
“AVERAGE ANNUAL BONUS ATTAINMENT” means with respect to a Participant: (i) the sum of the actual annual cash bonus paid to such Participant with respect to the Company Group’s annual bonus program (i.e., “spot” or other special bonuses shall not be considered) during the two most recently completed annual bonus cycles prior to the Participant’s Termination Other Than Upon a Change in Control, divided by (ii) two (2); provided, that if a Participant has been employed by the Company Group for at least two (2) years as of the Participant’s Termination Other Than Upon a Change in Control but has only been employed for one (1) completed annual bonus cycle, such Participant’s Average Annual Bonus Attainment shall be the amount of such Participant’s actual annual cash bonus paid with respect to such completed annual bonus cycle.
(b)
“BASE SALARY MONTHLY RATE” means (i) a Participant’s monthly base salary rate in effect immediately prior to termination in the case of a Termination Other Than Upon a Change in Control or (ii) in the case of a Termination Upon a Change in Control, the greater of (1) the Participant’s monthly base salary rate in effect immediately prior to the Participant’s Termination Upon a Change in Control or (2) the Participant’s monthly base salary rate in effect immediately prior to the applicable Change in Control. For this purpose, base salary does not include any bonuses, commissions, fringe benefits, car allowances, other irregular payments or any other compensation except base salary.
(c)
“BOARD” means the Board of Directors of the Company.
(d)
“CAUSE” means the occurrence of any of the following, as determined in good faith by a vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with the Participant’s counsel, to be heard before the Board):
(1)
the Participant’s commission of any act of fraud, embezzlement or dishonesty;
(2)
the Participant’s unauthorized use or disclosure of confidential information or trade secrets of any member of the Company Group; or
(3)
the Participant’s intentional misconduct adversely affecting the business or affairs of any member of the Company Group.
(e)
“CHANGE IN CONTROL” means, except as otherwise provided in the Participation Agreement applicable to a given Participant, the occurrence of any of the following:
(1)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “EXCHANGE ACT”)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of (i) the outstanding shares of common stock of the Company or (ii) the total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of directors;
(2)
the Company is party to a merger, consolidation or similar corporate transaction, or series of related transactions, which results in the holders of the voting securities of the Company outstanding immediately prior to such transaction(s) failing to retain immediately after such transaction(s) direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the securities entitled to vote generally in the election of directors of the Company or the surviving entity outstanding immediately after such transaction(s);
(3)
the sale or disposition of all or substantially all of the Company’s assets or consummation of any transaction, or series of related transactions, having similar effect (other than a sale or disposition to one or more subsidiaries of the Company);
(4)
a change in the composition of the Board within any consecutive two-year period as a result of which fewer than a majority of the directors are Incumbent Directors; or
(5)
at any time prior to the first occurrence of any of the events described in (1) through (4) above only, and with respect to one or more Individual Deemed Change in Control Participants only, an Individual Deemed Change in Control applicable to such Participant.
(f)
“CHANGE IN CONTROL PERIOD” means a period commencing upon the date of the consummation of a Change in Control and ending on the date occurring eighteen (18) months thereafter. In the case of an Individual Deemed Change in Control, the Change of Control Period shall be deemed to exist only for the applicable Individual Deemed Change in Control Participant(s).
(g)
“CIC BENEFIT PERIOD” means (1) with respect to a Participant who is an Executive Officer, a period of twenty-four (24) months and (2) with respect to a Participant who is a Key Employee, a period of months determined by the Committee and set forth in the Participant’s Participation Agreement.
(h)
“COBRA” means the group health plan continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 and any applicable regulations promulgated thereunder.
(i)
“CODE” means the Internal Revenue Code of 1986, as amended, or any successor thereto and any applicable regulations promulgated thereunder.
(j)
“COMMITTEE” means the Compensation Committee of the Board.
(k)
“COMPANY” means Finisar Corporation, a Delaware corporation, and, following a Change in Control, a Successor that agrees to assume all of the terms and provisions of this Plan or a Successor which otherwise becomes bound by operation of law to this Plan. In the case of an Individual Deemed Change in Control, the applicable Successor shall be a Successor only with respect to any Individual Deemed Change in Control Participant subject to such Individual Deemed Change in Control.
(l)
“COMPANY GROUP” means the group consisting of the Company and each present or future parent and subsidiary corporation or other business entity thereof.
(m)
“DISABILITY” means a Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code.
(n)
“EXECUTIVE OFFICER” means an individual appointed by the Board as an executive officer of the Company and serving in such capacity upon becoming a Participant (unless then serving as a Key Employee) and, in the case of a Termination Upon a Change in Control, immediately prior to the consummation of a Change in Control.
(o)
“GOOD REASON” means the occurrence of any of the following conditions, without the Participant’s informed written consent, which condition(s) remain(s) in effect thirty (30) days after written notice to the Company from the Participant of such condition(s) delivered to the Company within ninety (90) days following the initial existence of such condition(s):
(1)
assignment of the Participant to a position that is not a Substantive Functional Equivalent of the position which the Participant occupied immediately prior to the Change in Control;
(2)
a material decrease in the Participant’s rate of base salary or a material decrease in the Participant’s target bonus amount (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned by the Participant);
(3)
any material failure by the Company Group to (i) continue to provide the Participant with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Company Group then held by the Participant, in any benefit or compensation plans and programs, including, but not limited to, the Company Group’s life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the Participant was participating immediately prior to the date of the Change in Control, or their equivalent, or (ii) provide the Participant with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Company Group then held by the Participant;
(4)
the relocation of the Participant’s work place for the Company Group to a location that increases the regular commute distance between the Participant’s residence and work place by more than fifty (50) miles (one-way), or the imposition of travel requirements substantially more demanding of the Participant than such travel requirements existing immediately prior to the Change in Control; or
(5)
any material breach of this Plan by the Company with respect to the Participant.
The existence of Good Reason shall not be affected by the Participant’s temporary incapacity due to physical or mental illness not constituting a Disability. The Participant’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any condition constituting Good Reason hereunder. For the purposes of any determination regarding the existence of Good Reason hereunder, any claim by the Participant that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board that Good Reason does not exist, and the Board, acting in good faith, affirms such determination by a vote of not less than two-thirds of its entire membership (excluding the Participant if the Participant is a member of the Board).
(p)
“INCUMBENT DIRECTOR” means a director who either (1) is a member of the Board as of the Effective Date, or (2) is elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but (3) was not elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of the Company.
(q)
“INDIVIDUAL DEEMED CHANGE IN CONTROL” means, solely with respect to a Participant whose then current job responsibilities are exclusively within a Company Group business or product area (e.g., the Company Group’s Wavelength Management area), the sale (through an asset sale, sale of subsidiary equity or otherwise) of such Company Group business or product area to a third party at any time prior to the first occurrence of any of the events described in subparagraphs (1) through (4) of the definition of Change in Control only, provided that such a transaction shall be considered an Individual Deemed Change in Control only if either (i) the employment of the Individual Deemed Change in Control Participant is terminated by the Company Group for any reason other than Cause on or immediately prior to the closing of such transaction and such Participant is not offered a position with the acquiring entity that is a Substantive Functional Equivalent of the position which the Participant occupied immediately prior to such transaction (in which case such termination of employment would be deemed a Termination Upon a Change in Control in connection with an Individual Deemed Change in Control hereunder), or (ii) the Individual Deemed Change in Control Participant continues employment with the acquiring entity after such transaction (in which case a termination of such Participant’s employment during the Change in Control Period applicable to such Participant either by the acquiring entity without Cause or by the Participant for Good Reason would be deemed a Termination Upon a Change in Control in connection with an Individual Deemed Change in Control).
(r)
“INDIVIDUAL DEEMED CHANGE IN CONTROL PARTICIPANT” means a Participant whose job responsibilities at the time of an applicable Individual Deemed Change in Control are exclusively within the Company Group business or product area (e.g., the Company Group’s Wavelength Management area) that is subject to such Individual Deemed Change in Control.
(s)
“KEY EMPLOYEE” means an individual employed by the Company Group, other than an Executive Officer, who has been designated by the Committee as eligible to participate in the Plan.
(t)
“NON-CIC BENEFIT PERIOD” means (i) with respect to a Participant who is an Executive Officer, a period of twelve (12) months and (i) with respect to a Participant who is a Key Employee, a period of months determined by the Committee and set forth in the Participant’s Participation Agreement.
(u)
“NON-CIC BONUS MULTIPLE” means (i) with respect to a Participant who is an Executive Officer, one (1.0) and (ii) with respect to a Participant who is a Key Employee, the multiple determined by the Committee and set forth in the Participant’s Participation Agreement.
(v)
“OPTION” means any option to purchase shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member, whether granted before or after a Change in Control, including any such option which is assumed by, or for which a replacement option is substituted by, the Successor or any other member of the Company Group in connection with the Change in Control.
(w)
“PARTICIPANT” means each Executive Officer and Key Employee designated by the Committee to participate in the Plan, provided such individual has executed a Participation Agreement.
(x)
“PARTICIPATION AGREEMENT” means an Agreement to Participate in the Finisar Corporation Executive Retention and Severance Plan in the form attached hereto as Exhibit A or in such other form as the Committee may approve from time to time; provided, however, that, after a Participation Agreement has been entered into between a Participant and the Company, it may be modified only by a supplemental written agreement executed by both the Participant and the Company. The terms of such forms of Participation Agreement need not be identical with respect to each Participant. For example, a Participation Agreement may limit the duration of a Participant’s participation in the Plan or may modify the definition of “Change in Control” with respect to a Participant, or, in the case of a Key Employee, may specify a CiC Benefit Period or Non-CiC Benefit Period that is not identical to the CiC Benefit Period or Non-CiC Benefit Period specified for other Participants.
(y)
“PRO RATA PORTION” means, with respect to any Option, Restricted Stock or other stock-based compensation award granted to a Participant and that is subject to time-based vesting only, that number of shares (rounded-up to the next whole share) that are unvested at the time of such Participant’s Termination Other Than Upon a Change in Control or Termination Upon a Change in Control in connection with an Individual Deemed Change in Control and would otherwise have vested if the Participant had remained employed by the Company Group for (i) a period of time equal to such Participant’s Non-CiC Benefit Period in the case of a Termination Other Than Upon a Change in Control or (ii) twelve (12) months in the case of a Termination Upon a Change in Control in connection with an Individual Deemed Change in Control following such Participant’s Termination Other Than Upon a Change in Control or Termination Upon a Change in Control in connection with an Individual Deemed Change in Control, as applicable, as calculated assuming that such award vested proportionally each day during the applicable vesting period (e.g., if a Participant had a Non-CiC Benefit Period of 12 months and was terminated on April 15, 2019 and held an award that vested with respect to 1,000 shares on each of June 15, 2019 and June 15, 2020, the Pro Rata Portion of such award would be 1,833 shares - 1,000 shares otherwise vesting on June 15, 2019 and 833 shares out of the 1,000 shares otherwise vesting on June 15, 2020 (i.e., 304/365ths of such 1,000 shares because the first anniversary of the April 15, 2019 termination is 304 days into the June 15, 2020 vesting year)). In no event will the aggregate number of shares vesting under an award exceed the maximum number of shares then remaining issuable under the award.
(z)
“RELEASE” means a general release of all known and unknown claims against the Company and its affiliates and their stockholders, directors, officers, employees, agents, successors and assigns substantially in the form attached hereto as Exhibit B (“General Release of Claims, Age 40 and Over”) or Exhibit C (“General Release of Claims, Under Age 40”), whichever is applicable, with any modifications thereto determined by legal counsel to the Company to be necessary or advisable to comply with applicable law or to accomplish the intent of Section 8 (Exclusive Remedy) hereof.
(aa)
“RESTRICTED STOCK” means any shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member or acquired upon the exercise of an Option, whether such shares are granted or acquired before or after a Change in Control, including any shares issued in exchange for any such shares by a Successor or any other member of the Company Group in connection with a Change in Control.
(bb)
“SUBSTANTIVE FUNCTIONAL EQUIVALENT” means an employment position occupied by a Participant after a Change in Control that:
(1)
is in a substantive area of competence (such as, accounting, executive management, finance, human resources, marketing, sales and service, or operations, etc.) that is consistent with the Participant’s experience and not materially different from the position occupied by the Participant immediately prior to the Change in Control;
(2)
allows the Participant to serve in a role and perform duties that are functionally equivalent to those performed immediately prior to the Change in Control (such as business unit executive with profit and loss responsibility, product line manager, marketing strategist, geographic sales manager, executive officer, etc.); and
(3)
does not otherwise constitute a material, adverse change in the Participant’s responsibilities or duties, as measured against the Participant’s responsibilities or duties prior to the Change in Control, causing it to be of materially lesser rank or responsibility within the Company or an equivalent business unit of its parent.
(cc)
“SUCCESSOR” means any successor in interest to substantially all of the business and/or assets of the Company or, with respect to an Individual Deemed Change in Control and any Individual Deemed Change in Control Participant subject to such Individual Deemed Change in Control, the successor in interest to substantially all of the business and/or assets of the Company Group business or product area subject to such Individual Deemed Change in Control.
(dd)
“TARGET ANNUAL BONUS PERCENTAGE” means a Participant’s target annual cash bonus amount expressed as a percentage of such Participant’s then current annual base salary rate (i) as most recently determined by the Committee or (ii) in the case of a Participant whose Target Annual Bonus Percentage is not subject to determination by the Committee, unless otherwise determined by resolution of the Committee with respect to that Participant, the lesser of (A) as most recently determined by the Chief Executive Officer of the Company or (B) 75%; provided, any reduction of a Participant’s target annual cash bonus amount expressed as a percentage of the Participant’s annual base salary rate following a Change in Control shall be ignored for purposes of the this definition.
(ee)
“TARGET ANNUAL BONUS AMOUNT” means an amount equal to (i)(A) a Participant’s Base Salary Monthly Rate multiplied by (B) twelve (12), multiplied by (ii) such Participant’s Target Annual Bonus Percentage.
(ff)
“TERMINATION UPON A CHANGE IN CONTROL” means the occurrence of any of the following events:
(4)
termination by the Company Group of the Participant’s employment for any reason other than Cause during a Change in Control Period applicable to such Participant; or
(5)
the Participant’s resignation for Good Reason from employment with the Company Group during a Change in Control Period applicable to such Participant, which resignation shall be deemed effective upon the expiration of the thirty (30) day cure period set forth in the definition of Good Reason above;
provided
,
however
, that Termination Upon a Change in Control shall not include any termination of the Participant’s employment which is (i) for Cause, (ii) a result of the Participant’s death or Disability, or (iii) a result of the Participant’s voluntary termination of employment other than for Good Reason.
(gg)
“TERMINATION OTHER THAN UPON A CHANGE IN CONTROL” means termination by the Company Group of the Participant’s employment for any reason other than Cause at any time on or after July 15, 2018 other than during a Change in Control Period applicable to such Participant whether before or after such a period;
provided
,
however
, that Termination Other Than Upon a Change in Control shall not include any termination of the Participant’s employment which is (i) for Cause, (ii) a result of the Participant’s death or Disability, or (iii) a result of the Participant’s voluntary termination of employment for any reason.
2.2
CONSTRUCTION
. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
3.
ELIGIBILITY AND PARTICIPATION
The Committee shall designate those Executive Officers and Key Employees who shall be eligible to become Participants in the Plan. To become a Participant, an Executive Officer or Key Employee must execute a Participation Agreement.
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4.
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TREATMENT OF EQUITY AWARDS UPON A CHANGE IN CONTROL
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4.1
OPTIONS AND RESTRICTED STOCK
. Notwithstanding any provision to the contrary contained in any plan or agreement evidencing an Option granted to a Participant, any Participant then employed by the Company Group shall be credited effective immediately prior to, but conditioned upon, the consummation of a Change in Control other than an Individual Deemed Change in Control and thereafter, for purposes of determining the extent of the vesting and exercisability of each outstanding Option then held by such Participant and the vesting of any shares of Restricted Stock acquired by the Participant upon the exercise of an Option, with one (1) additional year of employment or service with the Company Group. Furthermore, in the event of a Change in Control other than an Individual Deeme
d Change in Control in which the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “ACQUIROR”), does not assume the Company’s rights and obligations under the then-outstanding Options held by such Participant or substitute for such Options substantially equivalent options for the Acquiror’s stock, then the vesting and exercisability of each such Option shall be accelerated in full effective immediately prior to, but conditioned upon, the consummation of such Change in Control other than an Individual Deemed Change in Control.
4.2
OTHER EQUITY AWARDS
. Except as set forth in Section 4.1 above, the treatment of stock-based compensation upon the consummation of a Change in Control shall be determined in accordance with the terms of the plans or agreements providing for such awards.
5.
BENEFITS UPON TERMINATION UPON A CHANGE IN CONTROL OR UPON TERMINATION OTHER THAN UPON A CHANGE IN CONTROL
In the event of a Participant’s Termination Upon a Change in Control or Termination Other Than Upon a Change in Control, as applicable, the Participant shall be entitled to receive the applicable compensation and benefits described in this Section 5.
5.1
ACCRUED OBLIGATIONS
. The Participant shall be entitled to receive:
(a)
all salary, bonuses, commissions and accrued but unused vacation earned through the date of the Participant’s termination of employment;
(b)
reimbursement within thirty (30) business days of submission of proper expense reports of all expenses reasonably and necessarily incurred by the Participant in connection with the business of the Company Group prior to his or her termination of employment. The Participant must submit to the Company receipts and other details of each such expense in the form required by the Company within sixty (60) days after the later of (i) the Participant’s incurrence of such expense or (ii) the Participant’s receipt of the invoice for such expense. If such expense qualifies for reimbursement, then the Company shall reimburse the Participant for the expense within thirty (30) days thereafter. In no event will such expense be reimbursed after the close of the calendar year following the calendar year in which that expense is incurred. The amount of reimbursements to which the Participant may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year. The Participant’s right to reimbursement cannot be liquidated or exchanged for any other benefit or payment; and
(c)
the benefits, if any, under any Company Group retirement plan, nonqualified deferred compensation plan, stock purchase or other stock-based compensation plan or agreement (other than any such plan or agreement pertaining to Options, Restricted Stock or other stock-based compensation whose treatment is prescribed by Section 5.2(c) below), health benefits plan or other Company Group benefit plan to which the Participant may be entitled pursuant to the terms of such plans or agreements, subject to compliance with Code Section 409A.
5.2
SEVERANCE BENEFITS
. Provided that the Participant executes the Release applicable to such Participant within twenty-one (21) days (or forty-five (45) days if such longer period is required by applicable law) following the time of the Participant’s Termination Upon a Change in Control or Termination Other Than Upon a Change in Control, as applicable, and such Release becomes effective in accordance with its terms following any applicable revocation period, and subject to the provisions of Section 6, the Participant shall be entitled to receive the following severance payments and benefits:
(a)
CASH SEVERANCE PAYMENT
. Subject to Section 7, within sixty (60) days following the Participant’s Separation from Service, the Company shall pay to the Participant in a lump sum cash payment an amount equal to:
(1)
In the case of a Termination Upon a Change in Control other than in connection with an Individual Deemed Change in Control, (a) the product of (i) the Participant’s Base Salary Monthly Rate and (ii) the number of months in the CiC Benefit Period applicable to the Participant,
plus (b) the Participant’s Target Annual Bonus Amount;
(2)
In the case of a Termination Upon a Change in Control in connection with an Individual Deemed Change in Control:
(1)
the product of (A) the Participant’s Base Salary Monthly Rate and (B) twelve (12); plus
(3)
in the event that the Participant has been employed by the Company Group for at least two (2) years as of the date of the Participant’s Termination Upon a Change in Control in connection with an Individual Deemed Change in Control, the product of (A) the Participant’s Average Annual Bonus Attainment and (B) one (1); and
(4)
In the case of a Termination Other Than Upon a Change in Control:
(1)
the product of (a) the Participant’s Base Salary Monthly Rate and (b) the number of months in the Non-CiC Benefit Period; plus
(2)
in the event that the Participant has been employed by the Company Group for at least two (2) years as of the date of the Participant’s Termination Other Than Upon a Change in Control, the product of (a) the Participant’s Average Annual Bonus Attainment and (b) the Participant’s Non-CiC Bonus Multiple;
provided, however,
that if such sixty (60)-day period spans two taxable years, then the payment shall be made during the portion of that sixty (60)-day period that occurs during the second taxable year.
(b)
HEALTH AND LIFE INSURANCE BENEFITS
. For the period commencing immediately following the Participant’s termination of employment and continuing (i) in the case of a Termination Upon a Change in Control other than in connection with an Individual Deemed Change in Control, for the duration of the CiC Benefit Period applicable to the Participant, (ii) in the case of a Termination Upon a Change in Control in connection with an Individual Deemed Change in Control, for twelve (12) months, or (iii) in the case of a Termination Other Than Upon a Change In Control, for the duration of the Non-CiC Benefit Period applicable to the Participant the Company shall reimburse the Participant for the costs of obtaining health (including medical and dental) and life insurance benefits for the Participant and his or her dependents substantially similar to those provided to the Participant and his or her dependents immediately prior to the date of such termination of employment (without giving effect to any reduction in such benefits constituting Good Reason).
Such reimbursement with respect to health benefits shall be limited to that portion of the Participant’s premiums required under COBRA (or to be paid to any other provider of such health benefits following the termination of the COBRA period) that exceed the amount of premiums that the Participant would have been required to pay for continuing coverage had he or she continued in employment, and such reimbursement with respect to life insurance benefits shall be limited to that portion of the Participant’s premium that exceeds the premiums that the Participant would have had to pay for such coverage for the covered period had the Participant continued coverage under the Company’s life insurance plans. If the Participant and/or the Participant’s dependents become eligible to receive any such coverage under another employer’s benefit plans during the applicable CiC Benefit Period, 12-month period, or Non-CiC Benefit Period, the Participant shall report such eligibility to the Company, and the Company’s obligations under this subsection shall be secondary to the coverage provided by such other employer’s plans. For the balance of any period in excess of the applicable CiC Benefit Period, 12-month period, or Non-CiC Benefit Period during which the Participant is entitled to continuation coverage under COBRA, the Participant shall be entitled to maintain coverage for himself or herself and the Participant’s eligible dependents at the Participant’s own expense. The Participant must submit to the Company receipts and other details of each periodic premium payment in the form required by the Company within sixty (60) days after the payment date and the Company shall reimburse the Participant for that expense within thirty (30) days thereafter. In no event will such expense be reimbursed after the close of the calendar year
following the calendar year in which that expense is incurred. The amount of reimbursements to which a Participant may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year. The Participant’s right to reimbursement cannot be liquidated or exchanged for any other benefit or payment.
(c)
ACCELERATION OF VESTING OF OPTIONS, RESTRICTED STOCK AND OTHER STOCK-BASED COMPENSATION; EXTENSION OF OPTION EXERCISE PERIOD
. Notwithstanding any provision to the contrary contained in any agreement evidencing an Option, Restricted Stock or other stock-based compensation award granted to a Participant, the vesting and/or exercisability (1) of each of the Participant’s outstanding Options, Restricted Stock and other stock-based compensation awards that are subject only to time-based vesting shall be accelerated: (i) in full, in the case of a Termination Upon a Change In Control other than an Individual Deemed Change in Control, (ii) with respect to the applicable Pro Rata Portion, in the case of Termination Upon a Change in Control in connection with an Individual Deemed Change in Control, and (iii) with respect to the applicable Pro Rata Portion, in the case of Termination Other Than Upon a Change in Control; and (2) of each of the Participant’s outstanding Options, Restricted Stock and other stock-based compensation awards containing any performance target or goal for purposes of vesting and/or determination of the number of vested shares, shall be subject to such vesting and issuance acceleration provisions (if any) as applicable in the circumstances and as set forth in the applicable award agreement; provided, however, that such acceleration of vesting and/or exercisability shall not apply to any stock-based compensation award where such acceleration would result in plan disqualification or would otherwise be contrary to applicable law (e.g., an employee stock purchase plan intended to qualify under Section 423 of the Code). In each case, the accelerated vesting and exercisability provided in this paragraph will be effective as of the date of the Participant’s termination of employment so that each Option, share of Restricted Stock and other stock-based compensation award held by the Participant shall be immediately exercisable and/or vested as of such date as to the proportion set forth above. Furthermore, each such Option, to the extent unexercised on the date on which the Participant’s employment terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at any time prior to the later of the date specified in the agreement evidencing such Option or the expiration of one (1) year after the date on which the Participant’s employment terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the agreement evidencing such Option.
5.3 INDEMNIFICATION; INSURANCE.
(a) In addition to any rights a Participant may have under any indemnification agreement previously entered into between the Company and such Participant (a “PRIOR INDEMNITY AGREEMENT”), from and after the date of the Participant’s termination of employment, the Company shall indemnify and hold harmless the Participant against any costs or expenses (including attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, by reason of the fact that the Participant is or was a director, officer, employee or agent of the Company Group, or is or was serving at the request of the Company Group as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether asserted or claimed prior to, at or after the date of the Participant’s termination of employment, to the fullest extent permitted under applicable law, and the Company shall also advance fees and expenses (including attorneys’ fees) as incurred by the Participant to the fullest extent permitted under applicable law. In the event of a conflict between the provisions of a Prior Indemnity Agreement and the provisions of this Plan, the Participant may elect which provisions shall govern.
(b) For a period of six (6) years from and after the date of termination of employment of a Participant who was an officer and/or director of the Company at any time prior to such termination of employment, the Company shall maintain a policy of directors’ and officers’ liability insurance for the benefit of such Participant which provides him or her with coverage no less favorable than that provided for the Company’s continuing officers and directors.
6.
FEDERAL EXCISE TAX UNDER SECTION 4999 OF THE CODE
6.1
EXCESS PARACHUTE PAYMENT
. In the event that any payment or benefit received or to be received by the Participant pursuant to this Plan or otherwise (collectively, the “PAYMENTS”) would subject the Participant to any excise tax pursuant to Section 4999 of the Code (the “EXCISE TAX”) due to the characterization of such Payments as an excess parachute payment under Section 280G of the Code, then, notwithstanding the other provisions of this Plan, the amount of such Payments will not exceed the amount which produces the greatest after-tax benefit to the Participant. Should a reduction in benefits be required to satisfy the benefit limit of this Section 6.1, then the portion of any Payment otherwise payable in cash under Section 5.2(a) to the Participant shall be reduced first to the extent necessary to comply with such benefit limit. Should such benefit limit still be exceeded following such reduction, then the number of shares which would otherwise vest on an accelerated basis under each of the Participant’s options or other equity awards (based on the amount of the parachute payment attributable to each such option or equity award under Code Section 280G) shall be reduced to the extent necessary to eliminate such excess, with such reduction to be made in the same chronological order in which those awards were made.
6.2
DETERMINATION BY ACCOUNTANTS
. Upon the occurrence of any event (the “EVENT”) that would give rise to any Payments pursuant to this Plan, the Company shall promptly request a determination in writing by independent public accountants (the “ACCOUNTANTS”) selected by the Company and reasonably acceptable to the Participant of the amount and type of such Payments which would produce the greatest after-tax benefit to the Participant. For the purposes of such determination, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make their required determination. The Company shall bear all fees and expenses charged by the Accountants in connection with their services contemplated by this Section.
7.
SECTION 409A
7.1 This Plan is intended to comply with the requirements of Code Section 409A. Accordingly, all provisions herein shall be construed and interpreted to comply with Code Section 409A and if necessary, any such provision shall be deemed amended to the extent necessary to comply with Code Section 409A and the regulations thereunder.
7.2 Notwithstanding any provision to the contrary in this Plan, no payments or benefits to which any Participant becomes entitled under this Plan in connection with the termination of such Participant’s employment with the Company shall be made or paid to the Participant prior to the earlier of (i) the first day of the seventh (7th) month following the date of the Participant’s Separation from Service due to such termination of employment or (ii) the date of the Participant’s death, if the Participant is deemed, pursuant to the procedures established by the Compensation Committee in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all for all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A, to be a “specified employee” at the time of such Separation from Service and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.2 shall be paid in a lump sum to the Participant, and an
y remaining payments due under this Plan shall be paid in accordance with the normal payment dates specified for them herein.
7.3 The specified employees subject to such a delayed commencement date shall be identified as of December 31 of each calendar year. If a Participant is so identified as of any such December 31, he or she shall have specified employee status for the twelve (12)-month period beginning on April 1 of the following calendar year.
7.4 For purposes of this Plan, “Separation from Service” shall mean the date on which the level of the Participant’s bona fide services as an Employee (or non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services the Participant rendered as an Employee during the immediately preceding thirty-six (36) months (or any shorter period of such Employee service). Any such determination, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Code Section 409A. In addition to the foregoing, a Separation from Service will not be deemed to have occurred while the Participant is on a sick leave or other bona fide leave of absence if the period of such leave does not exceed six (6) months or any longer period for which the Participant’s right to reemployment with the Company is provided by either statute or contract; provided, however, that in the event of a leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and that causes the Participant to be unable to perform his duties as an Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29) months of such leave. If the period of the leave exceeds six (6) months (or twenty-nine (29) months in the event of disability as indicated above) and the Participant is not provided with a right to reemployment by either statute or contract, then the Participant will be deemed to have Separated from Service on the first day immediately following the expiration of the applicable six (6)-month or twenty-nine (29)-month period.
8.
CONFLICT IN BENEFITS; NONCUMULATION OF BENEFITS
8.1
EFFECT OF PLAN
. The terms of this Plan, when accepted by a Participant pursuant to an executed Participation Agreement, shall supersede all prior arrangements, whether written or oral, and understandings regarding the subject matter of this Plan and shall be the exclusive agreement for the determination of any payments and benefits due to the Participant upon the events described in Sections 4, 5 and 6.
8.2
NONCUMULATION OF BENEFITS
. Except as expressly provided in a written agreement between a Participant and the Company entered into after the date of such Participant’s Participation Agreement and which expressly disclaims this Section 8.2 and is approved by the Board or the Committee, the total amount of payments and benefits that may be received by the Participant as a result of the events described in Sections 4, 5 and 6 pursuant to (a) this Plan, (b) any agreement between the Participant and the Company or (c) any other plan, practice or statutory obligation of the Company, shall not exceed the amount of payments and benefits provided by this Plan upon such events (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), and the aggregate amounts payable under this Plan shall be reduced to the extent of any excess (but not below zero).
9.
EXCLUSIVE REMEDY
The payments and benefits provided by Section 5 and Section 6 (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), if applicable, shall constitute the Participant’s sole and exclusive remedy for any alleged injury or other damages arising out of the cessation of the employment relationship between the Participant and the Company in the event of the Participant’s Termination Other Than Upon a Change in Control or Termination Upon a Change in Control. The Participant shall be entitled to no other compensation, benefits, or other payments from the
Company as a result of any Termination Other Than Upon a Change in Control or Termination Upon a Change in Control with respect to which the payments and benefits described in Section 5 and Section 6 (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), if applicable, have been provided to the Participant, except as expressly set forth in this Plan or, subject to the provisions of Section 8.2, in a duly executed employment agreement between Company and the Participant.
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10.
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PROPRIETARY AND CONFIDENTIAL INFORMATION
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The Participant agrees to continue to abide by the terms and conditions of the confidentiality and/or proprietary rights agreement between the Participant and the Company or any other member of the Company Group.
If the Company performs its obligations to deliver the payments and benefits set forth in Section 5 and Section 6 (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), then for a period equal to (i) the CiC Benefit Period applicable to a Participant following a Termination Upon a Change in Control or (ii) the Non-CiC Benefit Period applicable to a Participant following a Termination Other Than Upon a Change in Control, the Participant shall not, directly or indirectly, recruit, solicit or invite the solicitation of any employees of the Company to terminate their employment relationship with the Company.
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12.
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NO CONTRACT OF EMPLOYMENT
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Neither the establishment of the Plan, nor any amendment thereto, nor the payment of any benefits shall be construed as giving any person the right to be retained by the Company, a Successor or any other member of the Company Group. Except as otherwise established in an employment agreement between the Company and a Participant, the employment relationship between the Participant and the Company is an “at-will” relationship. Accordingly, either the Participant or the Company may terminate the relationship at any time, with or without cause, and with or without notice except as otherwise provided by Section 15. In addition, nothing in this Plan shall in any manner obligate any Successor or other member of the Company Group to offer employment to any Participant or to continue the employment of any Participant which it does hire for any specific duration of time.
13.1
ERISA PLAN
. This Plan is intended to be (a) an employee welfare plan as defined in Section 3(1) of Employee Retirement Income Security Act of 1974 (“ERISA”) and (b) a “top-hat” plan maintained for the benefit of a select group of management or highly compensated employees of the Company Group.
13.2
APPLICATION FOR BENEFITS
. All applications for payments and/or benefits under the Plan (“BENEFITS”) shall be submitted to the Company’s General Counsel (the “CLAIMS ADMINISTRATOR”). Applications for Benefits must be in writing on forms acceptable to the Claims Administrator and must be signed by the Participant or beneficiary. The Claims Administrator reserves the right to require the Participant or beneficiary to furnish such other proof of the Participant’s expenses, including without limitation, receipts, canceled checks, bills, and invoices as may be required by the Claims Administrator.
13.3
APPEAL OF DENIAL OF CLAIM
.
(a)
If a claimant’s claim for Benefits is denied, the Claims Administrator shall provide notice to the claimant in writing of the denial within ninety (90) days after its submission. The notice shall be written in a manner calculated to be understood by the claimant and shall include:
(1)
The specific reason or reasons for the denial;
(2)
Specific references to the Plan provisions on which the denial is based;
(3)
A description of any additional material or information necessary for the applicant to perfect the claim and an explanation of why such material or information is necessary; and
(4)
An explanation of the Plan’s claims review procedures and a statement of claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination.
(b)
If special circumstances require an extension of time for processing the initial claim, a written notice of the extension and the reason therefor shall be furnished to the claimant before the end of the initial ninety (90) day period. In no event shall such extension exceed ninety (90) days.
(c)
If a claim for Benefits is denied, the claimant, at the claimant’s sole expense, may appeal the denial to the Committee (the “APPEALS ADMINISTRATOR”) within sixty (60) days of the receipt of written notice of the denial. In pursuing such appeal the applicant or his duly authorized representative:
(1)
may request in writing that the Appeals Administrator review the denial;
(2)
may review pertinent documents; and
(3)
may submit issues and comments in writing.
(d)
The decision on review shall be made within sixty (60) days of receipt of the request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the request for review. If such an extension of time is required, written notice of the extension shall be furnished to the claimant before the end of the original sixty (60) day period. The decision on review shall be made in writing, shall be written in a manner calculated to be understood by the claimant, and, if the decision on review is a denial of the claim for Benefits, shall include:
(1)
The specific reason or reasons for the denial;
(2)
Specific references to the Plan provisions on which the denial is based;
(3)
A description of any additional material or information necessary for the applicant to perfect the claim and an explanation of why such material or information is necessary; and
(4)
An explanation of the Plan’s claims review procedures and a statement of claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination.
14.
DISPUTE RESOLUTION
14.1
WAIVER OF JURY TRIAL
. In the event of any dispute or claim relating to or arising out of this Plan that is not resolved in accordance with procedure described in Section 13, the Company and the Participant, each by executing a Participation Agreement, agree that all such disputes or claims shall be resolved by means of a court trial conducted by the superior or district court in Santa Clara County, California or as otherwise required by ERISA. The Company and the Participant, each by executing a Participation Agreement, irrevocably waive their respective rights to have any such disputes or claims tried by a jury, and agree that such courts will have personal and subject matter jurisdiction over all such claims or disputes. Notwithstanding the foregoing, in the event of any such dispute, the Company and the Participant may agree to mediate or arbitrate the dispute on such terms and conditions as may they may agree in writing.
14.2
ATTORNEYS’ FEES
. The prevailing party shall be entitled to recover from the losing party its attorneys’ fees and costs incurred in any action brought to enforce any right arising out of this Plan.
15.
SUCCESSORS AND ASSIGNS
15.1
SUCCESSORS OF THE COMPANY
. The Company shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, expressly, absolutely and unconditionally to assume and agr
ee to perform this Plan on behalf of the Company in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. In the case of an Individual Deemed Change in Control, the Company shall require the acquiring entity in the applicable transaction to, expressly, absolutely and unconditionally to (i) assume and agree to perform this Plan on behalf of the Company with respect to the applicable Individual Deemed Change in Control Participant in the same manner and to the same extent that the Company would be required to perform it if the applicable Individual Deemed Change in Control Participant had remained an employee of the Company Group and (ii) assume the applicable Individual Deemed Change in Control Participant’s solely time-based equity incentives granted by the Company that are outstanding immediately prior to such transaction or provide a substitute award of substantially equivalent terms and value as such outstanding time-based equity incentives (i.e., remaining vesting schedule and current value as of the Individual Deemed Change in Control) provided that, if the acquiring entity refuses to so assume or provide any such substitute award for an outstanding time-based equity incentive, such unassumed or unsubstituted incentives will accelerate and be vested upon (or immediately prior to) such transaction with respect to the Pro Rata Portion applicable in the case of Termination Upon a Change in Control in connection with an Individual Deemed Change in Control. Upon any such assumption in connection with an Individual Deemed Change in Control, such assumed obligations and agreement shall be deemed a separate agreement between the applicable Participant and the applicable acquiring entity and such Participant shall thereafter cease to be a Participant under this Plan.
15.2
ACKNOWLEDGMENT BY COMPANY
. If, after a Change in Control, the Company fails to reasonably confirm that it has performed the obligation described in Section 15.1 within thirty (30) days after written notice from the Participant, such failure shall be a material breach of this Plan and shall entitle the Participant to resign for Good Reason and to receive the benefits provided under this Plan in the event of Termination Upon a Change in Control or a Termination Upon a Change in Control in connection with an Individual Deemed Change in Control, as applicable.
15.3
HEIRS AND REPRESENTATIVES OF PARTICIPANT
. This Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devises, legatees or other beneficiaries. If the Participant should die while any amount would still be payable to the Participant hereunder (other than amounts which, by their terms, terminate upon the death of the Participant) if the Participant had continued to live, then all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the executors, personal representatives or administrators of the Participant’s estate.
16.
NOTICES
16.1
GENERAL
. For purposes of this Plan, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States certified mail, return receipt requested, or by overnight courier, postage prepaid, as follows:
(a)
if to the Company:
Finisar Corporation
1389 Moffett Park Drive
Sunnyvale, California 94089
Attention: Chief Executive Officer
(b)
if to the Participant, at the home address which the Participant most recently communicated to the Company in writing.
Either party may provide the other with notices of change of address, which shall be effective upon receipt.
16.2
NOTICE OF TERMINATION
. Any termination by the Company of the Participant’s employment at any time or any resignation by the Participant shall be communicated by a notice of termination or resignation to the other party hereto given in accordance with Section 16.1. Such notice shall indicate the specific termination provision in this Plan relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date.
17.
TERMINATION AND AMENDMENT OF PLAN
This Plan and/or any Participation Agreement executed by a Participant may not be terminated with respect to such Participant without the written consent of the Participant and the approval of the Board or the Committee. The Plan and/or any Participation Agreement executed by a Participant may be modified, amended or superseded with respect to such Participant only by a supplemental written agreement between the Participant and the Company approved by the Board or the Committee.
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18.
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MISCELLANEOUS PROVISIONS
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18.1
UNFUNDED OBLIGATION
. Any amounts payable to Participants pursuant to the Plan are unfunded obligations. The Company shall not be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Board or the Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of the Company.
18.2
NO DUTY TO MITIGATE; OBLIGATIONS OF COMPANY
. A Participant shall not be required to mitigate the amount of any payment or benefit contemplated by this Plan by seeking employment with a new employer or otherwise, nor shall any such payment or benefit (except for benefits to the extent described in Section 5.2(b)) be reduced by any compensation or benefits that the Participant may receive from employment by another employer. Except as otherwise provided by this Plan, the obligations of the Company to make payments to the Participant and to make the arrangements provided for herein are absolute and unconditional and may not be reduced by any circumstances, including without limitation any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Participant or any third party at any time.
18.3
NO REPRESENTATIONS
. By executing a Participation Agreement, the Participant acknowledges that in becoming a Participant in the Plan, the Participant is not relying and has not relied on any promise, representation or statement made by or on behalf of the Company which is not set forth in this Plan.
18.4
WAIVER
. No waiver by the Participant or the Company of any breach of, or of any lack of compliance with, any condition or provision of this Plan by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
18.5
CHOICE OF LAW
. The validity, interpretation, construction and performance of this Plan shall be governed by the substantive laws of the State of California, without regard to its conflict of law provisions.
18.6
VALIDITY
. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect.
18.7
BENEFITS NOT ASSIGNABLE
. Except as otherwise provided herein or by law, no right or interest of any Participant under the Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including, without limitation, by execution, levy, garnishment, attachment, pledge or in any other manner, and no attempted transfer or assignment there
of shall be effective. No right or interest of any Participant under the Plan shall be liable for, or subject to, any obligation or liability of such Participant.
18.8
TAX WITHHOLDING
. All payments made pursuant to this Plan will be subject to withholding of applicable income and employment taxes.
18.9
CONSULTATION WITH LEGAL AND FINANCIAL ADVISORS
. By executing a Participation Agreement, the Participant acknowledges that this Plan confers significant legal rights, and may also involve the waiver of rights under other agreements; that the Company has encouraged the Participant to consult with the Participant’s personal legal and financial advisors; and that the Participant has had adequate time to consult with the Participant’s advisors before executing the Participation Agreement.
18.10
FURTHER ASSURANCES
. From time to time, at the Company’s request and without further consideration, the Participant shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of the Plan and the Participant’s Participation Agreement, Release and Restrictive Covenants Agreement, and to provide adequate assurance of the Participant’s due performance thereunder.
19.
AGREEMENT
By executing a Participation Agreement, the Participant acknowledges that the Participant has received a copy of this Plan and has read, understands and is familiar with the terms and provisions of this Plan. This Plan shall constitute an agreement between the Company and the Participant executing a Participation Agreement.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing Plan was duly adopted by the Committee effective July 15, 2018.
/s/ Chris Brown
EXHIBIT A
FORM OF
AGREEMENT TO PARTICIPATE IN THE
FINISAR CORPORATION
EXECUTIVE RETENTION AND SEVERANCE PLAN
PARTICIPATION AGREEMENT
FINISAR CORPORATION
EXECUTIVE RETENTION AND SEVERANCE PLAN
AS AMENDED AND RESTATED EFFECTIVE JULY 15, 2018
In consideration of the benefits provided by the Finisar Corporation Executive Retention and Severance Plan (as amended from time to time, the “PLAN”), the undersigned employee of Finisar Corporation (the “COMPANY”) and the Company agree that, as of the date written below, the undersigned shall become a Participant in the Plan and shall be fully bound by and subject to all of its provisions. All references to a “Participant” in the Plan shall be deemed to refer to the undersigned. This Participation Agreement supersedes and replaces any prior Participation Agreement with respect to the Plan between the Company and the undersigned.
The undersigned employee acknowledges that the Plan confers significant legal rights and may also constitute a waiver of rights under other agreements with the Company; that the Company has encouraged the undersigned to consult with the undersigned’s personal legal and financial advisors; and that the undersigned has had adequate time to consult with the undersigned’s advisors before executing this agreement.
The undersigned employee acknowledges that he or she has received a copy of the Plan and has read, understands and is familiar with the terms and provisions of the Plan. The undersigned employee further acknowledges that (1) the undersigned is waiving any right to a jury trial in the event of any dispute arising out of or related to the Plan and (2) except as otherwise established in an employment agreement between the Company and the undersigned, the employment relationship between the undersigned and the Company is an “at-will” relationship.
[SIGNATURE PAGE FOLLOWS]
Executed on __________________, ______
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PARTICIPANT
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FINISAR CORPORATION
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By:
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Signature
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Title:
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Name Printed
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Address
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[THE ABOVE SIGNED PARTICIPANT IS A “KEY EMPLOYEE” (AS DEFINED BY THE PLAN) AS OF THE DATE OF THIS AGREEMENT. IF THE PARTICIPANT REMAINS A KEY EMPLOYEE, BUT NOT AN “EXECUTIVE OFFICER,” FOR THE PURPOSE OF DETERMINING ANY SEVERANCE PAYMENTS OR BENEFITS TO WHICH THE PARTICIPANT MAY BECOME ENTITLED UNDER THE PLAN, THE FOLLOWING SHALL BE APPLICABLE TO THE PARTICIPANT UNDER THE PLAN:
CIC BENEFIT PERIOD: ___ MONTHS
NON-CIC BENEFIT PERIOD: ___ MONTHS
NON-CIC BONUS MULTIPLE: ___
]
EXHIBIT B
FORMS OF
GENERAL RELEASE OF CLAIMS
GENERAL RELEASE OF CLAIMS
[AGE 40 AND OVER]
This Agreement is by and between [EMPLOYEE NAME] (“Employee”) and [FINISAR CORPORATION OR SUCCESSOR THAT AGREES TO ASSUME THE EXECUTIVE RETENTION AND SEVERANCE PLAN FOLLOWING A CHANGE IN CONTROL] (the “Company”). This Agreement will become effective on the eighth (8th) day after it is signed by Employee (the “Effective Date”), provided that the Company has signed this Agreement and Employee has not revoked this Agreement (by written notice to [COMPANY CONTACT NAME] at the Company) prior to that date.
RECITALS
1.
Employee was employed by the Company as of , .
2.
Employee and the Company entered into an Agreement to Participate in the Finisar Corporation Executive Retention and Severance Plan (such agreement and plan, as ameded from time to time, being referred to collectively herein as the “Plan”) effective as of , wherein Employee is entitled to receive certain benefits in the event of a [Termination Other Than Upon a Change in Control OR Termination Upon a Change in Control] (as defined by the Plan), provided Employee signs and does not revoke a Release (as defined by the Plan).
3.
[IN CASE OF A CHANGE IN CONTROL: A Change in Control (as defined by the Plan) has occurred as a result of
[BRIEFLY DESCRIBE CHANGE IN CONTROL]
]
4.
Employee’s employment is being terminated as a result of a [Termination Other Than Upon a Change in Control OR Termination Upon a Change in Control]. Employee’s last day of work and termination are effective as of , . Employee desires to receive the payments and benefits provided by the Plan by executing this Release.
NOW, THEREFORE, the parties agree as follows:
Commencing on the Effective Date, the Company shall provide Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the Company’s obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued, unused vacation that Employee earned during his or her employment with the Company.
Employee and Employee’s successors release the Company, its respective subsidiaries, stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever directly related to Employee’s employment by the Company or the termination of such employment and occurring or existing at any time up to and including the Effective Date, including, but not limited to, any claims of breach of written contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress, or national origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to Section 5.2 of the Plan or pursuant to a Prior Indemnity Agreement (as such term is defined by the Plan) or any claim that cannot be so released as a matter of law. In addition, nothing in this Agreement prohibits Employee from filing a charge with or participating in an investigation conducted by any state or federal
government agencies. However, Employee does waive, to the maximum extent permitted by law, the right to receive any monetary or other recovery, should any agency or any other person pursue any claims on Employee’s behalf arising out of any claim released pursuant to this Agreement. For clarity, and as required by law, such waiver does not prevent Employee from accepting a whistleblower award from the Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934, as amended.
Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State of California, which states in full:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
Employee waives any rights that Employee has or may have under Section 1542 and comparable or similar provisions of the laws of other states in the United States to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all known and unknown claims that he or she has or may have against the parties listed above.
Employee and the Company acknowledge and agree that they shall continue to be bound by and comply with the terms and obligations under the following agreements: (i) any proprietary rights or confidentiality agreements between the Company and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee is a party, and (iv) any stock option, stock grant or stock purchase agreements between the Company and Employee.
This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives.
The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement shall be subject to the provisions of Section 13 and Section 14 of the Plan.
The parties agree that any and all disputes that (i) do not arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described shall be resolved by means of a court trial conducted by the superior or district court in Santa Clara County, California. The parties hereby irrevocably waive their respective rights to have any such disputes tried to a jury, and the parties hereby agree that such courts will have personal and subject matter jurisdiction over all such disputes. Notwithstanding the foregoing, in the event of any such dispute, the parties may agree to mediate or arbitrate the dispute on such terms and conditions as may be agreed in writing by the parties. The prevailing party shall be entitled to recover from the losing party its attorneys’ fees and costs incurred in any action brought to resolve any such dispute.
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral, with the exception of any agreements expressly referred to in this Agreement. This Agreement may not be modified or amended except by a document signed by an authorized officer of the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision
shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.
EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO 21 DAYS (OR SUCH LONGER PERIOD AS MAY BE REQUIRED TO MAKE THE RELEASE MAXIMALLY ENFORCEABLE UNDER APPLICABLE LAW) TO CONSIDER THIS AGREEMENT, THAT EMPLOYEE MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS AFTER EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED HEREIN.
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Dated:
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[Employee Name]
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[Company]
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Dated:
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By:
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EXHIBIT C
FORMS OF
GENERAL RELEASE OF CLAIMS
[Under Age 40]
GENERAL RELEASE OF CLAIMS
[UNDER AGE 40]
This Agreement is by and between [EMPLOYEE NAME] (“Employee”) and [FINISAR CORPORATION OR SUCCESSOR THAT AGREES TO ASSUME THE EXECUTIVE RETENTION AND SEVERANCE PLAN FOLLOWING A CHANGE IN CONTROL] (the “Company”). This Agreement is effective on the day it is signed by Employee (the “Effective Date”).
RECITALS
Employee was employed by the Company as of , .
5.
Employee and the Company entered into an Agreement to Participate in the Finisar Corporation Executive Retention and Severance Plan (such agreement and plan being referred to herein as the “Plan”) effective as of , wherein Employee is entitled to receive certain benefits in the event of a [Termination Other Than Upon a Change in Control OR Termination Upon a Change in Control] (as defined by the Plan), provided Employee signs a Release (as defined by the Plan).
6.
[IN CASE OF A CHANGE IN CONTROL: A Change in Control (as defined by the Plan) has occurred as a result of [BRIEFLY DESCRIBE CHANGE IN CONTROL]].
7.
Employee’s employment is being terminated as a result of a [Termination Other Than Upon a Change in Control OR Termination Upon a Change in Control]. Employee’s last day of work and termination are effective as of , (the “Termination Date”). Employee desires to receive the payments and benefits provided by the Plan by executing this Release.
NOW, THEREFORE, the parties agree as follows:
8.
Commencing on the Effective Date, the Company shall provide Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the Company’s obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued, unused vacation that Employee earned during his or her employment with the Company.
9.
Employee and Employee’s successors release the Company, its respective subsidiaries, stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever directly related to Employee’s employment by the Company or the termination of such employment and occurring or existing at any time up to and including the Termination Date, including, but not limited to, any claims of breach of written contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress, or national origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to Sections 5.4 of the Plan or pursuant to a Prior Indemnity Agreement (as such terms are defined by the Plan).
10.
Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State of California, which states in full:
A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.
Employee waives any rights that Employee has or may have under Section 1542 and comparable or similar provisions of the laws of other states in the United States to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all known and unknown claims that he or she has or may have against the parties listed above.
11.
Employee and the Company acknowledge and agree that they shall continue to be bound by and comply with the terms and his obligations under the following agreements: (i) any proprietary rights or confidentiality agreements between the Company and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee is a party, and (iv) any stock option, stock grant or stock purchase agreements between the Company and Employee.
12.
This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives.
13.
The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement shall be subject to the provisions of Section 12 and Section 13 of the Plan.
14.
The parties agree that any and all disputes that (i) do not arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described shall be resolved by means of a court trial conducted by the superior or district court in Santa Clara County, California. The parties hereby irrevocably waive their respective rights to have any such disputes tried to a jury, and the parties hereby agree that such courts will have personal and subject matter jurisdiction over all such disputes. Notwithstanding the foregoing, in the event of any such dispute, the parties may agree to mediate or arbitrate the dispute on such terms and conditions as may be agreed in writing by the parties. The prevailing party shall be entitled to recover from the losing party its attorneys’ fees and costs incurred in any action brought to resolve any such dispute.
15.
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral, with the exception of any agreements described in paragraph 4 of this Agreement. This Agreement may not be modified or amended except by a document signed by an authorized officer of the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.
EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.
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Dated:
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[Employee Name]
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[Company]
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Exhibit 10.3
Officer
FINISAR CORPORATION
RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
RECITALS
A.
The Board has adopted the Plan for the purpose of attracting and retaining the services of selected employees who provide services to a Participating Company.
B.
The Participant is to render valuable services to a Participating Company and the Board has approved the award of restricted stock units to the Participant pursuant to this Agreement.
C.
All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.
NOW, THEREFORE
, it is hereby agreed as follows:
1.
Grant of Restricted Stock Units
. The Company hereby awards to the Participant, as of the Award Date, an award (the “Award”) of restricted stock units under the Plan. Each restricted stock unit represents the right to receive one share of Common Stock on the vesting date of that unit. The number of shares of Common Stock subject to the awarded restricted stock units (the “Shares”) and the applicable vesting schedule for the restricted stock units and the underlying shares shall be as set forth in the “Restricted Stock: Vesting Details” linked to the restricted stock unit grant number for the Award in the Participant’s portfolio provided on the E-Trade Stock Plan Services website. The remaining terms and conditions governing the Award shall be as set forth in this Agreement.
2.
Issuance Dates
. Each Share in which the Participant vests in accordance with the specified vesting schedule shall be issued on the date (the “Issuance Date”) on which that Share so vests or as soon thereafter as administratively practicable, but in no event later than the close of the calendar year in which such vesting date occurs or (if later) the fifteenth day of the third calendar month following such vesting date. The issuance of the Shares shall be subject to the Company’s collection of any applicable Withholding Taxes in accordance the procedures set forth in Paragraph 7 of this Agreement.
3.
Limited Transferability
. Prior to actual receipt of the Shares which vest and become issuable hereunder, the Participant may not transfer any interest in the Award or the underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will or the laws of descent and distribution.
4.
Cessation of Service
. Should the Participant cease Service for any reason prior to vesting in one or more Shares subject to this Award, then the Award will be immediately cancelled with respect to those unvested Shares, and the number of restricted stock units will be reduced accordingly. The Participant shall thereupon cease to have any right or entitlement to receive any Shares under those cancelled units.
5.
Change in Control
.
(a)
Any restricted stock units subject to this Award at the time of a Change in Control may be assumed by the surviving, continuing, successor or purchasing corporation or parent thereof (the “Acquiring Corporation”) or substituted with a substantially equivalent award for the Acquiring Corporation’s stock. In the event the restricted stock units are not to be so assumed or substituted, then the Participant shall fully vest in the Award immediately prior to the effective date of the Change in Control.
The Shares subject to those vested units will be issued on the Issuance Date triggered by the Change in Control, subject to the Company’s collection of any applicable Withholding Taxes pursuant to the provisions of Paragraph 6 of this Agreement.
(b)
In the event this Award is assumed, the restricted stock units subject to the Award shall be adjusted immediately after the consummation of the Change in Control so as to apply to the number and class of securities into which the Shares subject to those units immediately prior to the Change in Control would have been converted in consummation of that Change in Control had those Shares actually been issued and outstanding at that time.
(c)
This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
6.
Adjustment in Shares
. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or other similar change in the capital structure of the Company, appropriate adjustments shall be made to the total number and/or class of securities issuable pursuant to this Award. The adjustments shall be made by the Board in such manner as the Board deems appropriate and such adjustments shall be final, binding and conclusive.
7.
Issuance of Shares of Common Stock
.
(a)
On the Issuance Date or as soon thereafter as practicable, the Company shall issue to or on behalf of the Participant a certificate (which may be in electronic form) for the number of shares of Common Stock underlying the restricted stock units which vest under the Award on such date, subject, however, to the Company’s collection of any applicable Withholding Taxes.
(b)
The Company shall collect any Withholding Taxes required to be withheld with respect to the issuance of the vested Shares hereunder through an automatic Share withholding procedure pursuant to which the Company will withhold, at the time of such issuance, a portion of the Shares with a Fair Market Value (measured as of the vesting date) equal to the amount of those taxes determined based on the Participant’s marginal tax rate (the “Share Withholding Method”).
(c)
Should any Shares be issued at a time when the Share Withholding Method is not available, then the Withholding Taxes shall be collected from the proceeds of a next-day sale of a portion of the Shares effected by the Company's designated broker; the Participant's acceptance of the Award shall constitute the Participant's authorization to the broker to effect such sale. This Agreement shall be deemed to be a 10b5-1 plan under the Exchange Act.
(d)
In no event will any fractional shares be issued.
(e)
The holder of this Award shall not have any stockholder rights, including voting or dividend rights, with respect to the Shares subject to the Award until the Participant becomes the record holder of those Shares following their actual issuance after the satisfaction of the applicable Withholding Taxes.
8.
Compliance with Laws and Regulations
.
(a)
The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Company and the Participant with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq Stock Market, if applicable) on which the Common Stock may be listed for trading at the time of such issuance.
(b)
The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance of any Common Stock hereby shall relieve the Company of any liability with respect to the non-issuance of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals.
9.
Successors and Assigns
. Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its
successors and assigns and the Participant, the Participant’s assigns, the legal representatives, heirs and legatees of the Participant’s estate and any beneficiaries of the Award designated by the Participant.
10.
Notices
. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company at its principal corporate offices. Any notice required to be given or delivered to the Participant shall be in writing and addressed to the Participant at the address indicated below Participant’s signature line on this Agreement. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
11.
Construction
. This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Board with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award.
12.
Governing Law
. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules.
13.
Employment at Will
. Except as may otherwise be set forth in the Participant’s employment agreement, nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent Corporation or Subsidiary Corporation employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate the Participant’s service at any time for any reason, with or without cause.
IN WITNESS WHEREOF
, the parties have executed this Agreement on the day and year first indicated above.
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FINISAR CORPORATION
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By:
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/s/ Kurt Adzema
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Title:
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Executive Vice President, Finance and Chief Financial Officer
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APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A.
Agreement
shall mean this Restricted Stock Unit Issuance Agreement.
B.
Award
shall mean the award of restricted stock units made to the Participant pursuant to the terms of the Agreement.
C.
Award Date
shall mean the date the restricted stock units are awarded to the Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.
D.
Board
shall mean the Company’s Board of Directors and any committee of the Board appointed to administer the Plan.
E.
Change in Control
shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, a
“
Transaction
”
) wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a sale, exchange or transfer of all or substantially all of the assets of the Company, the corporation or other business entity to which the assets of the Company were transferred (the
“
Transferee
”
), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which, as a result of the Transaction, own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.
F.
Code
shall mean the Internal Revenue Code of 1986, as amended.
G.
Common Stock
shall mean shares of the Company’s common stock.
H.
Company
shall mean Finisar Corporation, a Delaware corporation, and any successor corporation.
I.
Consultant
shall mean a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement under the Securities Exchange Act of 1934.
J.
Director
shall mean a member of the Board or of the board of directors of any other Participating Company.
K.
Employee
shall mean any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a Director nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan.
L.
Exchange Act
shall mean the Securities Exchange Act of 1934, as amended.
M.
Fair Market Value
per share of Common Stock, as of any date, shall mean the value of a share of Common Stock as determined by the Board, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:
(i)
If, on such date, the Common Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Common Stock shall be the closing price of a share of Common Stock (or the mean of the closing bid and asked prices of a share of Common Stock if the Common Stock is so quoted instead) as quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or such other national or regional securities exchange or market system constituting the primary market for the Common Stock, as reported in the
Wall Street Journal
or such other source as the Company deems reliable. If the relevant date does not fall on which the Common Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Common Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Board, in its discretion.
(ii)
If, on such date, the Common Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Common Stock shall be as determined by the Board in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse.
N.
Ownership Change Event
shall be deemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company.
O.
Parent Corporation
shall mean any present or future “parent corporation” of the Company as defined in Section 424(e) of the Code.
P.
Participant
shall mean the person to whom the Award is made pursuant to the Agreement.
Q.
Participating Company
shall mean the Company or any Parent Corporation or Subsidiary Corporation.
R.
Participating Company Group
shall mean, at any point in time, all corporations collectively which are then Participating Companies.
S.
Plan
shall mean the Company’s 2005 Stock Incentive Plan.
T.
Service
shall mean the Participant’s employment or service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. The Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders Service to the Participating Company Group or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, the Participant’s Service with the Participating Company Group shall not be deemed to have terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining the Participant’s vested Shares. The Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination.
U.
Subsidiary Corporation
shall mean any present or future “subsidiary corporation” of the Company as defined in Section 424(f) of the Code.
V.
Withholding Taxes
shall mean the Federal, state and local income and employment taxes required to be withheld by the Company in connection with the issuance of the shares of Common Stock under the Award.
Exhibit 10.4
FINISAR CORPORATION
OFFICER PERFORMANCE RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
RECITALS
A.
The Board has adopted the Plan for the purpose of attracting and retaining the services of selected employees who provide services to a Participating Company.
B.
The Participant is to render valuable services to a Participating Company and the Board has approved the award of performance restricted stock units to the Participant pursuant to this Agreement.
C.
All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.
NOW, THEREFORE
, it is hereby agreed as follows:
1.
Grant of Performance Restricted Stock Units
. The Company hereby awards to the Participant, as of the Award Date specified on Exhibit I attached hereto, an award (the “Award”) of restricted stock units under the Plan entitling the Participant to receive a number of shares of Common Stock (the “Shares”) based on the number of base shares designated for the Award on Exhibit I (the “Base Shares”) and the level of attainment of the Performance Goal for each Vesting Date as set forth on Exhibit I, subject to the Participant’s continued Service through each such Vesting Date. The number of Base Shares shall be used solely to calculate the actual number of Shares that may be issued to the Participant under this Agreement. In no event will the aggregate number of Shares issuable under the Award exceed the Maximum Shares set forth on Exhibit I. The remaining terms and conditions governing the Award shall be as set forth in this Agreement.
2.
Issuance Date
. Each Share in which the Participant vests in accordance with the specified vesting schedule on Schedule I or the accelerated vesting provisions of Paragraph 4(b) and 5(a) of this Agreement shall be issued on the date (the “Issuance Date”) on which that Share so vests or as soon thereafter as administratively practicable, but in no event later than the close of the calendar year in which such vesting date occurs or (if later) the fifteenth day of the third calendar month following such vesting date. The issuance of the Shares shall be subject to the Company’s collection of any applicable Withholding Taxes in accordance the procedures set forth in Paragraph 7 of this Agreement.
3.
Limited Transferability
. Prior to actual receipt of the Shares which vest and become issuable hereunder, the Participant may not transfer any interest in the Award or the underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will or the laws of descent and distribution.
4.
Cessation of Service
.
(a)
Except as otherwise provided in Paragraph 4(b) of this Agreement, should the Participant cease Service for any reason prior to completion of the Performance Period, then this Award will be immediately cancelled. The Participant shall thereupon cease to have any right or entitlement to receive any Shares under the cancelled Award.
(b)
In the event of the Participant’s Termination Other than Upon a Change in Control prior to completion of the Performance Period, this Award will vest on an accelerated basis with
respect to the number of Shares as determined pursuant to the formula specified in Paragraph 6 of Schedule I and shall terminate with respect to the remaining portion of the Award.
5.
Severance Plan Change in Control
.
(a)
In the event a Severance Plan Change in Control occurs prior to completion of the Performance Period and the Participant remains in Service through the effective date of that Severance Plan Change in Control, then the Participant shall, immediately prior to the effective date of the Severance Plan Change in Control, vest on an accelerated basis with respect to the number of Shares as determined pursuant to the formula specified in Paragraph 5 or 6 (as applicable) of Schedule I. The vested Shares will be issued pursuant to the provisions of Paragraph 2 of this Agreement.
(b)
Notwithstanding any provision of the Plan to the contrary, this Award to the extent not accelerated under Paragraph 5(a) of this Agreement, shall terminate immediately upon the Severance Plan Change in Control.
(c)
This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
6.
Adjustment in Shares
. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or other similar change in the capital structure of the Company, appropriate adjustments shall be made to the total number and/or class of securities issuable pursuant to this Award. The adjustments shall be made by the Board in such manner as the Board deems appropriate and such adjustments shall be final, binding and conclusive.
7.
Issuance of Shares of Common Stock
.
(a)
On the Issuance Date or as soon thereafter as practicable, the Company shall issue to or on behalf of the Participant a certificate (which may be in electronic form) for the number of shares of Common Stock which vest under the Award on such date, subject, however, to the Company’s collection of any applicable Withholding Taxes.
(b)
The Company shall collect any Withholding Taxes required to be withheld with respect to the issuance of the vested Shares hereunder through an automatic Share withholding procedure pursuant to which the Company will withhold, at the time of such issuance, a portion of the Shares with a Fair Market Value (measured as of the vesting date) equal to the amount of those taxes determined based on the Participant’s marginal tax rate (the “Share Withholding Method”).
(c)
Should any Shares be issued at a time when the Share Withholding Method is not available, then the Withholding Taxes shall be collected from the proceeds of a next-day sale of a portion of the Shares effected by the Company's designated broker; the Participant's acceptance of the Award shall constitute the Participant's authorization to the broker to effect such sale. This Agreement shall be deemed to be a 10b5-1 plan under the Exchange Act.
(d)
In no event will any fractional shares be issued.
(e)
The holder of this Award shall not have any stockholder rights, including voting or dividend rights, with respect to the Shares subject to the Award until the Participant becomes the record holder of those Shares following their actual issuance after the satisfaction of the applicable Withholding Taxes.
8.
Compliance with Laws and Regulations
.
(a)
The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Company and the Participant with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq Stock Market, if applicable) on which the Common Stock may be listed for trading at the time of such issuance.
(b)
The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance of any Common Stock hereby shall relieve the Company of any liability with respect to the non-issuance of the Common Stock as
to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals.
9.
Successors and Assigns
. Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and the Participant, the Participant’s assigns, the legal representatives, heirs and legatees of the Participant’s estate and any beneficiaries of the Award designated by the Participant.
10.
Notices
. Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company at its principal corporate offices. Any notice required to be given or delivered to the Participant shall be in writing and addressed to the Participant at the address indicated below Participant’s signature line on this Agreement. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
11.
Construction
. This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Board with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award.
12.
Governing Law
. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules.
13.
Employment at Will
. Except as may otherwise be set forth in the Participant’s employment agreement, nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent Corporation or Subsidiary Corporation employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate the Participant’s service at any time for any reason, with or without cause.
14.
Section 409A
. It is the intention of the parties that the provisions of this Agreement shall comply with the requirements of the short-term deferral exception to section 409A of the Code and Treasury Regulations Section 1.409A-1(b)(4). Accordingly, to the extent there is any ambiguity as to whether one or more provisions of this Agreement would otherwise contravene the requirements or limitations of section 409A of the Code applicable to such short-term deferral exception, then those provisions shall be interpreted and applied in a manner that does not result in a violation of the requirements or limitations of section 409A of the Code and the Treasury Regulations thereunder that apply to such exception. If, and only to the extent that, (i) the restricted stock units constitute “deferred compensation” within the meaning of section 409A of the Code and (ii) the Participant is deemed to be a “specified employee” (as such term is defined in section 409A of the Code and as determined by the Company), the payment of Shares on the Participant’s Termination Other Than Upon a Change in Control shall not be made until the first business day of the seventh month following the Participant’s termination or, if earlier, the date of the Participant’s death. For purposes of section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment. All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under section 409A of the Code, to the extent applicable. With respect to any payments that are subject to section 409A of the Code, in no event shall the Participant, directly or indirectly, designate the calendar year of payment.
IN WITNESS WHEREOF
, the parties have executed this Agreement on the day and year first indicated above.
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FINISAR CORPORATION
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By:
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/s/ Kurt Adzema
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Title:
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Executive Vice President, Finance and Chief Financial Officer
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PARTICIPANT
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By:
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_______________________________
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Name:
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_______________________________
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APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A.
Agreement
shall mean this Performance Restricted Stock Unit Issuance Agreement.
B.
Award
shall mean the award of restricted stock units made to the Participant pursuant to the terms of the Agreement.
C.
Award Date
shall mean the date the restricted stock units are awarded to the Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.
D.
Board
shall mean the Company’s Board of Directors and any committee of the Board appointed to administer the Plan.
E.
Code
shall mean the Internal Revenue Code of 1986, as amended.
F.
Common Stock
shall mean shares of the Company’s common stock.
G.
Company
shall mean Finisar Corporation, a Delaware corporation, and any successor corporation.
H.
Consultant
shall mean a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement under the Securities Exchange Act of 1934.
I.
Director
shall mean a member of the Board or of the board of directors of any other Participating Company.
J.
Employee
shall mean any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a Director nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan.
K.
Exchange Act
shall mean the Securities Exchange Act of 1934, as amended.
L.
Fair Market Value
per share of Common Stock, as of any date, shall mean the value of a share of Common Stock as determined by the Board, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:
(i)
If, on such date, the Common Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Common Stock shall be the closing price of a share of Common Stock (or the mean of the closing bid and asked prices of a share of Common Stock if the Common Stock is so quoted instead) as quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or such other national or regional securities exchange or market system constituting the primary market for the Common Stock, as reported in the
Wall Street Journal
or such other source as the Company deems reliable. If the relevant date does not fall on which the Common Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Common Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Board, in its discretion.
(ii)
If, on such date, the Common Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Common Stock shall be
as determined by the Board in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse.
M.
Individual Deemed Change in Control
shall mean an Individual Deemed Change in Control as defined in the Severance Plan.
N.
Parent Corporation
shall mean any present or future “parent corporation” of the Company as defined in Section 424(e) of the Code.
O.
Participant
shall mean the person to whom the Award is made pursuant to the Agreement.
P.
Participating Company
shall mean the Company or any Parent Corporation or Subsidiary Corporation.
Q.
Participating Company Group
shall mean, at any point in time, all corporations collectively which are then Participating Companies.
R.
Performance Goal
shall mean the performance goal specified on Exhibit I to the Agreement.
S.
Plan
shall mean the Company’s 2005 Stock Incentive Plan.
T.
Service
shall mean the Participant’s employment or service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. The Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders Service to the Participating Company Group or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, the Participant’s Service with the Participating Company Group shall not be deemed to have terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining the Participant’s vested Shares. The Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination.
U.
Severance Plan
shall mean the Finisar Executive Retention and Severance Plan, as amended and restated effective July 15, 2018 and as may be amended and/or restated thereafter.
V.
Severance Plan Change in Control
shall mean a Change in Control as defined in the Severance Plan.
W.
Subsidiary Corporation
shall mean any present or future “subsidiary corporation” of the Company as defined in Section 424(f) of the Code.
X.
Termination Other than Upon a Change in Control
shall have the meaning assigned to such term under the Severance Plan.
Y.
Withholding Taxes
shall mean the Federal, state and local income and employment taxes required to be withheld by the Company in connection with the issuance of the shares of Common Stock under the Award.
EXHIBIT I
DETERMINATION OF VESTED SHARES
PARTICIPANT:
BASE SHARES:
MAXIMUM SHARES:
AWARD DATE:
ISSUE DATE STOCK PRICE:
FIRST POTENTIAL VESTING DATE:
FINAL POTENTIAL VESTING DATE:
NON-CIC ACCELERATION QUARTERS:
Vesting
. The Shares under the Award shall vest on the Vesting Dates with annual and final true up determined as set forth below.
Definitions
. In addition to the terms listed above in this Exhibit I, the following definitions shall be in effect under this Exhibit I:
“
Performance Period
” shall mean the period commencing on the Award Date through and including the Final Potential Vesting Date.
“
Vesting Dates
” shall mean August 5, November 5, February 5 and May 5 of each year during the Performance Period with the first vesting date being the First Potential Vesting Date.
“
Vesting Date Stock Price
” for any Vesting Date shall mean the average of the closing prices per share of Common Stock for the last ten (10) trading days of the most recently completed Company fiscal quarter preceding the Vesting Date.
“
Vesting Factor
” shall mean, for any Vesting Date:
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(i)
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zero (0) if the Vesting Date Stock Price is less than 1.25 times (1.25x) the Issue Date Stock Price;
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(ii)
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one (1) if the Vesting Date Stock Price is equal to 1.25 times (1.25x) or greater but less than 1.5 times (1.5x) the Issue Date Stock Price;
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(iii)
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two (2) if the Vesting Date Stock Price is equal to 1.5 times (1.5x) or greater but less than 1.75 times (1.75x) the Issue Date Stock Price;
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(iv)
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three (3) if the Vesting Date Stock Price is equal to or greater than 1.75 times (1.75x) the Issue Date Stock Price;
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1.
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Quarterly Vesting
. On each Vesting Date, the Award will vest with respect to a number of Shares (if any) equal to: (i) 1/16
th
of the Base Shares multiplied by (ii) the Vesting Factor for such Vesting Date, rounded-up to the next whole Share.
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2.
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Annual True-Up
. On each of the 4
th
, 8
th
and 12
th
Vesting Dates, the Award shall vest with respect to an additional number of Shares equal to the excess (if any) of (i) the number of Shares with respect to which the Award would have vested if the Vesting Date Stock Price on the three (3) immediately prior Vesting Dates had been equal to the Vesting Date Stock Price on such 4
th
, 8
th
or 12
th
Vesting Date, over (ii) the number of Shares with respect to which the Award would actually vest as “Quarterly Vesting” under paragraph numbered 1 of this Exhibit I on such 4
th
, 8
th
or 12
th
Vesting Date plus the number of Shares with respect to which the Award actually vested on the three (3) immediately prior Vesting Dates.
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3.
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Final True-Up
. On the 16
th
Vesting Date, the Award will vest with respect to an additional number of Shares equal to the excess (if any) of (i) the number of Shares with respect to which the Award would have vested if the Vesting Date Stock Price on all of the prior 15 Vesting Dates had been equal to the Vesting Date Stock Price for the 16
th
Vesting Date, over (ii) the number of Shares with respect to which the Award would actually vest as “Quarterly Vesting” under Paragraph 1 of this Schedule I on such 16
th
Vesting Date actually plus the number of Shares with respect to which the Award actually vested on the 15 prior Vesting Dates.
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4.
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Maximum Shares Savings Clause
. In the event that any vesting of Shares (whether as Quarterly Vesting, Annual True-Up or Final True-Up) would cause the aggregate number of Shares vesting under the Award to exceed the Maximum Shares, then the number of Shares vesting shall be reduced to the extent necessary to eliminate any such excess.
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5.
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Acceleration Upon a Severance Plan Change in Control
. In the event a Severance Plan Change in Control (other than an Individual Deemed Change in Control) occurs during the Performance Period and the Participant remains in Service through the effective date of such Severance Plan Change in Control, the Award shall accelerate and vest immediately prior to the such Severance Plan Change in Control as to the aggregate number of Shares that would have vested under the Award (including any vesting that would have occurred pursuant to a true-up provision under the Award) on each of the remaining Vesting Dates during the Performance Period if the Participant had continued in Service on such Vesting Dates and assuming attainment of a Vesting Date Stock Price with respect to each such Vesting Date equal to the greater of (x) the average of the closing prices per share of Common Stock for the ten (10) trading days immediately prior to such Severance Plan Change in Control and (y) 1.25 times (1.25x) the Issue Date Stock Price. Any portion of the Award that is not vested after giving effect to such acceleration will terminate upon such Severance Plan Change in Control.
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6.
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Acceleration Upon an Individual Deemed Change in Control
. In the event an Individual Deemed Change in Control occurs with respect to the Participant during the Performance Period and the Participant remains in Service through the effective date of the Individual Deemed Change in Control, the Award shall accelerate and vest immediately prior to the Individual Deemed Change in Control as to the aggregate number of Shares that would have vested under the Award (including any vesting that would have occurred pursuant to a true-up provision under the Award) on the four (4) vesting dates of the Award immediately following the date of such Individual Deemed Changed in Control (or all remaining Vesting Dates in the event fewer such Vesting Dates remain with respect to the Award) if the Participant had continued in Service on such Vesting Dates and assuming attainment of a Vesting Date Stock Price with respect to each such Vesting Date equal to the greater of (x) the average of the closing prices per share of Common Stock for the ten (10) trading days immediately prior to the Individual Deemed Change in Control, and (y) 1.25 times (1.25x) the Issue Date Stock Price. Any portion of the Award that is not vested after giving effect to such acceleration will terminate upon the Individual Deemed Change in Control.
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7.
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Acceleration Upon a Termination Other than Upon a Change in Control
. In the event a Termination Other than Upon a Change in Control occurs during the Performance Period, the Award shall accelerate and vest immediately prior to the Termination Other than Upon a Change in Control as to the aggregate number of Shares that would have vested under the Award (including any vesting that would have occurred pursuant to a true-up provision under the Award) on the number of Vesting Dates equal to the Non-CIC Acceleration Quarters immediately following the date of Termination Other Than Upon a Change in Control (or all remaining Vesting Dates if fewer such Vesting Dates remain with respect to the Award) if the Participant had continued in Service on such Vesting Dates and assuming attainment of a Vesting Date Stock Price with respect to each such Vesting Date equal to the greater of (x) the average of the closing prices per share of Common Stock for the ten (10) trading days immediately prior to the Termination Other Than Upon a Change in Control, and (y) 1.25 times (1.25x) the Issue Date Stock Price. Any portion of the Award that is not vested after giving effect to such acceleration will terminate upon the Termination Other than Upon a Change in Control.
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