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This excerpt taken from the BKHM DEF 14A filed Sep 18, 2008. Employment,
Change of Control and Severance Arrangements
Each of Messrs. Haynes and Meldrum has an employment
agreement with Bookham Technology plc. These agreements describe
the individual’s salary, bonus and other benefits including
medical and life insurance coverage, car allowance, vacation and
sick days, and pension plan participation. The agreements also
contain a prohibition on the use or disclosure of our
confidential information, such as trade secrets, patents and
customer information, for non-business purposes. These
agreements contain a prohibition on being employed by or
otherwise involved with any of our competitors for a period of
six months after either has stopped working for us. Their
agreements also contain a non-competition clause prohibiting
each from dealing with our customers or prospective customers,
and a
non-solicitation
clause prohibiting each from dealing with certain of our
suppliers, prospective suppliers, senior executives,
salespersons and other key employees, for a period of twelve
months after each has stopped working for us.
In July 2007, we entered into an employment agreement with Alain
Couder with respect to his employment as our President and Chief
Executive Officer. The employment agreement provides that
Mr. Couder will be entitled to receive an initial base
salary at an annualized rate of $500,000 and will be eligible
for a yearly bonus of up to 100% of his base salary, subject to
achievement of individual and company performance targets.
Pursuant to the employment agreement Mr. Couder was to
receive a grant of options and restricted stock.
Mr. Couder’s employment may be terminated by us with
or without cause at any time and by Mr. Couder with
60 days’ notice. If we terminate
Mr. Couder’s employment without cause or if
Mr. Couder terminates his employment for good reason,
Mr. Couder will be entitled to 12 months’ salary
and benefits.
Effective April 30, 2008, in connection with
Dr. Turley ceasing to be our Vice President and Chief
Commercial Officer, Bookham Technology plc, our wholly-owned
subsidiary, entered into an agreement with Dr. Turley,
approved by the compensation committee, pursuant to which
Dr. Turley received, in lieu of any advance notice,
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termination or severance payments to which he may otherwise have
been entitled, an aggregate payment of £214,061 ($423,769
based on exchange rate on the agreement date) consisting of
(i) severance pay equal to 14 months of
Dr. Turley’s base salary, (ii) accrued vacation
through the effective date of his resignation,
(iii) certain reimbursement costs and (iv) payments
covering his benefits, pension and car allowance for an
equivalent of four months.
Our executive officers are elected by our board of directors and
serve at its discretion, subject to a three-month notice period
in the case of Messrs. Meldrum and Haynes. The agreements
provide that the notice period does not apply if the officer is
being terminated for cause, which is defined to include gross
misconduct; conduct which our board of directors determines
brings the individuals or us into disrepute or a serious breach
of the employment agreement.
On May 7, 2007, we entered into a letter agreement with
Dr. Bordui with respect to his employment as our interim
President and Chief Executive Officer. The agreement was
terminated on August 12, 2007 upon the hiring of
Mr. Couder as our President and Chief Executive Officer and
30 days’ written notice by the Company. This agreement
provided for an annualized salary of $500,000 for the one-year
period commencing on February 13, 2007. This agreement also
contains a prohibition on the use or disclosure of our
confidential information, such as trade secrets, patents and
customer information, for non-business purposes.
Each of our named executive officers entered into a formal
Executive Severance and Retention Agreement in May, 2008. These
agreements provide for the payment of base salary and accrued
bonus in the event of a termination of employment without cause.
In addition these agreements provide for the payment of base
salary, accrued bonus, and stock acceleration as outlined in the
table below, in the event of a change in control or termination
of employment without cause or for good reason (as defined in
the Executive Severance and Retention Agreement), provided that
the individual is employed by us on the date of the closing of
the change in control. Payments of salary and accrued bonuses
made under the agreement following a change of control are
subject to a “double trigger”, meaning that both a
change of control and a termination are required. Acceleration
of stock is subject to a single trigger, meaning the shares of
restricted stock or restricted stock units and stock options
will vest in full upon the consummation of a change of control.
A change in control means, in summary: (i) the acquisition
by a party or group of 50% or more of the outstanding stock of
the company; (ii) a change, without Board of Directors
approval, of a majority of the Board of Directors;
(iii) the acquisition of the company by means of a
reorganization, merger, consolidation or asset sale; or
(iv) the approval of a liquidation of the company.
We believe providing these benefits help us compete for and
retain the best possible executive talent. After reviewing the
practices of companies represented in our peer group, we believe
that our severance and change of control benefits are generally
comparable with, if not below, the median of severance packages
offered to executives by companies in our peer group. We also
believe that a change of control agreement is necessary to
diminish the inevitable distraction of executives by virtue of
the personal uncertainties and risks created by a pending or
threatened change of control. This along with the severance
agreement are designed to encourage the executive’s full
attention and dedication and to provide a compensation and
benefits arrangement satisfactory to the executive officer.
This excerpt taken from the BKHM DEF 14A filed Sep 14, 2007. Employment,
Change of Control and Severance Arrangements
Each of Dr. Turley and Messrs. Abely, Haynes and
Meldrum has an employment agreement with Bookham Technology plc.
Until Dr. Anania ceased to be our president and chief
executive officer in February 2007, he also had an employment
agreement with Bookham Technology plc. These agreements describe
the individual’s salary, bonus and other benefits including
medical and life insurance coverage, car allowance, vacation and
sick days, and pension plan participation. The agreements also
contain a prohibition on the use or disclosure of our
confidential information, such as trade secrets, patents and
customer information, for non-business purposes.
Dr. Anania’s
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agreement also contained a non-competition clause prohibiting
Dr. Anania from dealing with our customers or prospective
customers, and a non-solicitation clause prohibiting
Dr. Anania from dealing with certain of our suppliers,
prospective suppliers, senior executives, salespersons and other
key employees, for a period of twelve months after he has
stopped working for us. The agreements with Mr. Haynes and
Mr. Meldrum contain similar prohibitions, as well as a
prohibition on being employed by or otherwise involved with any
of our competitors for a period of six months after either has
stopped working for us.
On May 28, 2007, in connection with Dr. Anania ceasing
to be our president and chief executive officer, Bookham
Technology plc entered into a compromise agreement with
Dr. Anania, which provided for the payment to
Dr. Anania of normal salary and benefits through
February 13, 2007, £264,000 in lieu of notice under
our prior service agreement with Dr. Anania, £34,320
for accrued vacation and £66,000 as compensation for loss
of employment. In addition, we agreed to accelerate the vesting
of 128,906 shares of restricted stock held by
Dr. Anania. These payments were made in full and final
settlement of all claims that Dr. Anania may have had
against Bookham Technology (or any entity affiliated with
Bookham Technology) or any of its or their officers or
employees, including claims arising out of his employment or the
termination of his employment.
Our executive officers are elected by our board of directors and
serve at its discretion, subject to a three-month notice period
in the case of Messrs. Abely, Meldrum and Haynes and a
four-month notice period in the case of Dr. Turley. The
agreements provide that the notice period does not apply if the
officer is being terminated for cause, which is defined to
include gross misconduct, conduct which our board of directors
determines brings the individuals or us into disrepute or a
serious breach of the employment agreement.
On May 7, 2007, we entered into a letter agreement with
Dr. Bordui with respect to his employment as our interim
President and Chief Executive Officer. The agreement, which was
terminable upon 30 days’ prior written notice by
either party, provided for an annualized salary of $500,000 for
the one-year period commencing on February 13, 2007,
subject to adjustment as determined by our board of directors.
Each of Dr. Turley and Mr. Abely has entered into a
bonus agreement with us that provides for the payment of
£150,000, in the event of a change in control, provided
that the individual is employed by us:
A change in control is defined as:
We have entered into restricted stock agreements with
Mr. Abely, Mr. Haynes, Dr. Turley and
Mr. Meldrum pursuant to which these individuals received
250,000, 125,000, 50,000 and 70,000 shares, respectively,
of restricted stock or restricted stock units on
November 11, 2005. One-half of these shares of restricted
stock or restricted stock
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units vest as to 25% on the one-year anniversary of the grant
date and an additional 2.083% at the end of each month following
the first anniversary of the grant date until the fourth
anniversary of the grant date. The remaining shares of
restricted stock or restricted stock units underlying the awards
will vest as to 50% if we generate non-GAAP earnings before
interest, taxes, depreciation and amortization (excluding
restructuring charges, one-time items and the non-cash
compensation expense from stock compensation) that are
cumulatively greater than zero for two successive quarters and
50% if we generate non-GAAP earnings before interest, taxes,
depreciation and amortization (excluding restructuring charges,
one-time items and the non-cash compensation expense from stock
compensation) that are cumulatively greater than 8% of revenues
for two successive quarters. The shares of restricted stock or
restricted stock units will vest in full upon the consummation
of a change of control, provided that the grantee is
continuously employed by Bookham through such date.
We have also entered into restricted stock agreements with
Mr. Abely, Mr. Haynes, Mr. Meldrum and
Dr. Turley pursuant to which these individuals each
received 25,000 shares of restricted stock or restricted
stock units, respectively, on June 12, 2007. These shares
vest upon the achievement by the Company of positive adjusted
EBITDA. The shares of restricted stock or restricted stock units
will vest in full upon the consummation of a change of control,
provided that the grantee is continuously employed by Bookham
through such date.
Under the restricted stock agreements, “change of
control” means:
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