EXHIBIT 10.1

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Second Amended and Restated Employment Agreement (the “Agreement”), made as
of this 26th day of July, 2012 is entered into by Oclaro, Inc., a Delaware
corporation with its principal place of business at 2560 Junction Avenue, San
Jose, California 95134 (the “Company”), and Alain Couder (the “Employee”).

RECITALS

A. The Company and Employee previously entered into an Employment Agreement
dated as of July 10, 2007 (the “Original Agreement”), which was subsequently
amended and restated as of August 2, 2010 (the “Amended Agreement”).

B. The Company and Employee desire to amend and restate the Amended Agreement on
the terms set forth herein.

C. The Company desires to continue to employ the Employee, and the Employee
desires to continue to be employed by the Company.

D. The Company and Employee also desire to provide for Employee to continue as
the Executive Chairman of the Company for three months following the Retirement
Date, all as set forth herein.

In consideration of the mutual covenants and promises contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties to this Agreement,
the parties agree as follows:

1. Term of Employment. The Company hereby agrees to continue to employ the
Employee, and the Employee hereby agrees to continue his employment with the
Company, upon the terms set forth in this Agreement, for the period commencing
as of July 1, 2012 (the “Commencement Date”) and ending upon the earlier of
(i) June 30, 2014 (the “Retirement Date”) or (ii) the date that either the
Company or Employee terminates Employee’s employment with the Company in
accordance with the provisions of Section 5 (which date, if it occurs, shall be
the “Termination Date”) (such period, the “Employment Period”).

2. Executive Chairman Following Retirement Date. The Company and the Employee
hereby agree that, if the Employment Period is not terminated in accordance with
Section 5 prior to the Retirement Date, the Company will appoint Employee as the
Executive Chairman of the Company’s Board of Directors (the “Board”) for the
period from the Retirement Date to September 30, 2014 (the “Continuation
Period”). Employee acknowledges that as of the date of this Agreement, no
determination has been made regarding whether Employee will continue as chairman
of the Board or as a member of the Board after September 30, 2014.

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3. Title; Capacity; Duties

3.1 Title; Location. During the Employment Period, the Employee shall serve as
Chairman of the Board and Chief Executive Officer of the Company with the duties
and responsibilities customarily assigned to such positions and such other
duties and responsibilities as the Board shall from time to time reasonably
assign to the Employee. The Employee shall be based at the Company’s
headquarters in San Jose, California. The Employee shall be subject to the
supervision of, and shall have such authority as is delegated to the Employee
by, the Board. During the Continuation Period, the Employee shall serve as the
Executive Chairman of the Board, with such duties and responsibilities as the
Board shall assign to him at that time. Employee agrees that, if requested by
the Company, Employee will during the Continuation Period sign such
certifications and representation letters to the Company, the audit committee of
the Board, Employee’s successor as Chief Executive Officer, the Company’s
independent auditors or others as the Company may request, with respect to the
financial statements, operations and internal controls of the Company during the
periods that Employee was Chief Executive Officer of the Company.

3.2 Duties. The Employee hereby accepts such employment as Chairman of the Board
and Chief Executive Officer during the Employment Period and agrees to undertake
the duties and responsibilities inherent in such position and such other duties
and responsibilities as the Board shall from time to time reasonably assign to
the Employee. The Employee agrees to devote his entire business time, attention
and energies to the business and interests of the Company during the Employment
Period, except for (i) non-executive positions held as of the Commencement Date,
and membership on the Board of Directors of one other company which is not a
competitor, supplier or customer of the Company, and (ii) such other roles only
with the prior consent of the Board, which consent shall not be unreasonably
withheld. The Employee agrees to abide by the rules, regulations, instructions,
personnel practices and policies of the Company and any changes therein which
may be adopted from time to time by the Company.

3.3 Status as a Part-Time Employee During the Continuation Period. The Company
and Employee agree that Employee’s full-time employment with the Company will
terminate as of the Retirement Date. If the Employment Period ends prior to the
Retirement Date, then Employee’s employment with the Company will terminate as
of the Termination Date and the Employee shall be deemed to have resigned from
all offices and directorships for the Company and its affiliates and
subsidiaries, to the extent requested by the Board. During the Continuation
Period, Employee shall be a part-time employee of the Company, not a full-time
employee.

4. Compensation and Benefits.

4.1 Salary. The Company shall pay the Employee, in periodic installments in
accordance with the Company’s customary payroll practices, a base salary at the
annualized rate of $650,000 (the “Base Salary”) during the Employment Period.
For the Continuation Period, Employee will be entitled to compensation of
$81,250 for his service as Executive Chairman, which amount will be paid in
three monthly installments of $27,083.

 

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4.2 Bonus. During each fiscal year during the Employment Period, the Employee
shall be eligible for a bonus, the “target amount” of which will be 100% of Base
Salary, and the maximum aggregate amount of which will be up to 200% of the Base
Salary, in each case earned by the Employee for such bonus measurement period as
may be established by the Board or the Compensation Committee from time to time,
and which amount may be measured and paid annually or over shorter periods as
determined by the Board or the Compensation Committee of the Board (the
“Compensation Committee”). The actual amount of the bonus will be based on
achievement of individual and/or Company performance targets set by the Board or
the Compensation Committee, and the Employee must remain employed by the Company
through the end of the bonus measurement period at issue in order to be eligible
to receive any bonus. The parties contemplate that such performance targets will
be consistent with the performance targets for the Company’s executive officers
generally. Employee shall not be entitled to any bonus during the Continuation
Period.

4.3 Prior Equity Grants. The Company granted to the Employee certain stock
options and restricted stock in connection with the execution of the Original
Agreement and has since the time the Original Agreement was executed granted
additional equity awards to Employee in the form of stock options and restricted
stock awards. All such existing equity grants shall continue to be subject to
the terms and conditions of the Company’s 2004 Stock Incentive Plan, as amended,
and the applicable stock option, restricted stock or other equity award
agreements evidencing such stock option, restricted stock or other equity
awards, except as otherwise specifically provided in this Agreement.

4.4 Additional Equity Grants. The Company will grant to Employee Restricted
Stock Units (“RSUs”) as follows: (i) concurrently with the Company’s annual
grant of equity awards to executive officers of the Company, the Company will
grant to Employee RSUs for (A) 200,000 shares of the Company’s Common Stock that
will be subject to four-year, time-based vesting contingent on Employee
continuing as an employee of the Company through the Retirement Date and
thereafter continuing as a member of the Board and (B) 200,000 shares of the
Company’s Common Stock that will be earned only upon achievement of performance
targets established by the Board at the time of grant and will thereafter be
subject to time-based vesting in accordance with the Company’s standard
practice, and (ii) in the first quarter of the fiscal year beginning June 30,
2013, the Company will grant to Employee additional RSUs as follows: (A) 200,000
shares of the Company’s Common Stock that will be subject to four-year,
time-based vesting contingent on Employee continuing as an employee of the
Company through the Retirement Date and (B) 200,000 shares of the Company’s
Common Stock that will be earned only upon achievement of performance targets
established by the Compensation Committee at the time of grant and will
thereafter be subject to time-based vesting in accordance with the Company’s
standard practice. Such performance targets will be set so as to enable the
Company to determine, on or shortly after the Retirement Date, whether such
targets were achieved by the Retirement Date. The parties contemplate that such
performance targets will be consistent with the performance targets for
performance grants to the Company’s executive officers generally. All such
grants shall be subject to the terms and conditions of the Company’s 2004 Stock
Incentive Plan, as amended from time to time (or any other plan established by
the Company under which such RSUs are granted) and the applicable award
agreement evidencing such grants.

 

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4.5 Benefits. During the Employment Period, the Employee shall be entitled to
participate in all benefit programs that the Company establishes and makes
available to its U.S. employees, if any, to the extent that Employee’s position,
tenure, salary, age, health and other qualifications make him eligible to
participate under the terms of the applicable plan. The Employee will receive
such other benefits, including vacation, holidays and sick leave, as the Company
generally provides to its United States employees. Employee’s eligibility for
participation in the Company’s benefit plans as a part-time employee during the
Continuation Period will be determined in accordance with the eligibility
provisions of those plans.

4.6 Reimbursement of Expenses. During the Employment Period and the Continuation
Period, the Company shall reimburse the Employee for all reasonable travel,
entertainment and other expenses incurred or paid by the Employee in connection
with, or related to, the performance of his duties, responsibilities or services
under this Agreement, in accordance with policies and procedures, and subject to
limitations, adopted by the Company from time to time. In all events, expense
reimbursements made will be made no later than the year following the year in
which the expense was incurred. Notwithstanding any other provision of the
Agreement to the contrary, any expense reimbursed in one taxable year in no
event will affect the amount of expenses required to be reimbursed or in-kind
benefits required to be provided in any other taxable year.

4.7 Withholding. All salary, bonus and other compensation payable to the
Employee (including the Severance Amount, the Retirement Amount and the Change
of Control Severance Amount, as those terms are defined below) shall be subject
to such withholding taxes as the Company, in its reasonable judgment, deems
necessary based on Employee’s status as an employee.

4.8 Life Insurance. The Company will pay the premiums for one year for Employee
to acquire an additional $500,000 of life insurance through the Company’s group
life insurance policy. After one year, if Employee desires to continue such
additional life insurance, Employee shall be solely responsible for the premiums
associated with such increased life insurance.

5. Termination of Employment Period. The employment of the Employee by the
Company pursuant to this Agreement shall terminate upon the occurrence of any of
the circumstances set forth below in Sections 5.1 – 5.5, and the full time
employment of the Employee by the Company will terminate upon the Retirement
Date as set forth in Section 5.6:

5.1 Cause. At the election of the Company, for Cause (as defined below),
immediately upon written notice by the Company to the Employee, which notice
shall identify the Cause upon which the termination is based. For the purposes
of this Section 5.1, “Cause” shall mean (a) a good faith finding by the Board
(excluding Employee) that the Employee has engaged in dishonesty, gross
negligence or misconduct, or (b) the conviction of the Employee of, or the entry
of a pleading of guilty or nolo contendere by the Employee to, any crime
involving moral turpitude or any felony.

 

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5.2 Good Reason. At the election of the Employee, for Good Reason (as defined
below). For the purposes of this Section 5.2, “Good Reason” for termination
shall mean:

(i) any material diminution in the Employee’s Base Salary without the prior
consent of the Employee,

(ii) a material diminution in the Employee’s authority, duties or
responsibilities without the prior consent of the Employee,

(iii) a material breach by the Company of the terms of this Agreement or

(iv) a change by the Company in the location at which the Employee performs
Employee’s principal duties for the Company to a new location that is both
(a) outside a radius of 35 miles from the Employee’s principal residence
immediately prior to such change and (b) more than 20 miles from the location at
which the Employee performed Employee’s principal duties for the Company
immediately prior to such change without the prior consent of the Employee.

In order to establish “Good Reason” for a termination, the Employee must provide
notice to the Company of the existence of the condition giving rise to the “Good
Reason” within 90 days following the initial existence of the condition, and the
Company has 30 days following receipt of such notice to remedy such condition.
If the Company remedies such condition within such 30 days, then “Good Reason”
shall be considered expunged, and Employee shall not thereafter have the right
to terminate his employment under this Section 4.2 based upon such condition. If
the Company does not remedy such condition within such 30 days, Employee will
then have an additional 30 days in which to resign under this Section 4.2. If
Employee fails to resign with such additional 30 days, Employee shall be deemed
to have waived his right to resign for Good Reason under this Section 4.2 based
upon such condition. For the avoidance of doubt, if a Change of Control occurs
during the Employment Period, and thereafter Employee is not the Chief Executive
Officer of the surviving entity, then a material diminution in the Employee’s
title, authority, duties or responsibilities shall have been deemed to have
taken place. For further avoidance of doubt, if during the Employment Period
Employee ceases to be the Chairman of the Board, but continues to be the Chief
Executive Officer of the Company and a member of the Board, then a material
diminution in the Employee’s title, authority, duties or responsibilities shall
have been deemed to have taken place.

5.3 Death or Disability. Upon the death or disability of the Employee during the
Employment Period. As used in this Agreement, the term “disability” shall mean
the inability of the Employee, due to a physical or mental disability, for a
period of 90 days, whether or not consecutive, during any 360-day period to
perform the services contemplated under this Agreement, with or without
reasonable accommodation as that term is defined under state or federal law. A
determination of disability shall be made by a physician satisfactory to both
the Employee and the Company, provided that if the Employee and the Company do
not agree on a physician, the Employee and the Company shall each select a
physician and these two together shall select a third physician, whose
determination as to disability shall be binding on all parties.

 

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5.4 Employee Election Without Good Reason. At the election of the Employee, the
Employee may terminate Employee’s employment with the Company , for any reason,
upon not less than 60 days’ written notice of termination.

5.5 Company Election Without Cause. At the election of the Company, the Company
may terminate the Employee’s employment with the Company at any time, for any
reason, immediately upon written notice of termination.

5.6 Retirement on Retirement Date. Employee’s full-time employment with the
Company shall terminate on the Retirement Date, if there has been no Termination
Date prior to the Retirement Date.

6. Effect of Termination. In the event of a termination of Employee’s employment
(including by retirement upon the Retirement Date) the following provisions of
this Section 6 shall apply:

6.1 Payments and Treatment of Equity Awards Upon Termination Under Section 5.1
or 5.4. In the event the Employee’s employment is terminated pursuant to
Section 5.1 (Cause) or 5.4 (Employee Election Without Good Reason), the Company
shall pay to the Employee the compensation and benefits otherwise payable to him
under Section 3 through the last day of his actual employment by the Company. In
addition, the vesting and exercisability of all stock options, restricted stock
grants and other equity awards granted to Employee prior to the Termination Date
shall be governed by the plans under which they were granted and the terms of
the agreements reflecting such grants.

6.2 Payments and Treatment of Equity Awards Upon Termination Under Section 5.2,
5.3 or 5.5. In the event the Employee’s employment is terminated by the Employee
pursuant to Section 5.2 (Good Reason), by reason of Employee’s death or
disability pursuant to Section 5.3 (Death or Disability), or by the Company
pursuant to Section 5.5 (Company Election Without Cause), in any of such cases
at a time that is not within the Change of Control Period (as defined below),
the payments to Employee and the treatment of Employee’s equity awards shall be
as set forth below in Sections 6.2.1-6.2.4.

6.2.1. Severance Payments. The Company shall pay to the Employee a severance
amount equal to the sum of:

(i) twice his annual salary as in effect on the Termination Date, plus

(ii) twice the amount determined by (A) adding all bonuses earned by Employee
for the three most recent full fiscal years prior to the fiscal year in which
Employee’s employment terminates and (B) dividing the sum of such bonuses by 3
(the sum of the amounts described in clauses (i) and (ii) is referred to herein
as the “Severance Amount”).

For the avoidance of doubt, the bonus component of the Severance Amount shall be
determined by (a) including bonuses earned for the prior three fiscal years,
regardless of whether such bonus amounts were paid during such fiscal year or in
the following fiscal year and (b) excluding any bonus amount paid during any of
such three fiscal years that was earned for any fiscal year prior to such three
fiscal years and further excluding any bonus for the fiscal year during which
the termination occurs. The Severance Amount shall be payable in a single lump
sum payment on the first business day after 15 days following the effective date
of the Severance and Release Agreement described below.

 

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6.2.2. Equity Awards. All stock options, restricted stock grants and other
equity awards granted to Employee prior to the Termination Date (including those
granted prior to the Commencement Date), and as to which the vesting was based
solely on continued employment and which have not vested as of the Termination
Date, shall immediately vest as of the Termination Date.

In addition, all stock options, restricted stock grants and other equity awards
granted to Employee prior to the Termination Date (including those granted prior
to the Commencement Date), and as to which the vesting was based on the
achievement of performance targets (or on a combination of achievement of
performance targets and continued service as an employee) shall be treated as
follows:

(i) if the time period for achievement of the performance targets has expired,
and the number of shares earned as a result of the achievement against those
targets has been determined, but there remain vesting conditions based on
continued service as an employee then the earned shares shall be immediately
vested as of the Termination Date; and

(ii) if the time period for achievement of the performance targets has not
expired, and the number of shares to be earned as a result of achievement has
not been determined, such options, grants and awards shall expire and be
forfeited by Employee as of the Termination Date.

In all cases the time period during which Employee may exercise any stock option
or other award shall be the greater of (m) the time period set forth in the
agreements reflecting such grants or (n) one year from the Termination Date. In
no case, however, shall the period of time to exercise any such stock option or
other award extend beyond the termination date of such stock option or other
award set forth in the agreement reflecting the grant of such stock option or
other award.

6.2.3. Benefits. The Company shall also continue to provide to the Employee
medical insurance coverage pursuant to COBRA and group life insurance coverage
(to the extent the Employee is eligible to receive such benefits, the Employee
timely completes all documents necessary to receive such coverage, and such
benefits can be provided to the Employee, or to the extent such benefits cannot
be provided to non-employees, then the cash equivalent thereof calculated based
on the sum the Company would have paid for such benefits had the Employee
continued to be employed by the Company) until the date 24 months after the date
of termination, provided that to the extent such payments are reimbursements to
the Employee of medical expenses incurred by the Employee as described in
Treasury Regulation Section 1.409A-1(b)(9)(v)(B), reimbursements may not be made
beyond the period of time during which the Employee would be entitled (or would,
but for such arrangement be entitled) to COBRA continuation coverage under a
group health plan of the Company.

 

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6.2.4. Release. The payment to the Employee of the amounts and benefits payable
under this Section 6.2 (including the accelerated vesting of options, restricted
stock grants and other equity awards) shall (x) be contingent upon the execution
by the Employee of a separation agreement and general release of all known and
unknown claims in a form reasonably acceptable to the Company (which, if
requested by the Board, shall include the Employee’s resignation from the Board)
(“Severance and Release Agreement”) and (y) constitute the sole remedy of the
Employee in the event of a termination of the Employee’s employment in the
circumstances set forth in this Section 6.2.

6.3 Payments and Treatment of Equity Awards Upon Retirement. Upon Employee’s
retirement on the Retirement Date, the payments to Employee and the treatment of
Employee’s equity awards shall be as set forth below in Sections 6.3.1-6.3.4. .
If the Employment Period ends prior to the Retirement Date, this Section 6.3
shall not apply.

6.3.1. Retirement Amount. Promptly following the Retirement Date, the Company
shall pay to the Employee a retirement amount equal to the sum of

(i) twice his annual salary as in effect on the Retirement Date, and

(ii) twice the amount determined by (A) adding all bonuses earned by Employee
for the three fiscal years ending on June 28, 2014 and (B) dividing the sum of
such bonuses by 3 (the sum of the amounts described in clauses (i) and (ii) is
referred to herein as the “Retirement Amount”).

For the avoidance of doubt, the bonus component of the Retirement Amount shall
be determined by (a) including bonuses earned for such three fiscal years,
regardless of whether such bonus amounts were paid during such fiscal year or in
the following fiscal year and (b) excluding any bonus amount paid during any of
such three fiscal years that was earned for any fiscal year prior to such three
fiscal years. The Retirement Amount shall be payable in a single lump sum
payment on the first business day after 15 days following the effective date of
the Severance and Release Agreement.

6.3.2. Treatment of Equity Awards After Retirement The vesting of all stock
options, restricted stock grants and other equity awards granted to Employee
prior to the Retirement Date (including options, grants and awards granted prior
to the Commencement Date) shall be governed by the plans under which they were
granted and the terms of the agreements reflecting such grants, provided,
however, that to the extent any such options, grants or other equity awards by
their terms vest based upon the continued employment of Employee by the Company,
such options, grants and other equity awards shall immediately vest as of the
Retirement Date.

All stock options, restricted stock grants and other equity awards granted to
Employee prior to the Retirement Date (including options, grants and awards
granted prior to the Commencement Date) and as to which the vesting was based on
the achievement of performance targets (or on a combination of achievement of
performance targets and continued service as an employee) shall be treated as
follows:

 

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(i) if at the Retirement Date the achievement of the performance targets has
already been measured and the number of shares earned has already been
determined, then all the earned shares shall be immediately vested as of the
Retirement Date, and

(ii) if at the Retirement Date the achievement of the performance targets has
not yet been measured or the number of shares earned has not yet been
determined, then the Company and the Board or the Compensation Committee shall
promptly measure the achievement of the performance targets and determine the
shares that are earned, and those earned shares shall be immediately vested as
of the Retirement Date. Any options, restricted stock grants and/or other equity
awards that are not earned because the performance targets have not been fully
achieved shall expire and be forfeited by Employee.

In all cases the time period during which Employee may exercise any stock option
or other award shall be the greater of (m) the time period set forth in the
agreements reflecting such grants or (n) one year from the date Employee ceases
to be a Board member. In no case, however, shall the period of time to exercise
any such stock option or other award extend beyond the termination date of such
stock option or other award set forth in the agreement reflecting the grant of
such stock option or other award.

6.3.3. Benefits. The Company shall also continue to provide to Employee medical
insurance coverage and group life insurance coverage as provided in this
Section 6.3.3 until the date 24 months after the Retirement Date. To the extent
Employee is eligible to continue to be enrolled in the Company’s group medical
and life insurance plans as a part-time employee, Executive Chairman, Board
member or otherwise, the Company will so enroll Employee at the Company’s
expense (provided Employee timely completes all documents necessary to effect
such enrollment or continued enrollment). If Employee is not eligible to be
enrolled in such plans on such basis as a part-time employee, Executive Chairman
or otherwise, the Company will pay the COBRA premiums for Employee to continue
in such plans under COBRA for the maximum period allowed under COBRA (provided
Employee timely completes all documents necessary to effect enrollment in such
plans under COBRA) and thereafter (until the expiration of such 24 months) the
Company will provide the Employee the cash equivalent of such COBRA premiums for
the remainder of the 24 months. To the extent such payments are deemed to be
reimbursements to the Employee of medical expenses incurred by the Employee as
described in Treasury Regulation Section 1.409A-1(b)(9)(v)(B), reimbursements
may not be made beyond the period of time during which the Employee would be
entitled (or would, but for such arrangement be entitled) to COBRA continuation
coverage under a group health plan of the Company.

6.3.4. Release. The payment to the Employee of the amounts and benefits payable
under this Section 6.3 (including the accelerated vesting of options, restricted
stock grants and other equity awards) shall be contingent upon the execution by
the Employee of a Severance and Release Agreement reasonably acceptable to the
Company (which, if requested by the Board, shall include the Employee’s
resignation from the Board).

 

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6.4 Section 409A Matters. Payments to the Employee under Section 6.2 or 6.3 (or,
if applicable, under Section 7.1 in lieu of Section 6.2) shall be bifurcated
into two portions, consisting of the portion, if any, that includes the maximum
amount of the payments that does not constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), and the portion, if any, that includes the excess
of the total payments and that does constitute nonqualified deferred
compensation. Payments shall first be made from the portion that does not
consist of nonqualified deferred compensation until such portion is exhausted
and then shall be made from the portion that does constitute nonqualified
deferred compensation. Notwithstanding the foregoing, because the Employee is a
“specified employee” as defined in Section 409A(a)(3)(B)(i) of the Code, the
commencement of the delivery of the portion that constitutes nonqualified
deferred compensation will be delayed to the date that is 6 months and one day
after the Employee’s termination of employment (the “Earliest Payment Date”).
Any payments that are delayed pursuant to the preceding sentence shall be paid
pro rata during the period beginning on the Earliest Payment Date and ending on
the date that is 12 months following termination of the Employee’s employment.
The determination of whether, and the extent to which, any of the payments to be
made to the Employee hereunder are nonqualified deferred compensation shall be
made after the application of all applicable exclusions under Treasury Reg.
Section 1.409A-1(b)(9). Any payments that are intended to qualify for the
exclusion for separation pay due to involuntary separation from service set
forth in Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later
than the last day of the second taxable year of the Employee following the
taxable year of the Employee in which the Employee’s termination of employment
occurs.

6.5 Survival. The provisions of Sections 4.7, 5, 6, 7, 8 and 9 shall survive the
termination of this Agreement.

7. Change of Control. In the event of a termination of Employee’s employment
under Section 5.2 or 5.5 that occurs during the time period that begins three
months prior to the effective date of a Change of Control (as defined on Exhibit
A attached hereto) and ends on the second anniversary of such Change of Control
(the “Change of Control Period”), the following provisions shall apply in lieu
of Section 6.2:

7.1 Payments and Treatment of Equity Awards Upon Termination Under Section 5.2 ,
5.3 or 5.5 During Change of Control Period. In the event the Employee’s
employment is terminated by the Employee pursuant to Section 5.2 (Good Reason),
by reason of Employee’s death or disability pursuant to Section 5.3 (Death or
Disability), or by the Company pursuant to Section 5.5 (Company Election Without
Cause), in any of such cases at a time that is during the Change of Control
Period, the payments to Employee the treatment of Employee’s equity awards shall
be as set forth in Sections 7.1.1 through 7.1.4 below:

7.1.1. Change of Control Severance. The Company shall pay to Employee a
severance amount equal to the sum of

(i) two and one-half times his annual salary as in effect on the date of
termination plus

(ii) two and one-half times the amount determined by (A) adding all bonuses
earned by Employee for the three most recent full fiscal years prior to the
fiscal year in which Employee’s employment terminates and (B) dividing the sum
of such bonuses by 3 (the sum of the amounts described in clauses (i) and
(ii) is referred to herein as the “Change of Control Severance Amount”).

 

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For the avoidance of doubt, the bonus component of the Change of Control
Severance Amount shall be determined by (a) including bonuses earned for the
prior three fiscal years, regardless of whether such bonus amounts were paid
during such fiscal year or in the following fiscal year and (b) excluding any
bonus amount paid during any of such three fiscal years that was earned for any
fiscal year prior to such three fiscal years and further excluding any bonus for
the fiscal year during which the termination occurs. The Change of Control
Severance Amount shall be payable in a lump sum on the first business day after
15 days following the effective date of the Severance and Release Agreement.

7.1.2. Equity Awards. In addition, all stock options, restricted stock grants
and other equity awards granted to Employee prior to the date of termination
(including options, restricted stock grants and other equity awards granted
prior to the Commencement Date) which have not vested as of the date of
termination of Employee’s employment shall immediately vest as of the date of
such termination (without regard to whether the vesting of such options,
restricted stock grants or other equity awards is based on continued employment,
achievement of performance targets or otherwise) and the time period during
which Employee may exercise any stock option or other award shall be the greater
of (m) the time period set forth in the agreements reflecting such grants or
(n) one year from the date of termination. In no case, however, shall the period
of time to exercise any such stock option or other award extend beyond the
termination date of such stock option or other award set forth in the agreement
reflecting the grant of such stock option or other award.

7.1.3. Benefits. The Company shall also continue to provide to the Employee
medical insurance coverage pursuant to COBRA and group life insurance coverage
(to the extent the Employee is eligible to receive such benefits, the Employee
timely completes all documents necessary to receive such coverage, and such
benefits can be provided to the Employee, or to the extent such benefits cannot
be provided to non-employees, then the cash equivalent thereof calculated based
on the premiums that Employee incurs to obtain comparable coverage in the
private insurance market) until the date 36 months after the date of
termination, provided that to the extent such payments are reimbursements to the
Employee of medical expenses incurred by the Employee as described in Treasury
Regulation Section 1.409A-1(b)(9)(v)(B), reimbursements may not be made beyond
the period of time during which the Employee would be entitled (or would, but
for such arrangement be entitled) to COBRA continuation coverage under a group
health plan of the Company. The payment to the Employee of the amounts and
benefits payable under this Section 7.1.3 shall (x) be contingent upon the
execution by the Employee of a Severance and Release Agreement reasonably
acceptable to the Company (“Severance and Release Agreement”) and (y) constitute
the sole remedy of the Employee in the event of a termination of the Employee’s
employment in the circumstances set forth in this Section 7.1.

 

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7.2 Adjustment of Payments and Benefits. Notwithstanding any provision of this
Agreement to the contrary, if any payment or benefit to be paid or provided
hereunder would be an “Excess Parachute Payment,” within the meaning of
Section 280G of the Code, or any successor provision thereto, but for the
application of this sentence, then the payments and benefits to be paid or
provided hereunder shall be reduced to the minimum extent necessary (but in no
event to less than zero) so that no portion of any such payment or benefit, as
so reduced, constitutes an Excess Parachute Payment; provided, however, that the
foregoing reduction shall be made only if and to the extent that such reduction
would result in an increase in the aggregate payments and benefits to be
provided, determined on an after-tax basis (taking into account the excise tax
imposed pursuant to Section 4999 of the Code, or any successor provision
thereto, any tax imposed by any comparable provision of state law, and any
applicable federal, state and local income taxes). Upon request by the Company
or the Employee, the determination of whether any reduction in such payments or
benefits to be provided hereunder is required pursuant to the preceding sentence
shall be made by the Company’s independent accountants. The Company shall pay
the expenses of such accountants, regardless of whether the Company or the
Employee requests such determination to be made by such accountants. The fact
that Employee’s right to payments or benefits may be reduced by reason of the
limitations contained in this Section shall not of itself limit or otherwise
affect any other rights of Employee under this Agreement. In the event that any
payment or benefit intended to be provided hereunder is required to be reduced
pursuant to this Section and no such payment or benefit qualifies as a “deferral
of compensation” within the meaning of and subject to Section 409A
(“Nonqualified Deferred Compensation”), Employee shall be entitled to designate
the payments and/or benefits to be so reduced in order to give effect to this
Section. The Company shall provide Employee with all information reasonably
requested by Employee to permit Employee to make such designation. In the event
that any payment or benefit intended to be provided hereunder is required to be
reduced pursuant to this Section and any such payment or benefit constitutes
Nonqualified Deferred Compensation or Employee fails to elect an order in which
payments or benefits will be reduced pursuant to this Section, then the
reduction shall occur in the following order: (a) reduction in the cash payments
described in Section 7.1 (with such reduction being applied to the payments in
the reverse order in which they would otherwise be made, that is, later payments
shall be reduced before earlier payments); (b) reduction of the continuation of
benefit described in Section 7.1; (c) cancellation of acceleration of vesting on
any equity awards for which the exercise price exceeds the then fair market
value of the underlying equity; and (d) cancellation of acceleration of vesting
of equity awards not covered under (c) above; provided, however that in the
event that acceleration of vesting of equity awards is to be cancelled, such
acceleration of vesting shall be cancelled in the reverse order of the date of
grant of such equity awards, that is, later equity awards shall be cancelled
before earlier equity awards.

7.3 Acknowledgement. Employee acknowledges that the provisions of this Section 7
with respect to the treatment of stock options, restricted stock and other
equity awards will apply to all such stock options, restricted stock and other
equity awards held by Employee, including those granted prior to the
Commencement Date, and further acknowledges that the treatment of such stock
options, restricted stock and other equity awards in connection with a Change of
Control differs from the treatment provided for the Original Agreement.

8. Non-Solicitation.

8.1 Restricted Activities. For a period of 12 months after the termination or
cessation of the Employee’s employment for any reason, the Employee will not
directly or indirectly, either alone or in association with others (i) solicit,
or permit any organization directly or indirectly controlled by the Employee to
solicit, any employee of the Company to leave the employ of the Company, or
(ii) solicit for employment, hire or engage as an independent contractor, or
permit any organization directly or indirectly controlled by the Employee to
solicit for employment, hire or engage as an independent contractor, any person
who was employed by the Company at any time during the term of the Employee’s
employment with the Company; provided, that this clause (ii) shall not apply to
the solicitation, hiring or engagement of any individual whose employment with
the Company has been terminated for a period of six months or longer.

 

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8.2 Extension. If the Employee violates the provisions of Section 8.1, the
Employee shall continue to be bound by the restrictions set forth in Section 8.1
until a period of 12 months has expired without any violation of such
provisions.

8.3 Interpretation. If any restriction set forth in Section 8.1 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

8.4 Equitable Remedies. The Employee acknowledges that the restrictions
contained in this Section 8 are necessary for the protection of the business and
goodwill of the Company and are considered by the Employee to be reasonable for
such purpose. The Employee agrees that any breach of this Section 8 is likely to
cause the Company substantial and irrevocable damage which is difficult to
measure. Therefore, in the event of any such breach or threatened breach, the
Employee agrees that the Company, in addition to such other remedies which may
be available, shall have the right to obtain an injunction from a court
restraining such a breach or threatened breach and the right to specific
performance of the provisions of this Section 8 without posting a bond and the
Employee hereby waives the adequacy of a remedy at law as a defense to such
relief.

9. Proprietary Information and Developments. In connection with the Original
Agreement, the Employee executed the Company’s customary form of non-disclosure
and assignment of inventions agreement. Such agreement shall continue in full
force and effect, unchanged by the execution of this Agreement. The Employee
further agrees that all property (including without limitation all equipment,
tangible proprietary information, documents, records, notes, contracts and
computer-generated materials) furnished to or created or prepared by the
Employee incident to Employee’s employment belongs to the Company and shall be
promptly returned to the Company upon termination of the Employee’s employment
for any reason.

10. Other Agreements. The Employee represents that his performance of all the
terms of this Agreement and the performance of his duties as an employee of the
Company do not and will not breach any agreement with any prior employer or
other party to which the Employee is a party (including without limitation any
nondisclosure or non-competition agreement). Any agreement to which the Employee
is a party relating to nondisclosure, non-competition or non-solicitation of
employees or customers is listed on Exhibit B attached hereto.

 

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11. Miscellaneous.

11.1 Notices. Any notices delivered under this Agreement shall be deemed duly
delivered four business days after it is sent by registered or certified mail,
return receipt requested, postage prepaid, or one business day after it is sent
for next-business day delivery via a reputable nationwide overnight courier
service, in each case to the address of the Company set forth in the
introductory paragraph hereto (to the attention of the Corporate Secretary of
the Company) or the residence address of the Employee most recently filed with
the Company, as the case may be. Either party may change the address to which
notices are to be delivered by giving notice of such change to the other party
in the manner set forth in this Section 11.1.

11.2 Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.

11.3 Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes all prior agreements and understandings (including
the Original Agreement), whether written or oral, relating to the subject matter
of this Agreement.

11.4 Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee. No employee of the
Company may cause the Company to execute such modification or amendment to this
Agreement unless the Board or the Compensation Committee has first approved such
modification or amendment.

11.5 Section 409A. This Agreement is intended to comply with the provisions of
Section 409A and the Agreement shall, to the extent practicable, be construed in
accordance therewith. Terms defined in the Agreement shall have the meanings
given such terms under Section 409A if and to the extent required in order to
comply with Section 409A. No payments to be made under this Agreement may be
accelerated or deferred except as specifically permitted under Section 409A. In
the event that the Agreement shall be deemed not to comply with Section 409A,
then neither the Company, the Board nor its or their designees or agents shall
be liable to the Employee or other person for actions, decisions or
determinations made in good faith.

11.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California (without reference to the
conflicts of law provisions thereof). Any claim or controversy arising out of or
relating to this Agreement or any breach thereof, including any claim for
discrimination under any local, state or federal employment discrimination law,
except as specifically excluded herein, shall be settled by non-binding
arbitration in San Jose, California and administered by the American Arbitration
Association under its Employment Arbitration Rules and Mediation Procedures, a
copy of which can be obtained at www.adr.org or by calling 800.778.7879. The
award rendered in any arbitration proceeding held under this Section 11.6 shall
be non-binding, unless the parties mutually agree that the award rendered in
such arbitration proceeding shall be binding, in which case judgment upon the
award may be entered in any court having jurisdiction thereof. Claims for
workers’ compensation or unemployment compensation benefits are not covered by
this Section 11.6. Also not covered by this Section 11.6 are claims by the
Company or by the Employee for temporary restraining orders or preliminary
injunctions (“temporary equitable relief”) in cases in which such temporary
equitable relief would be otherwise authorized by law, including, but not
limited to, claims for equitable relief arising out of a breach of Sections 8
and/or 9 of this Agreement. Both the Company and the Employee expressly waive
any right that any party either has or may have to a jury trial of any dispute
arising out of or in any way related to this Agreement or any breach thereof.
Any action, suit or other legal proceeding arising under or relating to any
provision of this Agreement shall be commenced only in a court of the State of
California (or, if appropriate, a federal court located within California), and
the Company and the Employee each consents to the jurisdiction of such a court.

 

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11.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of both parties and their respective successors and assigns,
including any corporation with which, or into which, the Company may be merged
or which may succeed to the Company’s assets or business, provided, however,
that the obligations of the Employee are personal and shall not be assigned by
him.

11.8 Waivers. No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.

11.9 Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

11.10 Severability. In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, such provision shall be enforced to the
fullest extent permitted by law, and the validity, legality and enforceability
of the remaining provisions shall in no way be affected or impaired thereby.

THE EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND
UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

[Signatures on following page]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.

 

OCLARO, INC. By:   /s/ Joel Smith, III   Name: Joel Smith, III Title:   Lead
Director of the Board of Directors

 

EMPLOYEE

/s/ Alain Couder

Name: Alain Couder

 

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EXHIBIT A

Change in Control. “Change in Control” means the consummation of a transaction
or series of transactions resulting in one or more of the following events:

(a) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock
of the Company if, after such acquisition, such Person beneficially owns (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of
either (x) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (y) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (a), the following acquisitions
shall not constitute a Change in Control: (i) any acquisition directly from the
Company (excluding an acquisition pursuant to the exercise, conversion or
exchange of any security exercisable for, convertible into or exchangeable for
common stock or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security directly from the
Company or an underwriter or agent of the Company), (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) below; or

(b) such time as the Continuing Directors (as defined below) do not constitute a
majority of the Board (or, if applicable, the Board of Directors of a successor
corporation to the Company), where the term “Continuing Director” means at any
date a member of the Board (i) who was a member of the Board on the date of the
execution of this Agreement or (ii) who was nominated or elected subsequent to
such date by at least a majority of the directors who were Continuing Directors
at the time of such nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election; provided,
however, that there shall be excluded from this clause (ii) any individual whose
initial assumption of office occurred as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents, by or on behalf of a
person other than the Board; or

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(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company in
one or a series of transactions (a “Business Combination”), unless, immediately
following such Business Combination, each of the following three conditions is
satisfied: (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; (ii) no
Person (excluding any employee benefit plan (or related trust) maintained or
sponsored by the Company or by the Acquiring Corporation) beneficially owns,
directly or indirectly, 30% or more of the then outstanding shares of common
stock of the Acquiring Corporation, or of the combined voting power of the
then-outstanding securities of such corporation entitled to vote generally in
the election of directors (except to the extent that such ownership existed
prior to the Business Combination); and (iii) at least a majority of the members
of the board of directors of the Acquiring Corporation were Continuing Directors
at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or

(d) Approval by the stockholders of the Company of the liquidation or
dissolution of the Company.