Exhibit 10.3

 

VIAVI SOLUTIONS INC.

1998 EMPLOYEE STOCK PURCHASE PLAN
(Restated effective as of August 1, 2015)

 

I.                                        PURPOSE

 

The Plan was initially established as the JDS Uniphase Corporation 1998 Employee
Stock Purchase Plan effective as of August 1, 1998 and has subsequently been
amended from time to time.  In connection with its spin-off of Lumentum
Holdings, Inc., effective August 1, 2015 (the “Spin-Off”), and the related
renaming of JDS Uniphase Corporation as Viavi Solutions Inc., the Plan is hereby
amended and restated in its entirety as the Viavi Solutions Inc. 1998 Employee
Stock Purchase Plan, effective as of August 1, 2015 (the “Restatement Effective
Date”).  The Plan is intended to provide eligible employees of the Company and
one or more of its Corporate Affiliates with the opportunity to acquire a
proprietary interest in the Company through participation in a plan designed to
qualify as an employee stock purchase plan under Section 423 of the Internal
Revenue Code (the “Code”).

 

II.                                   DEFINITIONS

 

For purposes of administration of the Plan, the following terms shall have the
meanings indicated:

 

Compensation means the (i) regular base salary paid to a Participant by one or
more Participating Companies during such individual’s period of participation in
the Plan, plus (ii) any amounts contributed by the Corporation or any Corporate
Affiliate pursuant to a salary reduction agreement which are not includible in
the gross income of the Participant by reason of Code Sections 402(e)(3) or 125,
plus (iii) all of the following amounts to the extent paid in cash: overtime
payments, bonuses, commissions, profit-sharing distributions and other
incentive-type payments.  However, Eligible Earnings shall not include any
contributions (other than those excludible from the Participant’s gross income
under Code Sections 402(e)(3) or 125) made on the Participant’s behalf by the
Corporation or any Corporate Affiliate to any deferred compensation plan or
welfare benefit program now or hereafter established.

 

Board means the Board of Directors of the Company.

 

Company means Viavi Solutions Inc., a Delaware corporation, formerly known as
JDS Uniphase Corporation, and any corporate successor to all or substantially
all of the assets or voting stock of Viavi Solutions Inc., which shall by
appropriate action adopt the Plan.

 

Corporate Affiliate means any company which is, or in the future becomes, either
the parent corporation or a subsidiary corporation of the Company (as determined
in accordance with Section 424 of the Code).

 

Employee means any person who is regularly engaged, for a period of more than 20
hours per week and more than 5 months per calendar year, in the rendition of
personal services to the Company or any other Participating Company for earnings
considered wages under Section 3121(a) of the Code.  For purposes of the Plan, a
person’s employment with the Company or a Participating Company terminates and
the person ceases to be an Employee on the date on which such person ceases to
provide continuous active service to the Company or Participating Company. In
jurisdictions requiring notice in advance of an effective termination of an
employee’s employment, an employee’s continuous active service shall be deemed
terminated upon the actual cessation of the active performance of duties or
responsibilities in providing services to the Company or a Participating
Company, notwithstanding any required notice period that must be fulfilled or
pay in lieu of notice or severance pay that must be provided before a
termination as an employee can otherwise become effective under applicable laws,
regardless of whether such notice has been fulfilled or pay in lieu of notice or
severance pay has been provided. Further, and notwithstanding anything else in
the Plan, a person’s employment with the Company or a Participating Company
terminates and the person ceases to be an Employee on the date that he or she is
notified that his or her employment is terminated for cause or for just cause. 
The terms “termination of employment” or “cessation of Employee status” or
similar terms have meaning corresponding to this definition of “Employee.”

 

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Employee Matters Agreement means the Employee Matters Agreement by and among JDS
Uniphase Corporation, Lumentum Operations LLC and Lumentum Holdings, Inc.
entered into in connection with the Spin-Off.

 

Participant means any Employee of a Participating Company who is actively
participating in the Plan.

 

Participating Company means the Company and such Corporate Affiliate or
Affiliates as may be designated from time to time by the Board.

 

Plan means this 1998 Employee Stock Purchase Plan.

 

Plan Administrator means either the Board or a Committee of the Board that is
responsible for administration of the Plan.

 

Purchase Period means each six-month period commencing on (1) any February 1 and
ending on the subsequent July 31, or (2) commencing on August 1 and ending on
the subsequent January 31; provided, however, that the Plan Administrator may
establish prior to the commencement of any Purchase Period, a different duration
for one or more Purchase Periods or different commencing or ending dates for
such Purchase Periods; provided that no Purchase Period may have a duration
exceeding six (6) months.  If the first or last day of a Purchase Period is not
a day on which the principal stock exchange or quotation system on which the
Stock is then listed is open for trading, the Company shall specify the trading
day that will be deemed the first or last day, as the case may be, of the
Purchase Period.

 

Stock means shares of the common stock of the Company.

 

Viavi Ratio means a ratio equal to 1.7902, which is the quotient obtained by
dividing (i) the Pre-Distribution JDSU Stock Price, by (ii) the
Post-Distribution Viavi Stock Price (as such terms are defined by the Employee
Matters Agreement).

 

III.                              ADMINISTRATION

 

(a)         The Plan shall be administered by the Plan Administrator which shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan.  Every finding, decision and determination made by
the Plan Administrator shall, to the full extent permitted by applicable law, be
final and binding upon all persons.

 

(b)         No member of the Committee while serving as such shall be eligible
to participate in the Plan.

 

IV.                               PURCHASE PERIODS

 

(a)         Stock shall be offered for purchase under the Plan through a series
of Purchase Periods established by the Plan Administrator until such time as
(i) the maximum number of shares of Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated,
discontinued, or suspended in accordance with Article X or Article XI.

 

(b)         The Participant shall be granted a separate purchase right for each
Purchase Period in which he/she participates.  The purchase right shall be
granted on the first day of the Purchase Period and shall be automatically
exercised on the last day of such Purchase Period provided such purchase right
remains outstanding on such date.

 

(c)          The acquisition of Stock through participation in the Plan for any
Purchase Period shall neither limit nor require the acquisition of Stock by the
Participant in any subsequent Purchase Period, subject to the limitations of
Sections V, VII, and VIII hereof.

 

(d)         Under no circumstances shall any purchase rights granted under the
Plan be exercised, nor shall any shares of Stock be issued hereunder, until such
time as (i) the Plan shall have been approved by the Company’s

 

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stockholders and (ii) the Company shall have complied with all applicable
requirements of the Securities Act of 1933 (as amended), all applicable listing
requirements of any securities exchange on which the Stock is listed and all
other applicable requirements established by law or regulation.

 

V.                                    ELIGIBILITY AND PARTICIPATION

 

(a)         Every Employee of a Participating Company shall be eligible to
participate in the Plan on the first day of the first Purchase Period following
the Employee’s commencement of service with the Company or any Corporate
Affiliate.

 

(b)         In order to participate in the Plan for a particular Purchase
Period, the Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) prior to the commencement date of the Purchase Period.

 

(c)          The payroll deduction authorized by a Participant for purposes of
acquiring Stock under the Plan may be any multiple of 1% of Compensation paid to
the Participant during the relevant Purchase Period, up to a maximum of 10%. 
The deduction rate so authorized shall continue in effect for the entire
Purchase Period unless the Participant shall, prior to the end of the Purchase
Period for which the purchase right is in effect, reduce the rate by filing the
appropriate form with the Plan Administrator (or its designate).  The reduced
rate shall become effective as soon as practicable following the filing of such
form.  Each Participant shall be permitted such a rate reduction only one
(1) time in each Purchase Period.  The reduced rate shall continue in effect for
the entire Purchase Period and for each subsequent Purchase Period, unless the
Participant shall, prior to the commencement of any subsequent Purchase Period,
designate a different rate (up to the 10% maximum) by filing the appropriate
form with the Plan Administrator (or its designate).  The new rate shall become
effective for the first Purchase Period commencing after the filing of such
form.  Payroll deductions, however, will automatically cease upon the
termination of the Participant’s purchase right in accordance with
Section VII(d) or (e) below.

 

(d)         With respect to Participants who are not United States residents,
the amount deducted for each such Participant shall be deducted from the
Participant’s salary in the currency in which such Participant is compensated
and shall be converted to United States dollars by using the United States
buying rate as reported by Bloomberg for the purchase of United States dollars
with such currency on the day Stock is purchased for the Participant’s account.

 

VI.                               STOCK SUBJECT TO PLAN

 

(a)         The Stock purchasable by Participants under the Plan shall, solely
in the Board’s discretion, be made available from either authorized but unissued
Stock or from reacquired Stock, including shares of Stock purchased on the open
market.  Prior to the Restatement Effective Date, the total number of shares of
Stock which may be issued under the Plan is Fifty Million (50,000,000) shares
(subject to adjustment under Section VI(b)).  As of the Restatement Effective
Date, an aggregate of 3,199,171 shares of Stock remained available for issuance
under the Plan.  Pursuant to the determination of the Plan Administrator in
accordance with Section VI(b), effective as of the Restatement Effective Date,
the aggregate number of shares of Stock available for issuance under the Plan
shall be 5,727,155.(1)  With respect to any amendment to increase the total
number of shares of Stock under the Plan, the Plan Administrator shall have
discretion to disallow the purchase of any increased shares of Stock for the
Purchase Period in existence at the time of such increase.  If the Plan
Administrator determines that on a given purchase date the number of shares with
respect to which purchase rights are to be exercised may exceed the number of
shares then available for sale under the Plan, the Plan Administrator may make a
pro-rata allocation of the shares remaining available for purchase on such
purchase date in as uniform a manner as shall be practicable and as it shall
determine to be equitable and continue such Purchase Period.  Any amount
remaining in a Participant’s payroll account following such pro-rata allocation
shall be promptly refunded to the Participant and shall not be carried over to
any future Purchase Period.

 

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(1) Pursuant Section VI(b) of this Plan and the terms of the Employee Matters
Agreement, the numbers of shares of Stock described in Section VI(a) prior to
adjustment have been adjusted by multiplying them by the Viavi Ratio.

 

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(b)         In the event any change is made to the Stock purchasable under the
Plan by reason of any recapitalization, stock dividend, stock split, combination
of shares or other change affecting the outstanding common stock of the Company
as a class without receipt of consideration, then appropriate adjustments shall
be made by the Plan Administrator to the class and maximum number of shares
purchasable under the Plan, the class and maximum number of shares purchasable
per Participant under any purchase right outstanding at the time or purchasable
per Participant over the term of the Plan, and the class and number of shares
and the price per share of the Stock subject to outstanding purchase rights held
by Participants under the Plan.

 

VII.                          PURCHASE RIGHTS

 

An Employee who participates in the Plan for a particular Purchase Period shall
have the right to purchase Stock on the purchase date for such Purchase Period
upon the terms and conditions set forth below and shall execute a purchase
agreement embodying such terms and conditions and such other provisions (not
inconsistent with the Plan) as the Plan Administrator may deem advisable.

 

(a)         Purchase Price.  The purchase price per share shall be the lesser of
(i) 95% of the fair market value of a share of Stock on the date on which the
purchase right is granted or (ii) 95% of the fair market value of a share of
Stock on the date the purchase right is exercised.  For purposes of determining
such fair market value (and for all other valuation purposes under the Plan),
the fair market value per share of Stock on any date shall be the closing
selling price per share (or the closing bid, if no sales are reported on such
date), as officially quoted on any established stock exchange or a national
market system, including without limitation The Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, on the date of determination
(or, if no closing selling price or closing bid was reported on that date, as
applicable, on the last trading date such closing selling price or closing bid
was reported), as reported in The Wall Street Journal or such other source as
the Plan Administrator deems reliable;

 

(b)         Number of Purchasable Shares.  The number of shares purchasable by a
Participant on a purchase date for a Purchase Period shall be the number of
whole shares obtained by dividing the amount collected from the Participant
through payroll deductions during the Purchase Period, together with any amount
carried over from the prior Purchase Period pursuant to the provisions of
Section VII(f), by the purchase price in effect for such purchase date. 
However, the maximum number of shares purchasable by the Participant pursuant to
any one outstanding purchase right shall not exceed 4,000 shares (subject to
adjustment under Section VI(b)).

 

Under no circumstances shall purchase rights be granted under the Plan to any
Employee if such Employee would, immediately after the grant, own (within the
meaning of Section 424(d) of the Code), or hold outstanding options or other
rights to purchase, stock possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company or any of its Corporate
Affiliates.

 

(c)          Payment.  Payment for Stock purchased under the Plan shall be
effected by means of the Participant’s authorized payroll deductions.  Such
deductions shall begin on the first pay day coincident with or immediately
following the commencement date of the relevant Purchase Period and shall
terminate with the pay day ending with or immediately prior to the last day of
the Purchase Period.  The amounts so collected shall be credited to the
Participant’s individual account under the Plan, but no interest shall be paid
on the balance from time to time outstanding in the account.  The amounts
collected from a Participant may be commingled with the general assets of the
Company and may be used for general corporate purposes.

 

(d)         Termination of Purchase Rights.

 

(i)             A Participant may, prior to any purchase date, terminate his/her
outstanding purchase right under the Plan by filing the prescribed notification
form with the Plan Administrator (or its designate).  The Company will then
refund the payroll deductions which the Participant made with respect to the
terminated purchase right, and no further amounts will be collected from the
Participant with respect to such terminated right.

 

(ii)          The termination shall be irrevocable with respect to the
particular Purchase Period to which it pertains and shall also require the
Participant to re-enroll in the Plan (by making a timely filing of a new
purchase

 

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agreement and payroll deduction authorization) if the Participant wishes to
resume participation in a subsequent Purchase Period.

 

(e)          Termination of Employment.  If a Participant ceases Employee status
during any Purchase Period, then the Participant’s outstanding purchase right
under the Plan shall immediately terminate and all sums previously collected
from the Participant and not previously applied to the purchase of stock during
such Purchase Period shall be promptly refunded.  However, should the
Participant die or become permanently disabled while in Employee status, then
the Participant or the person or persons to whom the rights of the deceased
Participant under the Plan are transferred by will or by the laws of descent and
distribution (the “successor”) will have the election, exercisable at any time
prior to the purchase date for the Purchase Period in which the Participant dies
or becomes permanently disabled, to (i) withdraw all of the funds in the
Participant’s payroll account at the time of his/her cessation of Employee
status or (ii) have such funds held for purchase of shares of Stock on the
purchase date.  If the Plan Administrator (or its designate) does not receive
such an election prior to the purchase date for such Purchase Period, the
successor will be deemed to have elected to withdraw all of the funds in the
Participant’s payroll account at the time of his/her cessation of Employee
status and such funds shall be distributed to the successor as soon as
administratively practicable.  In no event, however, shall any further payroll
deductions be added to the Participant’s account following his/her cessation of
Employee status.

 

For purposes of the Plan, a Participant shall be deemed to be permanently
disabled if he/she is unable, by reason of any medically determinable physical
or mental impairment expected to result in death or to be of continuous duration
of at least twelve (12) months, to engage in any substantial gainful employment.

 

(f)           Stock Purchase.  Outstanding purchase rights shall be
automatically exercised as provided in Section IV(b).  The exercise shall be
effected by applying the amount credited to the Participant’s account on the
last date of the Purchase Period to the purchase of whole shares of Stock
(subject to the limitations on the maximum number of purchasable shares set
forth in Section VII(b)) at the purchase price in effect for such purchase
date.  Any amount remaining in the Participant’s account after such exercise
representing a fractional share of Stock shall be held for the purchase of Stock
on the next purchase date; provided, however, that any other amount not applied
to the purchase of Stock at the end of a Purchase Period shall be refunded
promptly after the close of the Purchase Period, including any amount not
applied to the purchase of stock by reason by the Section VII(b) or the
Section VIII limitations on the maximum number of purchasable shares.

 

(g) Rights as Stockholder.  A Participant shall have no rights as a stockholder
with respect to shares covered by the purchase rights granted to the Participant
under the Plan until the shares are actually purchased on the Participant’s
behalf in accordance with Section VII(f).  No adjustments shall be made for
dividends, distributions or other rights for which the record date is prior to
the date of such purchase.

 

(h)         Assignability.  No purchase rights granted under the Plan shall be
assignable or transferable by a Participant except by will or by the laws of
descent and distribution, and the purchase rights shall, during the lifetime of
the Participant, be exercisable only by such Participant.

 

(i)             Merger or Liquidation of Company.  In the event the Company or
its stockholders enter into an agreement to dispose of all or substantially all
of the assets or outstanding capital stock of the Company by means of a sale,
merger or reorganization in which the Company will not be the surviving
corporation (other than a reorganization effected primarily to change the State
in which the Company is incorporated) or in the event the Company is liquidated,
then all outstanding purchase rights under the Plan shall automatically be
exercised immediately prior to such sale, merger, reorganization or liquidation
by applying all sums previously collected from Participants pursuant to their
payroll deductions in effect for such rights to the purchase of whole shares of
Stock, subject, however, to the applicable limitations of Section VII(b) and
Section VIII.

 

VIII.                     ACCRUAL LIMITATIONS

 

(a)         No Participant shall be entitled to accrue rights to acquire Stock
pursuant to any purchase right under this Plan if and to the extent such
accrual, when aggregated with (I) Stock rights accrued under other purchase
rights outstanding under this Plan and (II) similar rights accrued under other
employee stock purchase plans (within the meaning of Section 423 of the Code) of
the Company or its Corporate Affiliates, would otherwise permit such

 

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Participant to purchase more than $25,000 worth of stock of the Company or any
Corporate Affiliate (determined on the basis of the fair market value of such
stock on the date or dates such rights are granted to the Participant) for each
calendar year such rights are at any time outstanding.

 

(b)         For purposes of applying the accrual limitations of Section VIII(a),
the right to acquire Stock pursuant to each purchase right outstanding under the
Plan shall accrue as follows:

 

(i)             The right to acquire Stock under each such purchase right shall
accrue as and when the purchase right first becomes exercisable during the
calendar year as provided in Section IV(b).

 

(ii)          No right to acquire Stock under any outstanding purchase right
shall accrue to the extent the Participant has already accrued in the same
calendar year the right to acquire $25,000 worth of Stock (determined on the
basis of the fair market value on the date or dates of grant) pursuant to that
purchase right or one or more other purchase rights which may have been held by
the Participant during such calendar year.

 

(iii) If by reason of the Section VIII(a) limitations, the Participant’s
outstanding purchase right does not accrue for any Purchase Period, then the
payroll deductions which the Participant made during that Purchase Period with
respect to such purchase right shall be promptly refunded.

 

(c)          In the event there is any conflict between the provisions of this
Article VIII and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article VIII shall be controlling.

 

IX.                              STATUS OF PLAN UNDER FEDERAL TAX LAWS

 

(a)         The Plan is designed to qualify as an employee stock purchase plan
under Section 423 of the Code.  However, the Plan Administrator may, at its
discretion, cease to administer the Plan as a qualified employee stock purchase
plan under Code Section 423.  Accordingly, share purchases effected under the
Plan at any time after the Plan ceases to be administered as a qualified
employee stock purchase plan under Code Section 423 (whether pursuant to
purchase rights granted before or after the Plan ceases to be qualified) shall
result in taxable income to each Participant equal to the excess of (i) the fair
market value of the purchased shares on the purchase date over (ii) the purchase
price paid for such shares.

 

(b)         To the extent required by law, the Company’s obligation to deliver
shares to the Participant upon the exercise of any outstanding purchase right
shall be subject to the Participant’s satisfaction of all applicable federal,
state and local income and employment and similar non-United States tax
withholding requirements.

 

X.                                   AMENDMENT AND TERMINATION

 

(a)         The Board may from time to time alter, amend, suspend or discontinue
the Plan; provided, however, that no such action shall become effective prior to
the exercise of outstanding purchase rights at the end of the Purchase Period in
which such action is authorized.  To the extent necessary to comply with Code
Section 423, the Company shall obtain stockholder approval in such a manner and
to such a degree as required.

 

(b)         The Company shall have the right, exercisable in the sole discretion
of the Plan Administrator, to terminate the Plan immediately following the end
of a Purchase Period.  Should the Company elect to exercise its right to
terminate the Plan, then the Plan shall terminate in its entirety, and no
further purchase rights shall thereafter be granted, and no further payroll
deductions shall thereafter be collected, under the Plan.

 

XI.                              GENERAL PROVISIONS

 

(a)         The Plan shall terminate upon the earlier of (i) August 1, 2018 or
(ii) the date on which all shares available for issuance under the Plan shall
have been sold pursuant to purchase rights exercised under the Plan.

 

(b)         All costs and expenses incurred in the administration of the Plan
shall be paid by the Company.

 

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(c)          Neither the action of the Company in establishing the Plan, nor any
action taken under the Plan by the Plan Administrator, nor any provision of the
Plan itself shall be construed so as to grant any person the right to remain in
the employ of the Company or any of its Corporate Affiliates for any period of
specific duration, and such person’s employment may be terminated at any time,
with or without cause.  Termination of the Plan, or of a person’s status as an
Employee or a Participant under the Plan, shall not constitute a constructive
dismissal of the Participant’s employment with the Company or a Participating
Company.  Further, no person shall have any rights or entitlement under the Plan
after such person has ceased to be an Employee for purposes of the Plan or a
Participant in the Plan.

 

(d)         Governing Law.  The Plan is to be construed in accordance with and
governed by the internal laws of the State of California (as permitted by
Section 1646.5 of the California Civil Code, or any similar successor provision)
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties, except to the extent the
internal laws of the State of California are superseded by the laws of the
United States.  Should any provision of the Plan be determined by a court of law
to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.

 

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