Exhibit 10.5


November 19, 2002


Re:  Initial Payment of Annual
Director Retainer


Dear
Mr. Kennedy:


The purpose of this letter
agreement (“Agreement”) is to set forth the terms upon which you will receive
an Initial Payment of a portion of your annual retainer for serving as a member
of the Board of Directors of JDS Uniphase Corporation (the “Company”).


1.     Retainer


As a member of the Board of
Directors (a “Director”) of the Company, you will receive a retainer of
$88,000 (the “Retainer”) for your service during the period from the
shareholders meeting in 2002 through the annual shareholders meeting in
2003.  You will receive an initial
payment of a portion of the Retainer in the lump-sum amount of $40,000 (the
“Initial Payment”).  The remaining
$48,000 of the Retainer will be paid to you in 12 equal monthly installments of
$4,000 beginning on November 1, 2002.


The Company will report the
payment of the Retainer to the Internal Revenue Service.  You acknowledge that satisfaction of all tax
obligations applicable to the receipt of the Retainer is your sole
responsibility.


2.     Purchase of
Company Common Stock


You agree to apply the
Initial Payment, which, at your election, shall be net of taxes, toward the
purchase of shares of Company common stock on the open market.  In order to effectuate the purchase of the
Company common stock, the Company will forward the Initial Payment to a Company
designated broker in your name.  The
Company designated broker will use the Initial Payment, less brokerage fees
and, at your election, net of taxes, to purchase shares of Company common stock
on your behalf and transfer such shares to your account.  The Company designated broker will notify
you and the Company of the date on which the shares were purchased, the number
of shares purchased and the purchase price per share.


3.     Vesting Schedule


The shares purchased with
the Initial Payment pursuant to Section 2 above (the “Shares”) shall be
subject to certain transfer restrictions and a right of repurchase, in favor of
the Company, at the lesser of (a) the purchase price per Share and (b) the
fair market value on the date of repurchase (the “Repurchase Right”).  For purposes of this Agreement, the term
“vest” shall mean, with respect to any Shares, that such Shares are no longer
subject to the Repurchase Right. 
Provided that you continue to serve as a Director of the Company, the
Repurchase Right  shall lapse in accordance with the 

















 


following schedule (the “Vesting
Schedule”):


1/3
of the Shares shall vest twelve months after the Vesting Commencement Date, and
an additional 1/3 of the Shares shall vest on each anniversary of the Vesting
Commencement Date thereafter.  The
“Vesting Commencement Date” shall be the date the Shares are purchased by the
Company designated broker in your name.


Notwithstanding the
foregoing Vesting Schedule, (a) in the event your service as a Director of
the Company terminates due to your death, Disability or Retirement (as such
terms are defined below) or (b) in the event of a Corporate Transaction, 100% of
the Shares shall vest and the Repurchase Right as to unvested Shares shall
automatically lapse.


In the event your service as
a Director of the Company terminates for any reason other than your death,
Disability or Retirement, vesting of the Shares shall cease and the unvested
Shares shall be subject to the Company’s Repurchase Right.


You agree that the Shares
may not be sold, transferred by gift, pledged, hypothecated, or otherwise
transferred or disposed of prior to the date that the Shares become vested pursuant
to the Vesting Schedule.


For purposes of Section 16
of the Securities Exchange Act of 1934, you represent that you have not sold
any shares of the Company during the six months immediately preceding the date
of this letter and you agree not to sell any shares during the six months
immediately following the date of this letter without first confirming with the
Company that such sale would not result in any liability for short-swing
profits under Section 16.


For purposes of this
Agreement, the following terms shall have the following meanings:


“Cause” means:


(a)                      willful malfeasance by you
which has a material adverse effect on the Company;


(b)                     substantial and continuing
willful refusal by you to perform duties ordinarily performed by a Director of
the Company or as otherwise required by applicable law;


(c)                      your conviction of a felony
or misdemeanor which has a material adverse effect on the Company’s goodwill if
you remain a Director of the Company; or


(d)                     willful failure by you to
comply with material policies and procedures applicable to members of the Board
of Directors of the Company including but not limited to the JDS Uniphase 

















 




Corporation Ethics Policy and Policy Regarding Inside Information and
Securities Transactions


 “Disability” means that you would qualify for benefit
payments under the long-term disability policy of the Company regardless of
whether you are covered by such policy. 
If the Company does not have a long-term disability plan in place, “Disability”
means that you are permanently unable to carry out the responsibilities and
functions of a Director of the Company by reason of any medically determinable
physical or mental impairment.  You will
not be considered to have incurred a Disability unless you furnish proof of
such impairment sufficient to satisfy the Company in its discretion.


“Retirement” means
that, following your completion of a three-year term as a Director (or such
shorter term in the event you were appointed to fill a vacancy on the Board of
Directors), either (a) you determine not to accept the nomination to serve an
additional term as a Director or (b) you are not nominated to serve an
additional term as a Director for any reason other than for Cause.


“Corporate Transaction”
shall include any of the following transactions:


(a)                      a merger or consolidation in which the Company is not the surviving
entity;


(b)                     the sale,
transfer or other disposition of all or substantially all of the assets of the
Company;


(c)                      the liquidation
or dissolution of the Company;


(d)                     any reverse merger
in which the Company is the surviving entity, except for a transaction the
principal purpose of which is to change the state in which the Company is
incorporated; or


(e)                      the direct or
indirect acquisition by any person or related group of persons (other than an
acquisition from or by the Company or by a Company-sponsored employee benefit
plan or by a person that directly or indirectly controls, is controlled by, or
is under common control with, the Company) of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended)
of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities but excluding any such
transaction that the Board of Directors determines shall not be a Corporate
Transaction.


4.     Company
Repurchase Right


The Company’s Repurchase
Right shall be exercisable at any time during the ninety (90) day period
following the termination of your service as a Director (the “Share
Repurchase Period”).  Pursuant to
the Repurchase Right, the Company has the right to repurchase all or any
portion of the Shares that have not vested pursuant to the 

















 


terms of the Vesting
Schedule or as a result of your death, Disability or Retirement or the occurrence
of a Corporate Transaction.


The Repurchase Right shall
be exercisable by written notice delivered to you prior to the expiration of
the Share Repurchase Period.  The notice
shall indicate the number of Shares to be repurchased and the date on which the
repurchase is to be effected, such date to be not later than the last day of
the Share Repurchase Period.  On the
date on which the repurchase is to be effected, the Company and/or its assigns
shall pay to you in cash or cash equivalents an amount equal to the lesser of
(a) the purchase price per Share and (b) the fair market value on the date
of repurchase for the unvested Shares which are to be repurchased from the you.


The Repurchase Right shall
terminate with respect to any Shares for which it is not timely exercised.


In the event of any stock
split or stock dividend, any new, substituted or additional securities
distributed with respect to the Shares shall be immediately subject to the
Repurchase Right, but only to the extent the Shares are at the time covered by
such right. 


5.     Federal Tax
Consequences


Set forth below is a brief
summary as of the date of this Agreement of some of the federal tax
consequences of the purchase and disposition of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  YOU SHOULD CONSULT A TAX ADVISER BEFORE PURCHASING OR DISPOSING
OF THE SHARES.


Section 83(b) Election For
Purchase of Share Subject to Vesting.  Because the Shares have not yet vested pursuant to the Vesting
Schedule set forth in this Agreement, under Section 83 of the Internal
Revenue Code (the “Code”) the excess of the fair market value of the
Shares on the date any forfeiture restrictions applicable to the Shares lapse
over the purchase price paid for the Shares will be reportable as ordinary
income on the lapse date.  For this
purpose, the term “forfeiture restrictions” includes the right of the Company
to repurchase the Shares pursuant to the Repurchase Right provided above.  You may elect under Code Section 83(b) to be
taxed at the time the Shares are purchased, rather than when and as the Shares
cease to be subject to the forfeiture restrictions.  Such election (the “83(b) Election”) must be filed with
the Internal Revenue Service within thirty (30) days after the date Shares are
purchased.  If the 83(b) Election is
made, the excess of the fair market value of the Shares on the date of purchase
over the purchase price paid for the Shares will be reportable as ordinary
income.  Even though the fair market
value of the Shares on the date of purchase equals the purchase price paid (and
thus no tax is payable), the 83(b) Election must be made to avoid adverse tax
consequences in the future.  THE FORM
FOR MAKING THIS 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT.  YOU UNDERSTAND THAT FAILURE TO MAKE THIS
FILING WITHIN THE APPLICABLE THIRTY (30)-

















 


DAY PERIOD MAY RESULT IN THE
RECOGNITION OF ORDINARY INCOME BY YOU AS THE FORFEITURE RESTRICTIONS LAPSE.


PLEASE SIGN BUT DO NOT DATE
THE 83(b) ELECTION ATTACHED TO THIS LETTER. 
THE COMPANY WILL FILE THE 83(b) ELECTION ON YOUR BEHALF.  THE ADDRESS OF THE IRS SERVICE CENTER WHERE
YOU FILE YOUR ANNUAL FEDERAL TAX RETURNS IS Fresno, CA 93888-0002.]


YOU ACKNOWLEDGE THAT IT IS
YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY 83(b)
ELECTION UNDER CODE SECTION 83(b), EVEN IF THE COMPANY OR ITS REPRESENTATIVES
MAKE THIS FILING ON YOUR BEHALF.


Disposition of Shares.  If Shares are held for more than one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes.


*   *   *


We thank you for continued
service as a Director of the Company.


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Christopher Dewees

  
	
   

  	
  Christopher Dewees

  
	
   

  	
  General Counsel

  



 


 


Enclosure: Section 83(b) Election


 


 


AGREED TO:


 


 


	
  /s/ Kevin Kennedy

  	
   

  
	
  Kevin Kennedy

  	
   

  



 


Date:  December 21, 2002