**Exhibit 10.1****BOOKHAM, INC.****Executive Severance and Retention Agreement**     THIS EXECUTIVE SEVERANCE AND RETENTION AGREEMENT by and between Bookham, Inc., a Delawarecorporation (the “Company”), and                                          (the “Executive”) is made as of                      , 2008(the “Effective Date”).     WHEREAS, the Company and Executive wish to provide for agreed-upon severance arrangements inthe event that the Executive ceases to be an employee of the Company under certain circumstancesprior to any change in control of the Company,     WHEREAS, the Company also recognizes that, as is the case with many publicly-heldcorporations, the possibility of a change in control of the Company exists and that suchpossibility, and the uncertainty and questions which it may raise among key personnel, may resultin the departure or distraction of key personnel to the detriment of the Company and itsstockholders, and     WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Board”) hasdetermined that appropriate steps should be taken to reinforce and encourage the continuedemployment and dedication of the Company’s key personnel without distraction from the possibilityof termination under certain circumstances or a change in control of the Company and related eventsand circumstances.     NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in itsemploy, the Company agrees that the Executive shall receive the severance benefits set forth inthis Agreement under the terms and subject to the provisions, provided below.     1. Key Definitions.     As used herein, the following terms shall have the following respective meanings:          1.1 “Cause” means:               (a) the Executive’s willful and continued failure to substantially performExecutive’s reasonable assigned duties as an officer of the Company (other than any suchfailure resulting from incapacity due to physical or mental illness or any failure afterthe Executive gives notice of termination for Good Reason), which failure is not curedwithin 30 days after a written demand for substantial performance is received by theExecutive from the Board of Directors of the Company that specifically identifies themanner in which the Board of Directors believes the Executive has not substantiallyperformed the Executive’s duties; *provided that,*for purposes of Section 3.1, for allExecutives other than the Chief Executive Officer (“CEO”), substantial performance shallbe determined by the CEO and such written demand for substantial performance shall beprovided by the CEO; or
 

 
               (b) the Executive’s willful engagement in illegal conduct or gross misconduct whichis materially and demonstrably injurious to the Company.     For purposes of this Section 1.1, no act or failure to act by the Executive shall beconsidered “willful” unless it is done, or omitted to be done, in bad faith and without reasonablebelief that the Executive’s action or omission was in the best interests of the Company.          1.2 “Change in Control” means an event or occurrence set forth in any one or more ofsubsections (a) through (d) below (including an event or occurrence that constitutes a Change inControl under one of such subsections but is specifically exempted from another such subsection):               (a) the acquisition by an individual, entity or group (within the meaning ofSection 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 theCompany if, after such acquisition, such Person beneficially owns (within the meaning ofRule 13d-3 promulgated under the Exchange Act) 30% or more of either (x) thethen-outstanding shares of common stock of the Company (the “Outstanding Company CommonStock”) or (y) the combined voting power of the then-outstanding securities of theCompany entitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”); *provided, however*, that for purposes of this subsection(a), the following acquisitions shall not constitute a Change in Control: (i) anyacquisition directly from the Company (excluding an acquisition pursuant to theexercise, conversion or exchange of any security exercisable for, convertible into orexchangeable for common stock or voting securities of the Company, unless the Personexercising, converting or exchanging such security acquired such security directly fromthe Company or an underwriter or agent of the Company), (ii) any acquisition by theCompany, (iii) any acquisition by any employee benefit plan (or related trust) sponsoredor maintained by the Company or any corporation controlled by the Company, or (iv) anyacquisition by any corporation pursuant to a transaction which complies with clauses (i)and (ii) of subsection (c) of this Section 1.2; or               (b) such time as the Continuing Directors (as defined below) do not constitute amajority of the Board (or, if applicable, the Board of Directors of a successorcorporation to the Company), where the term “Continuing Director” means at any date amember of the Board (i) who was a member of the Board on the date of the execution ofthis Agreement or (ii) who was nominated or elected subsequent to such date by at leasta majority of the directors who were Continuing Directors at the time of such nominationor election or whose election to the Board was recommended or endorsed by at least amajority of the directors who were Continuing Directors at the time of such nominationor election; *provided, however*, that there shall be excluded from this clause (ii) anyindividual whose initial assumption of office occurred as a result of an actual orthreatened election contest with respect to the election or removal of directors orother actual or threatened solicitation of proxies or consents, by or on behalf of aperson other than the Board; or
-2-

 
               (c) the consummation of a merger, consolidation, reorganization, recapitalizationor statutory share exchange involving the Company or a sale or other disposition of allor substantially all of the assets of the Company in one or a series of transactions (a“Business Combination”), unless, immediately following such Business Combination, eachof the following two conditions is satisfied: (i) all or substantially all of theindividuals and entities who were the beneficial owners of the Outstanding CompanyCommon Stock and Outstanding Company Voting Securities immediately prior to suchBusiness Combination beneficially own, directly or indirectly, more than 50% of thethen-outstanding shares of common stock and the combined voting power of thethen-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 suchtransaction owns the Company or substantially all of the Company’s assets eitherdirectly or through one or more subsidiaries) (such resulting or acquiring corporationis referred to herein as the “Acquiring Corporation”) in substantially the sameproportions as their ownership, immediately prior to such Business Combination, of theOutstanding Company Common Stock and Outstanding Company Voting Securities,respectively; and (ii) no Person (excluding any employee benefit plan (or related trust)maintained or sponsored by the Company or by the Acquiring Corporation) beneficiallyowns, directly or indirectly, 30% or more of the then outstanding shares of common stockof the Acquiring Corporation, or of the combined voting power of the then-outstandingsecurities 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); or               (d) approval by the stockholders of the Company of a complete liquidation ordissolution of the Company.          1.3 “Change in Control Date” means the first date during the Term (as defined inSection 2) on which a Change in Control occurs. Anything in this Agreement to the contrarynotwithstanding, if (a) a Change in Control occurs, (b) the Executive’s employment with theCompany is terminated prior to the date on which the Change in Control occurs, and (c) it isreasonably demonstrated by the Executive that such termination of employment (i) was at the requestof a third party who has taken steps reasonably calculated to effect a Change in Control or (ii)otherwise arose in connection with or in anticipation of a Change in Control, then for all purposesof this Agreement the “Change in Control Date” shall mean the date immediately prior to the date ofsuch termination of employment.          1.4 “Disability” means the Executive’s absence from the full-time performance of theExecutive’s duties with the Company for 180 consecutive calendar days as a result of incapacity dueto mental or physical illness which is determined to be total and permanent by a physician selectedby the Company or its insurers and acceptable to the Executive or the Executive’s legalrepresentative.          1.5 “Good Reason” means the occurrence, without the Executive’s written consent, ofany of the events or circumstances set forth in clauses (a) through (f) below.
-3-

 
Notwithstanding the occurrence of any such event or circumstance, such occurrence shall not bedeemed to constitute Good Reason if, prior to the Date of Termination specified in the Notice ofTermination (each as defined in Section 4.1(a)) given by the Executive in respect thereof, suchevent or circumstance has been fully corrected and the Executive has been reasonably compensatedfor any losses or damages resulting therefrom (*provided that*such right of correction by theCompany shall only apply to the first Notice of Termination for Good Reason given by theExecutive).               (a) the assignment to the Executive of duties inconsistent in any material respectwith the Executive’s position (including status, offices, titles and reportingrequirements), authority or responsibilities in effect immediately prior to the earliestto occur of (i) the Change in Control Date, (ii) the date of the execution by theCompany of the initial written agreement or instrument providing for the Change inControl or (iii) the date of the adoption by the Board of Directors of a resolutionproviding for the Change in Control (with the earliest to occur of such dates referredto herein as the “Measurement Date”), or any other action or omission by the Companywhich results in a material diminution in such position, authority or responsibilities;               (b) a reduction in the Executive’s annual base salary as in effect on theMeasurement Date or as the same was or may be increased thereafter from time to time;               (c) the failure by the Company to (i) continue in effect any material compensationor benefit plan or program (including without limitation any life insurance, medical,health and accident or disability plan and any vacation or automobile program or policy)(a “Benefit Plan”) in which the Executive participates or which is applicable to theExecutive immediately prior to the Measurement Date, unless an equitable arrangement(embodied in an ongoing substitute or alternative plan) has been made with respect tosuch plan or program, (ii) continue the Executive’s participation therein (or in suchsubstitute or alternative plan) on a basis not materially less favorable, both in termsof the amount of benefits provided and the level of the Executive’s participationrelative to other participants, than the basis existing immediately prior to theMeasurement Date or (iii) award cash bonuses to the Executive in amounts and in a mannersubstantially consistent with past practice in light of the Company’s financialperformance;               (d) a change by the Company in the location at which the Executive performsExecutive’s principal duties for the Company to a new location that is both (i) outsidea radius of 35 miles from the Executive’s principal residence immediately prior to theMeasurement Date and (ii) more than 20 miles from the location at which the Executiveperformed Executive’s principal duties for the Company immediately prior to theMeasurement Date; or a requirement by the Company that the Executive travel on Companybusiness to a substantially greater extent than required immediately prior to theMeasurement Date;
-4-

 
               (e) the failure of the Company to obtain the agreement from any successor to theCompany to assume and agree to perform this Agreement, as required by Section 6.1; or               (f) any material breach by the Company of this Agreement or any employmentagreement with the Executive.     2. Term of Agreement. This Agreement, and all rights and obligations of the partieshereunder, shall take effect upon the Effective Date and shall expire upon the first to occur of(a) the expiration of the Term (as defined below) if a Change in Control has not occurred duringthe Term, (b) the termination of the Executive’s employment with the Company prior to theexpiration of the Term, other than by reason of a termination by the Company without Cause, (c) thefulfillment by the Company of all of its obligations under Section 3 if the Executive’s employmentwith the Company is terminated without Cause prior to a Change in Control, (d) the date 12 monthsafter the Change in Control Date, if the Executive is still employed by the Company as of suchlater date, or (e) the fulfillment by the Company of all of its obligations under Section 4 if theExecutive’s employment with the Company terminates within 12 months following the Change in ControlDate. “Term” shall mean the period commencing as of the Effective Date and continuing in effectthrough December 31, 2011; *provided, however*, that commencing on January 1**,**2012 and each January 1thereafter, the Term shall be automatically extended for one additional year unless, not later than90 days prior to the scheduled expiration of the Term (or any extension thereof), the Company shallhave given the Executive written notice that the Term will not be extended.     3. Benefits Prior to a Change in Control.          3.1 Termination of Employment without Cause. Subject to Section 4.4, in the eventthat the Executive’s employment is terminated because of the death of the Executive or by theCompany without Cause at any time prior to a Change in Control (such date of termination or death,the “Section 3 Date of Termination”), the Executive (or Executive’s heirs) shall be entitled to thefollowing aggregate benefits:               (a) The sum of (i) the Executive’s Target bonus approved by the Company’sCompensation Committee for the then current bonus payment period, multiplied by afraction, the numerator of which is the number of days preceding the Section 3 Date ofTermination in the current bonus period and the denominator of which is the total numberof days in the current bonus period, (ii) any prior period bonus approved by the Boardbut not paid, (iii) the amount of any compensation previously deferred by the Executive(together with any accrued interest or earnings thereon) and any accrued vacation pay,in each case to the extent not previously paid (the sum of the amounts described inclauses (i), (ii) and (iii) shall be hereinafter referred to as “Accrued Obligations”),payable in a lump sum in cash within 30 days of the Section 3 Date of Termination;               (b) An amount equal to Executive’s base salary then in effect multiplied by afraction, the numerator of which shall be (i) the sum of eight (8) plus one (1) for eachwhole year of the Executive’s employment by the Company, but in no event more
-5-

 
than eighteen (18), measured from the Section 3 Date of Termination (the “Section 3Termination Payment Period”), and (ii) the denominator of which shall be 12, whichamount shall be paid as a lump sum cash payment basis within 30 days of the Section 3Date of Termination. Existing option, restricted stock and other equity awards willcontinue to be governed by the terms of their respective grants and plan provisions.          3.2 Release. The payment to the Executive (or Executive’s heirs) of the amounts andbenefits payable under this Section 3 shall (x) be contingent upon the execution by the Executive(or Executive’s heirs) of a separation agreement and release in a form reasonably acceptable to theCompany and substantially as set forth in ***Exhibit A***to this Agreement (the “Executive Release”) andupon the Executive Release becoming effective in accordance with its terms, (y) agreement by theExecutive to standard confidentiality obligations, a non-solicitation of Company customers forsix-months following the Section 3 Date of Termination and a non-solicitation of Company employeesfor twelve-months following the Section 3 Date of Termination and (y) shall constitute the soleremedy of the Executive’s employment in the circumstances set forth in this Section 3.     4. Termination after a Change in Control.          4.1 Termination of Employment.               (a) If the Change in Control Date occurs during the Term, any termination of theExecutive’s employment by the Company or by the Executive within 12 months following theChange in Control Date or termination due the Executive’s death within 12 monthsfollowing the Change in Control Date, shall be communicated by a written notice to theother party hereto (the “Notice of Termination”), given in accordance with Section 7.Any Notice of Termination shall: (i) indicate the specific termination provision (ifany) of this Agreement relied upon by the party giving such notice, (ii) to the extentapplicable, set forth in reasonable detail the facts and circumstances claimed toprovide a basis for termination of the Executive’s employment under the provision soindicated and (iii) specify the Date of Termination (as defined below). The effectivedate of an employment termination (the “Date of Termination”) shall be (I) the close ofbusiness on the date specified in the Notice of Termination (which date may not be lessthan 15 days or more than 120 days after the date of delivery of such Notice ofTermination) or (II) the date of the Executive’s death. In the event the Company failsto satisfy the requirements of Section 4.1(a) regarding a Notice of Termination, thepurported termination of the Executive’s employment pursuant to such Notice ofTermination shall not be effective for purposes of this Agreement.               (b) The failure by the Executive or the Company to set forth in the Notice ofTermination any fact or circumstance which contributes to a showing of Good Reason orCause shall not waive any right of the Executive or the Company, respectively, hereunderor preclude the Executive or the Company, respectively, from asserting any such fact orcircumstance in enforcing the Executive’s or the Company’s rights hereunder.
-6-

 
               (c) Any Notice of Termination for Cause given by the Company must be given within90 days of the occurrence of the event(s) or circumstance(s) which constitute(s) Cause.Prior to any Notice of Termination for Cause being given (and prior to any terminationfor Cause being effective), the Executive shall be entitled to a hearing before theBoard of Directors of the Company at which the Executive may, at the Executive’selection, be represented by counsel and at which Executive shall have a reasonableopportunity to be heard. Such hearing shall be held on not less than 15 days priorwritten notice to the Executive stating the Board of Directors’ intention to terminatethe Executive for Cause and stating in detail the particular event(s) or circumstance(s)which the Board of Directors believes constitutes Cause for termination.               (d) Any Notice of Termination for Good Reason given by the Executive must be givenwithin 90 days of the occurrence of the event(s) or circumstance(s) that constitute(s)Good Reason.          4.2 Benefits to Executive.               4.2.1. Stock Acceleration. If the Change in Control Date occurs during theTerm, then, effective upon the Change in Control Date or the Executive’s death, (a) eachoutstanding option to purchase shares of Common Stock of the Company held by the Executive (orExecutive’s heirs) shall become immediately exercisable in full and shares of Common Stock of theCompany received upon exercise of any options will no longer be subject to a right of repurchase bythe Company, (b) each outstanding restricted stock award or restricted stock unit shall be deemedto be fully vested and will no longer be subject to a right of repurchase by the Company and (c)notwithstanding any provision in any applicable option agreement to the contrary, each such optionshall continue to be exercisable by the Executive (to the extent such option was exercisable on theDate of Termination) for a period of six months following the Date of Termination.               4.2.2. Compensation. If the Change in Control Date occurs during the Term and theExecutive’s employment with the Company terminates within 12 months following the Change in ControlDate, the Executive shall be entitled to the following additional benefits:               (a) Termination Without Cause or for Good Reason. Subject to Section 4.4,if the Executive’s employment with the Company is terminated by the Company (other thanfor Cause or by the Executive for Good Reason within 12 months following the Change inControl Date, then the Executive shall be entitled to a lump sum payment in cash, within30 days after the Date of Termination, of the aggregate of the following amounts:                         (1) the Accrued Obligations and                         (2) the amount equal to Executive’s base salary then in effect multiplied by a fraction, thenumerator of which shall be (a) the sum of eight months plus one additional month for each wholeyear of the Executive’s employment by the Company, but
-7-

 
in no event more than eighteen months, measured on the Termination Date (the “TerminationPayment Period”), and (b) the denominator of which shall be 12..               (b) Resignation Without Good Reason or Disability. Subject to Section 4.4,if the Executive voluntarily terminates Executive’s employment with the Companyfollowing the Change in Control Date, excluding a termination for Good Reason, or if theExecutive’s employment with the Company is terminated by reason of the Executive’sDisability, then the Company shall pay the Executive in a lump sum in cash within 30days after the Date of Termination, the Accrued Obligations.          4.3 Taxes.               (a) Notwithstanding any other provision of this Agreement, except as set forth inSection 4.3(b), in the event that the Company undergoes a “Change in Ownership orControl” (as defined below), the Company shall not be obligated to provide to theExecutive a portion of any “Contingent Compensation Payments” (as defined below) thatthe Executive would otherwise be entitled to receive to the extent necessary toeliminate any “excess parachute payments” (as defined in Section 280G(b)(1) of theInternal Revenue Code of 1986, as amended (the “Code”)) for the Executive. For purposesof this Section 4.3, the Contingent Compensation Payments so eliminated shall bereferred to as the “Eliminated Payments” and the aggregate amount (determined inaccordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision)of the Contingent Compensation Payments so eliminated shall be referred to as the“Eliminated Amount.”               (b) Notwithstanding the provisions of Section 4.3(a), no such reduction inContingent Compensation Payments shall be made if (i) the Eliminated Amount (computedwithout regard to this sentence) exceeds (ii) 110% of the aggregate present value(determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-31 and Q/A-32or any successor provisions) of the amount of any additional taxes that would beincurred by the Executive if the Eliminated Payments (determined without regard to thissentence) were paid to Executive (including, state and federal income taxes on theEliminated Payments, the excise tax imposed by Section 4999 of the Code payable withrespect to all of the Contingent Compensation Payments in excess of the Executive’s“base amount” (as defined in Section 280G(b)(3) of the Code), and any withholdingtaxes). The override of such reduction in Contingent Compensation Payments pursuant tothis Section 4.3(b) shall be referred to as a “Section 4.3(b) Override.” For purpose ofthis paragraph, if any federal or state income taxes would be attributable to thereceipt of any Eliminated Payment, the amount of such taxes shall be computed bymultiplying the amount of the Eliminated Payment by the maximum combined federal andstate income tax rate provided by law.
-8-

 
               (c) For purposes of this Section 4.3 the following terms shall have the followingrespective meanings:               (i) “Change in Ownership or Control” shall mean a change in the ownership or effective controlof the Company or in the ownership of a substantial portion of the assets of the Company determinedin accordance with Section 280G(b)(2) of the Code.               (ii) “Contingent Compensation Payment” shall mean any payment (or benefit) in the nature ofcompensation that is made or made available (under this Agreement or otherwise) to a “disqualifiedindividual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaningof Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company.               (d) Any payments or other benefits otherwise due to the Executive following aChange in Ownership or Control that could reasonably be characterized (as determined bythe Company) as Contingent Compensation Payments (the “Potential Payments”) shall not bemade until the dates provided for in this Section 4.3(d). Within 30 days after eachdate on which the Executive first becomes entitled to receive (whether or not then due)a Contingent Compensation Payment relating to such Change in Ownership or Control, theCompany shall determine and notify the Executive (with reasonable detail regarding thebasis for its determinations) (i) which Potential Payments constitute ContingentCompensation Payments, (ii) the Eliminated Amount and (iii) whether the Section 4.3(b)Override is applicable. Within 30 days after delivery of such notice to the Executive,the Executive shall deliver a response to the Company (the “Executive Response”) statingeither (A) that Executive agrees with the Company’s determination pursuant to thepreceding sentence, in which case Executive shall indicate, if applicable, whichContingent Compensation Payments, or portions thereof (the aggregate amount of which,determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or anysuccessor provision, shall be equal to the Eliminated Amount), shall be treated asEliminated Payments or (B) that Executive disagrees with such determination, in whichcase Executive shall set forth (i) which Potential Payments should be characterized asContingent Compensation Payments, (ii) the Eliminated Amount, (iii) whether the Section4.3(b) Override is applicable, and (iv) which (if any) Contingent Compensation Payments,or portions thereof (the aggregate amount of which, determined in accordance withTreasury Regulation Section 1.280G-1, Q/A-30 or any successor provision, shall be equalto the Eliminated Amount, if any), shall be treated as Eliminated Payments. In theevent that the Executive fails to deliver an Executive Response on or before therequired date, the Company’s initial determination shall be final and the ContingentCompensation Payments that shall be treated as Eliminated Payments shall be determinedby the Company in its absolute discretion. If the Executive states in the ExecutiveResponse that Executive agrees with the Company’s determination, the Company shall makethe Potential Payments to the Executive within three business days following delivery tothe Company of the Executive Response (except for any Potential Payments which are notdue to be made until after such date, which Potential Payments shall be made on the dateon which they are due). If the Executive states in the Executive Response thatExecutive
-9-

 
disagrees with the Company’s determination, then, for a period of 60 days followingdelivery of the Executive Response, the Executive and the Company shall use good faithefforts to resolve such dispute. The Company shall, within three business days followingdelivery to the Company of the Executive Response, make to the Executive those PotentialPayments as to which there is no dispute between the Company and the Executive regardingwhether they should be made (except for any such Potential Payments which are not due tobe made until after such date, which Potential Payments shall be made on the date onwhich they are due). The balance of the Potential Payments shall be made within threebusiness days following the resolution of such dispute. Subject to the limitationscontained in Sections 4.3(a) and (b) hereof, the amount of any payments to be made tothe Executive following the resolution of such dispute shall be increased by amount ofthe accrued interest thereon computed at the prime rate announced from time to time byThe Bank of America, compounded monthly from the date that such payments originally weredue.               (e) The provisions of this Section 4.3 are intended to apply to any and allpayments or benefits available to the Executive under this Agreement or any otheragreement or plan of the Company under which the Executive receives ContingentCompensation Payments.          4.4 Payments subject to Section 409A.               (a) Subject to this Section 4.4, payments or benefits under Sections 3.1 and 4.2.2shall begin only upon the date of a “separation from service” of the Executive(determined as set forth below) which occurs on or after the termination of theExecutive’s employment. The following rules shall apply with respect to distribution ofthe payments and benefits, if any, to be provided to the Executive under Sections 3.1and 4.2.2, as applicable:               (i) It is intended that each installment of the payments and benefits provided under Sections3.1 and 4.2.2 shall be treated as a separate “payment” for purposes of Section 409A of the Code andthe guidance issued thereunder (“Section 409A”). Neither the Company nor the Executive shall havethe right to accelerate or defer the delivery of any such payments or benefits except to the extentspecifically permitted or required by Section 409A.               (ii) If, as of the date of the “separation from service” of the Executive from the Company,the Executive is not a “specified employee” (within the meaning of Section 409A), then eachinstallment of the payments and benefits shall be made on the dates and terms set forth in Sections3.1 and 4.2.2.               (iii) If, as of the date of the “separation from service” of the Executive from the Company,the Executive is a “specified employee” (within the meaning of Section 409A), then:                         (1) Each installment of the payments and benefits due under Sections 3.1 and 4.2.2 that, inaccordance with the dates and terms set forth herein, will in
-10-

 
all circumstances, regardless of when the separation from service occurs, be paid within theShort-Term Deferral Period (as hereinafter defined) shall be treated as a short-term deferralwithin the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissibleunder Section 409A. For purposes of this Agreement, the “Short-Term Deferral Period” means theperiod ending on the later of the 15th day of the third month following the end of theExecutive’s tax year in which the separation from service occurs and the 15th day ofthe third month following the end of the Company’s tax year in which the separation from serviceoccurs; and                         (2) Each installment of the payments and benefits due under Sections 3.1 and 4.2.2 that isnot described in Section 4.4(a)(iii)(1) and that would, absent this subsection, be paid within thesix-month period following the “separation from service” of the Executive from the Company shallnot be paid until the date that is six months and one day after such separation from service (or,if earlier, the Executive’s death), with any such installments that are required to be delayedbeing accumulated during the six-month period and paid in a lump sum on the date that is sixmonths and one day following the Executive’s separation from service and any subsequentinstallments, if any, being paid in accordance with the dates and terms set forth herein;*provided, however*, that the preceding provisions of this sentence shall not apply to anyinstallment of payments and benefits if and to the maximum extent that that such installment isdeemed to be paid under a separation pay plan that does not provide for a deferral of compensationby reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separationpay upon an involuntary separation from service). Any installments that qualify for the exceptionunder Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day ofthe Executive’s second taxable year following Executive’s taxable year in which the separationfrom service occurs.               (b) The determination of whether and when a separation from service of theExecutive from the Company has occurred shall be made and in a manner consistent with,and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).Solely for purposes of this Section 4.4(b), “Company” shall include all persons withwhom the Company would be considered a single employer under Section 414(b) and 414(c)of the Code.               (c) All reimbursements and in-kind benefits provided under the Agreement shall bemade or provided in accordance with the requirements of Section 409A to the extent thatsuch reimbursements or in-kind benefits are subject to Section 409A.          4.5 Release. The obligation of the Company to make the payments and provide thebenefits to the Executive under Sections 4.2(a)(i)(2) and 4.2(a)(ii) is conditioned upon (a) theExecutive (or Executive’s heirs) signing the Executive Release, and (b) agreement by the Executiveto (i) a non-solicitation of Company customers for six-months following the Change of Control, (ii)a non-solicitation of Company employees for twelve months following the Change of Control and (iii)standard confidentiality obligations. The Company shall not be obligated to make any payments tothe Executive under Section 4.2(a)(i)(2) until the Executive Release has become effective; *providedthat*at such time as the Executive Release becomes effective, the Company shall promptly pay to theExecutive any payments that would otherwise
-11-

 
have been made to the Executive between the Date of Termination and date on which theExecutive Release becomes effective.     5. Disputes.          5.1 Settlement of Disputes. All claims by the Executive for benefits under Section 4of this Agreement shall be directed to and determined by the Board of Directors of the Company andshall be in writing. Any denial by the Board of Directors of a claim for benefits under thisAgreement shall be delivered to the Executive in writing and shall set forth the specific reasonsfor the denial and the specific provisions of this Agreement relied upon. The Board of Directorsshall afford a reasonable opportunity to the Executive for a review of the decision denying aclaim.          5.2 Expenses. The Company agrees to pay as incurred, to the full extent permitted bylaw, all legal, accounting and other fees and expenses which the Executive may reasonably incur asa result of any claim or contest by the Company, the Executive or others regarding the validity orenforceability of, or liability under, Section 4 of this Agreement or any guarantee of performancethereof (including as a result of any contest by the Executive regarding the amount of any paymentor benefits pursuant to this Agreement), plus in each case interest on any delayed payment at theapplicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; *provided that*Executiveprevails in the outcome of such claim or contest. Notwithstanding the foregoing, (i) the expenseseligible for reimbursement may not affect the expenses eligible for reimbursement in any othertaxable year, (ii) such reimbursement must be made on or before the last day of the year followingthe year in which the expenses were incurred, and (iii) the right to reimbursement is not subjectto liquidation or exchange for another benefit.          5.3 Compensation During a Dispute. If the Change in Control Date occurs during theTerm and the Executive’s employment with the Company terminates within 12 months following theChange in Control Date, and the right of the Executive to receive benefits under Section 4 (or theamount or nature of the benefits to which Executive is entitled to receive) are the subject of adispute between the Company and the Executive, the Company shall continue (a) to pay Executive, theExecutive’s base salary in effect as of the Measurement Date and (b) to provide benefits to theExecutive and the Executive’s family at least equal to those which would have been provided tothem, if the Executive’s employment had not been terminated, in accordance with the applicableBenefit Plans in effect on the Measurement Date, until such dispute is resolved either by mutualwritten agreement of the parties or by final adjudication. Following the resolution of suchdispute, the sum of the payments made to the Executive under clause (a) of this Section 5.3 shallbe deducted from any cash payment which the Executive is entitled to receive pursuant to Section 4;and if such sum exceeds the amount of the cash payment which the Executive is entitled to receivepursuant to Section 4, the excess of such sum over the amount of such payment shall be repaid(without interest) by the Executive to the Company within 60 days of the resolution of suchdispute.     6. Successors.
-12-

 
          6.1 Successor to Company. The Company shall require any successor (whether direct orindirect, by purchase, merger, consolidation or otherwise) to all or substantially all of thebusiness or assets of the Company expressly to assume and agree to perform this Agreement to thesame extent that the Company would be required to perform it if no such succession had taken place.Failure of the Company to obtain an assumption of this Agreement at or prior to the effectivenessof any succession shall be a breach of this Agreement and shall constitute Good Reason if theExecutive elects to terminate employment, except that for purposes of implementing the foregoing,the date on which any such succession becomes effective shall be deemed the Date of Termination.As used in this Agreement, “Company” shall mean the Company as defined above and any successor toits business or assets as aforesaid which assumes and agrees to perform this Agreement, byoperation of law or otherwise.          6.2 Successor to Executive. This Agreement shall inure to the benefit of and beenforceable by the Executive’s personal or legal representatives, executors, administrators,successors, heirs, distributees, devisees and legatees. If the Executive should die while anyamount would still be payable to the Executive or Executive’s family hereunder if the Executive hadcontinued to live, all such amounts, unless otherwise provided herein, shall be paid in accordancewith the terms of this Agreement to the executors, personal representatives or administrators ofthe Executive’s estate.     7. Notice. All notices, instructions and other communications given hereunder or inconnection herewith shall be in writing. Any such notice, instruction or communication shall besent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii)prepaid via a reputable nationwide overnight courier service, in each case addressed to theCompany, at 2584 Junction Avenue, San Jose, CA 95134, Attn: General Counsel, and to the Executiveat the Executive’s address indicated on the signature page of this Agreement (or to such otheraddress as either the Company or the Executive may have furnished to the other in writing inaccordance herewith). Any such notice, instruction or communication shall be deemed to have beendelivered five business days after it is sent by registered or certified mail, return receiptrequested, postage prepaid, or one business day after it is sent via a reputable nationwideovernight courier service. Either party may give any notice, instruction or other communicationhereunder using any other means, but no such notice, instruction or other communication shall bedeemed to have been duly delivered unless and until it actually is received by the party for whomit is intended.     8. Miscellaneous.          8.1 Employment by Subsidiary. For purposes of this Agreement, the Executive’semployment with the Company shall not be deemed to have terminated solely as a result of theExecutive continuing to be employed by a wholly-owned subsidiary of the Company.          8.2 Severability. The invalidity or unenforceability of any provision of thisAgreement shall not affect the validity or enforceability of any other provision of this Agreement,which shall remain in full force and effect.
-13-

 
          8.3 Injunctive Relief. The Company and the Executive agree that any breach of thisAgreement by the Company is likely to cause the Executive substantial and irrevocable damage andtherefore, in the event of any such breach, in addition to such other remedies which may beavailable, the Executive shall have the right to specific performance and injunctive relief.          8.4 Exclusive Severance Benefits. The making of the payments and the provision of thebenefits by the Company to the Executive under this Agreement shall constitute the entireobligation of the Company to the Executive as a result of the termination of Executive’semployment, and the Executive shall not be entitled to additional payments or benefits as a resultof such termination of employment under any other plan, program, policy, practice, contract oragreement of the Company or its subsidiaries.          8.5 Mitigation. The Executive shall not be required to mitigate the amount of anypayment or benefits provided for in Sections 3.1 and 4.2.2 by seeking other employment orotherwise. Further, except as provided in Sections 3.1(c) and 4.2.2(a)(ii), the amount of anypayment or benefits provided for in this Agreement shall not be reduced by any compensation earnedby the Executive as a result of employment by another employer, by retirement benefits, by offsetagainst any amount claimed to be owed by the Executive to the Company or otherwise.          8.6 Not an Employment Contract. The Executive acknowledges that this Agreement doesnot constitute a contract of employment or impose on the Company any obligation to retain theExecutive as an employee and that this Agreement does not prevent the Executive from terminatingemployment at any time. If the Executive’s employment with the Company terminates for any reasonand subsequently a Change in Control shall occur, the Executive shall not be entitled to anybenefits hereunder except as otherwise provided pursuant to Section 1.3.          8.7 Governing Law. The validity, interpretation, construction and performance of thisAgreement shall be governed by the internal laws of the State of Delaware, without regard toconflicts of law principles.          8.8 Waivers. No waiver by the Executive at any time of any breach of, or compliancewith, any provision of this Agreement to be performed by the Company shall be deemed a waiver ofthat or any other provision at any subsequent time.          8.9 Counterparts. This Agreement may be executed in counterparts, each of which shallbe deemed to be an original but both of which together shall constitute one and the sameinstrument.          8.10 Tax Withholding. Any payments provided for hereunder shall be paid net of anyapplicable tax withholding required under federal, state or local law.          8.11 Entire Agreement. This Agreement sets forth the entire agreement of the partieshereto in respect of the subject matter contained herein and supersedes all prior agreements,promises, covenants, arrangements, communications, representations or warranties, whether oral orwritten, by any officer, employee or representative of any party hereto in respect of the subjectmatter contained herein; and any prior agreement of the parties hereto in respect of the subjectmatter contained herein is hereby terminated and cancelled.
-14-

 
          8.12 Amendments. This Agreement may be amended or modified only by a writteninstrument executed by both the Company and the Executive.          8.13 Executive’s Acknowledgements. The Executive acknowledges that Executive: (a) hasread this Agreement; (b) has been represented in the preparation, negotiation, and execution ofthis Agreement by legal counsel of the Executive’s own choice or has voluntarily declined to seeksuch counsel; (c) understands the terms and consequences of this Agreement; and (d) understandsthat the law firm of WilmerHale is acting as counsel to the Company in connection with thetransactions contemplated by this Agreement, and is not acting as counsel for the Executive.          8.14 Section 409A. This Agreement is intended to comply with the provisions ofSection 409A and the Agreement shall, to the extent practicable, be construed in accordancetherewith. The Company makes no representation or warranty and shall have no liability to theExecutive or any other person if any provisions of this Agreement are determined to constitutedeferred compensation subject to Section 409A and do not satisfy an exemption from, or theconditions of, Section 409A.*Remainder of Page Intentionally Blank*
-15-

 
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and yearfirst set forth above.      **Bookham Inc.**