1
EXHIBIT 10.10
[LOGO] OPTICAL COATING LABORATORY, INC.
OFFICER: (Label)
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
AGREEMENT made this 30th day of October 1999, between Optical Coating
Laboratory, Inc. ("OCLI"), having its principal place of business at 0000
Xxxxxxxxxx Xxxxxxx, Xxxxx Xxxx, Xxxxxxxxxx, and the Officer referenced on the
label affixed above (hereinafter "Officer").
The purpose of this Agreement is to afford Officer additional security
concerning his or her employment with OCLI by providing for certain termination
payments to Officer in the event that there is a "Change in Control" or "Hostile
Change in Control" as described in the definitions set forth below. The
provisions of this Agreement shall only be effective in the event that there is
a Change in Control or Hostile Change in Control, and nothing in this Agreement
extends or expands Officer's present rights concerning employment with OCLI in
the absence of a Change in Control or Hostile Change in Control.
Based upon the foregoing, and in consideration of Officer's continued
employment with OCLI, OCLI agrees as follows:
1. Term. This Agreement shall be effective as of the date first written
above through November 20, 2001; provided, however, that if a Change in Control
or Hostile Change in Control occurs on or before November 20, 2001, this
Agreement shall remain in effect for two (2) years from the date of occurrence
of a Change in Control or Hostile Change in Control.
2. Termination
(a) Termination by Officer after Occurrence of a Hostile Change
in Control. Officer shall have the right to terminate his or her employment any
time during the period beginning three (3)
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
OCTOBER 30, 1999
1
2
months after the occurrence of a Hostile Change in Control and ending twelve
(12) months after the occurrence of such Hostile Change in Control. If Officer
terminates his or her employment during such time period, Officer shall be paid
an amount equal to the lesser of (i) eighteen (18) months of Officer's maximum
salary in effect within twelve (12) months of termination, or (ii) the maximum
amount payable under Section 280G of the Internal Revenue Code of 1986, as the
same may be amended from time to time (the "Code"), without any portion of such
amount being classified as an "excess parachute payment" within the meaning of
Section 280G(b)(1) of the Code, after taking into account all other "parachute
payments" within the meaning of Section 280G(b)(2) of the Code.
(b) Termination or Constructive Dismissal of Officer after
Occurrence of Change in Control. Except in the case of a Termination for Cause,
if any time within two (2) years after the occurrence of a Change in Control
either (i) OCLI terminates Officer's employment or (ii) Officer terminates his
or her employment following a Constructive Dismissal by OCLI, then Officer shall
be paid an amount equal to the lesser of (A) twenty-four (24) months of
Officer's maximum salary in effect within twelve (12) months of termination, or
(B) the maximum amount payable under Section 280G of the Code, without any
portion of such amount being classified as an "excess parachute payment" within
the meaning of Section 280G(b)(1) of the Code, after taking into account all
other "parachute payments" within the meaning of Section 280G(b)(2) of the Code.
If Officer is entitled to payment under this subparagraph b, Officer shall not
be entitled to payment under subparagraph a.
(c) Time of Payment. OCLI shall pay any amounts due to Officer
upon termination of Officer's employment.
(d) No Other Severance Payments. If Officer receives a payment
under subparagraph 2(a), Officer shall not be entitled to any severance payments
that might otherwise be payable to Officer.
3. Acceleration of Unvested Stock Options. Upon a Change in Control or
Hostile Change of Control as defined herein, the amount of unvested outstanding
stock options held by Officer that shall
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
OCTOBER 30, 1999
2
3
be immediately exercisable shall be the lesser of (i) all unvested outstanding
options or (ii) the maximum number of options that can become immediately
exercisable under Section 280G of the Code, without any of such options giving
rise to an "excess parachute payment" within the meaning of Section 280G(b)(1)
of the Code, after taking into account all other "parachute payments" within the
meaning of Section 280G(b)(2) of the Code. Except in the case of a Termination
for Cause, if any time within two (2) years after the occurrence of a Change in
Control or Hostile Change in Control either (i) OCLI terminates Officer's
employment or (ii) Officer terminates his or her employment following a
Constructive Dismissal by OCLI, then all remaining unvested outstanding options
held by Officer shall be immediately exercisable.
4. Certain Definitions. For purposes of this agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean any person who or which,
together with all Affiliates and Associates of such person, shall be the owner,
beneficial or otherwise, of more than twenty percent (20%) of the shares of
Common Stock of OCLI then outstanding, but shall not include OCLI, any
subsidiary of OCLI or, any employee benefit plan of OCLI or of any subsidiary of
OCLI, or any person or entity organized, appointed or established by OCLI for or
pursuant to the terms of any such plan.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, and in effect
on the date of this Agreement.
(c) "Continuing Director" shall mean (i) any member of the Board
of Directors of OCLI, while such person is a member of the Board prior to the
date of this Agreement, or (ii) any person who subsequently becomes a member of
the Board, while such person is a member of the Board, if such person's
nomination for election or re-election to the Board is recommended or approved
by a majority of the Continuing Directors.
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
OCTOBER 30, 1999
3
4
(d) "Constructive Dismissal by OCLI" shall occur if OCLI demotes
Officer, reduces Officer's duties, decreases Officer's benefits or compensation,
or relocates Officer to a location outside of the community where Officer is
employed as of the date of the Change in Control or Hostile Change in Control.
(e) "Change in Control" shall mean the acquisition of more than
fifty percent (50%) of the shares of Common Stock of OCLI then outstanding by an
Acquiring Person, alone or together with such person's Affiliates or Associates,
including any such acquisitions pursuant to a "reorganization" within the
meaning of Section 181 of the California Corporations Code.
(f) "Hostile Change in Control" shall mean the occurrence of any
of the events described in subparagraph (i) or (ii) below:
(i) acquisition of more than twenty percent (20%) of the
shares of Common Stock of OCLI then outstanding by an Acquiring Person, alone or
together with such person's Affiliates or Associates, including any such
acquisitions pursuant to a "reorganization" within the meaning of Section 181 of
the California Corporations Code, and (B) the adoption by OCLI's Board of
Directors of a resolution (i) disapproving the acquisition in subparagraph
10(f), or (ii) declaring operative the provisions of this Agreement pertaining
to a Change in Control; or
(ii) The failure of a majority of the members of the Board
of Directors of Employer to be Continuing Directors.
(g) "Termination for Cause" shall mean a termination by OCLI
because of a willful breach by Officer in the course of his or her employment,
or in the case of his or her habitual neglect of his or her duties or continuing
incapacity to perform his or her duties.
5. Noncompetition.
(a) In consideration for the covenants of OCLI contained in Section 2
(including, without limitation, OCLI's payment obligations thereunder) and
Section 3, Officer agrees that, in the event that, following a Change in
Control, Officer ceases to be employed by OCLI (or any parent, subsidiary or
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
OCTOBER 30, 1999
4
5
affiliate of OCLI), then for a period of two (2) years after Officer's
employment ceases, Officer shall not do any of the following, either directly or
indirectly:
(i) Carry on or engage in any business that is similar to the
business being conducted by OCLI as of the date on which Officer's employment
ceases (a "Competitive Business"), whether as an employee, officer, contractor,
consultant, investor, shareholder, director, partner, principal, or in any other
individual or representative capacity; provided, however, that the aggregate
ownership by Officer of less than five percent (5%) of the outstanding equity of
any entity which may fit within the foregoing description shall not be deemed to
constitute a violation of this agreement not to compete; or
(ii) Solicit for employment in a Competitive Business (or cause
any person or entity controlled by Officer to so solicit for employment) any
employee, officer, director or consultant of OCLI (or its parent, subsidiaries
or affiliates) or take any action, directly or indirectly, to cause any such
person to terminate his or her business relationship with any of the foregoing;
or
(iii) For or on behalf of a Competitive Business, enter into any
transaction or business relationship with or solicit for any business purpose
any of OCLI's (or its parent's, subsidiaries' or affiliates') customers without
OCLI's prior written consent.
(b) The parties to this Agreement hereby stipulate that:
(i) The non-competition agreement contained herein is intended as
an agreement authorized by Section 16601 of the California Business and
Professions Code as it now exists ("Section 16601");
(ii) The provisions of Section 16601 are incorporated by
reference into this Section;
(iii) All terms used in this Section, including the terms "carry
on" and "business," shall have the same meaning as has been given, up to the
date of this Agreement, to such terms (as they are
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
OCTOBER 30, 1999
5
6
used in Section 16601) by the California Supreme Court and the Courts of Appeal
of the State of California; and
(iv) The remedy at law for any breach of this Section being
inadequate, OCLI shall be entitled, in addition to such other remedies as it may
have, to temporary and injunctive relief for any breach or threatened breach of
any provision of this Section, without proof of any actual damages that have
been or may be caused to it by such breach.
(c) The parties to this Agreement state and agree that this agreement
not to compete is reasonable and necessary to protect OCLI's business interests,
and this agreement not to compete imposes no undue hardship or burden on
Employee. Should any court or tribunal declare the foregoing agreement not to
compete to be unreasonable or void for any reason, the duration and/or
geographic scope of the agreement shall be modified to such shorter duration and
smaller geographic scope as to be upheld by said court or tribunal.
6. Effect of OCLI's Merger, Transfer of Assets or Dissolution. This
Agreement shall not be terminated by any merger or consolidation where OCLI is
not the consolidated or surviving corporation, transfer of substantially all of
the assets of OCLI, or voluntary or involuntary dissolution of OCLI. In the
event of any such merger, consolidation or transfer of assets, the surviving
corporation or the transferee of OCLI's assets shall be bound by the provisions
of this Agreement, and OCLI shall take all actions necessary to insure that such
corporation or transferee is bound by the provisions of this Agreement.
7. Agreement Supersedes Any Inconsistent Prior Agreements or
Understandings. The terms of this Agreement supersede any inconsistent prior
promises, policies, representations, understandings, arrangements or agreements
between the parties.
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
OCTOBER 30, 1999
6
7
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
OPTICAL COATING LABORATORY, INC.
By
-------------------------------------
Xxxxxx X. Xxxx, Corporate Secretary
OFFICER:
------------------------------- ----------
Signature Date
Address:
-------------------------------
-------------------------------
OFFICER
EMPLOYMENT ASSURANCE AGREEMENT
OCTOBER 30, 1999
7
