Exhibit 10.2

 

[g117471kci001.jpg]

20415 Nordhoff Street

 

Chatsworth, California 91311

 

June 8, 2010

 

Mr. Dilip Singh

at the address on file with

MRV Communications, Inc.

 

Dear Dilip:

 

The purpose of this letter (the “Letter Agreement”) is to acknowledge and set
forth the terms and conditions of your employment with MRV Communications, Inc.,
a Delaware corporation (the “Company,” which term, to the extent the context
requires or is otherwise appropriate, will also include any subsidiaries or
affiliates of the entity).  Your employment with the Company under this Letter
Agreement will commence on July 1, 2010 (the “Employment Commencement Date”).

 

1.             POSITION; DUTIES AND RESPONSIBILITIES; OTHER ACTIVITIES;
LOCATION.

 

(A)           POSITION; DUTIES AND RESPONSIBILITIES.  WHILE YOU ARE EMPLOYED BY
THE COMPANY, YOU WILL SERVE ON AN INTERIM BASIS AS THE CHIEF EXECUTIVE OFFICER
OF THE COMPANY AND WILL REPORT TO THE BOARD OF DIRECTORS OF THE COMPANY (THE
“BOARD”).  YOU WILL HAVE SUCH DUTIES AND RESPONSIBILITIES AS ARE COMMENSURATE
WITH YOUR POSITION AND SUCH OTHER DUTIES AND RESPONSIBILITIES COMMENSURATE WITH
YOUR POSITION AS ARE FROM TIME TO TIME ASSIGNED TO YOU BY THE BOARD (OR A
COMMITTEE THEREOF).

 

(B)           OTHER ACTIVITIES. WHILE YOU ARE EMPLOYED BY THE COMPANY, YOU WILL
DEVOTE YOUR FULL BUSINESS TIME, ENERGY AND SKILL TO THE PERFORMANCE OF YOUR
DUTIES AND RESPONSIBILITIES HEREUNDER, PROVIDED THE FOREGOING WILL NOT PREVENT
YOU FROM (1) SERVING AS A NON-EXECUTIVE DIRECTOR ON THE BOARD OF DIRECTORS OF
NON-PROFIT ORGANIZATIONS AND, WITH THE PRIOR WRITTEN APPROVAL OF THE BOARD,
OTHER COMPANIES, (2) PARTICIPATING IN CHARITABLE, CIVIC, EDUCATIONAL,
PROFESSIONAL, COMMUNITY OR INDUSTRY AFFAIRS OR (3) MANAGING YOUR AND YOUR
FAMILY’S PASSIVE PERSONAL INVESTMENTS; PROVIDED SUCH ACTIVITIES INDIVIDUALLY OR
IN THE AGGREGATE DO NOT INTERFERE OR CONFLICT WITH YOUR DUTIES AND
RESPONSIBILITIES HEREUNDER OR CREATE A POTENTIAL BUSINESS OR FIDUCIARY CONFLICT.

 

(C)           LOCATION.  THE COMPANY ACKNOWLEDGES AND AGREES THAT YOU WILL
PERFORM YOUR DUTIES AND RESPONSIBILITIES IN VARIOUS GEOGRAPHIC LOCATIONS AND
THAT YOUR PRIMARY WORK LOCATION WILL BE AT YOUR CURRENT OFFICE IN MONROE,
CONNECTICUT.  IF THE COMPANY REQUIRES YOU TO RELOCATE TO THE COMPANY’S
HEADQUARTERS OR ANOTHER OFFICE MORE THAN 50 MILES FROM YOUR CURRENT OFFICE IN
MONROE, CONNECTICUT, UPON

 

--------------------------------------------------------------------------------

 

PRESENTMENT TO THE COMPANY OF APPROPRIATE DOCUMENTATION, THE COMPANY AGREES TO
PAY FOR OR REIMBURSE YOU FOR ALL REASONABLE MOVING AND RELOCATION EXPENSES AND
COSTS YOU INCUR, THE COST OF ROUNDTRIP TRAVEL BETWEEN YOUR CURRENT RESIDENCE AND
SUCH HEADQUARTERS OR OFFICE ONCE PER WEEK, AND TEMPORARY LODGING COSTS PRIOR TO
SUCH RELOCATION.  IN ADDITION, IF YOUR EMPLOYMENT WITH THE COMPANY IS TERMINATED
BY THE COMPANY OTHER THAN FOR CAUSE (AS DEFINED BELOW), UPON PRESENTMENT TO THE
COMPANY OF APPROPRIATE DOCUMENTATION, THE COMPANY AGREES TO PAY FOR OR REIMBURSE
YOU FOR ALL REASONABLE MOVING AND RELOCATION EXPENSES AND COSTS YOU INCUR IN
CONNECTION WITH YOUR MOVE BACK TO MONROE, CONNECTICUT, PROVIDED SUCH EXPENSES
AND COSTS ARE INCURRED WITHIN 90 DAYS OF THE DATE OF YOUR TERMINATION OF
EMPLOYMENT.  YOU FURTHER ACKNOWLEDGE AND AGREE THAT THE PERFORMANCE OF YOUR
DUTIES AND RESPONSIBILITIES HEREUNDER WILL REQUIRE SUBSTANTIAL BUSINESS TRAVEL,
INCLUDING TO THE COMPANY’S OTHER OFFICES.

 

2.             BASE SALARY.  WHILE YOU ARE EMPLOYED BY THE COMPANY, THE COMPANY
WILL PAY YOU A BASE SALARY AT THE ANNUAL RATE OF $500,000, IN ACCORDANCE WITH
THE USUAL PAYROLL PRACTICES OF THE COMPANY.  YOUR BASE SALARY WILL BE REVIEWED
ANNUALLY BY THE BOARD (OR A DULY AUTHORIZED COMMITTEE THEREOF) AND IS SUBJECT TO
MERIT INCREASES AS DETERMINED BY THE BOARD (OR A DULY AUTHORIZED COMMITTEE
THEREOF) IN ITS SOLE DISCRETION.

 

3.             SIGN-ON STOCK OPTION GRANT.

 

(A)           GRANT.  THE COMPANY WILL RECOMMEND TO THE BOARD (OR A DULY
AUTHORIZED COMMITTEE THEREOF) THAT THE COMPANY GRANT TO YOU ON THE EMPLOYMENT
COMMENCEMENT DATE (OR IF SUCH DATE IS NOT A NASDAQ TRADING DAY, THEN THE FIRST
NASDAQ TRADING DAY IMMEDIATELY FOLLOWING SUCH DATE) (THE “GRANT DATE”), A
NON-QUALIFIED STOCK OPTION (THE “OPTION”) TO PURCHASE 1,750,000 SHARES OF THE
COMPANY’S COMMON STOCK, PAR VALUE $0.0017 (THE “COMMON STOCK”).  THE OPTION WILL
BE GRANTED PURSUANT TO THE MRV COMMUNICATIONS, INC. 2007 OMNIBUS INCENTIVE PLAN
(THE “2007 PLAN”) OR, IF ALL OR A PORTION OF THE OPTION IS NOT PERMITTED TO BE
GRANTED UNDER THE 2007 PLAN FOR ANY REASON, PURSUANT TO ANOTHER
SHAREHOLDER-APPROVED EQUITY PLAN OR A NON-SHAREHOLDER APPROVED ARRANGEMENT, IN
WHICH CASE THE TERMS AND CONDITIONS OF THE OPTION GRANTED PURSUANT TO SUCH
NON-SHAREHOLDER APPROVED ARRANGEMENT WILL BE IDENTICAL TO THOSE OF THE 2007 PLAN
(EXCEPT THAT THE OPTION WILL NOT BE GRANTED UNDER THE 2007 PLAN) (THE “INCENTIVE
PLAN”).  THE OPTION WILL HAVE AN EXERCISE PRICE EQUAL TO THE FAIR MARKET VALUE
(AS DEFINED IN THE 2007 PLAN) OF THE COMMON STOCK ON THE GRANT DATE AND WILL BE
FOR A TERM OF TEN YEARS, SUBJECT TO EARLIER TERMINATION AS PROVIDED IN THE
INCENTIVE PLAN OR HEREIN.  YOU AND THE COMPANY AGREE THAT THE GRANTING OF THE
OPTION IS AN INDUCEMENT MATERIAL TO YOUR DECISION TO ENTER INTO THIS LETTER
AGREEMENT AND ACCEPT EMPLOYMENT WITH THE COMPANY.

 

(B)           VESTING.  SUBJECT TO ACCELERATED VESTING AS SET FORTH IN THIS
LETTER AGREEMENT, THE OPTION WILL VEST AND BECOME EXERCISABLE IMMEDIATELY PRIOR
TO THE

 

2

--------------------------------------------------------------------------------

 

CLOSE OF BUSINESS ON JUNE 30, 2011 (THE “VESTING DATE”), PROVIDED THAT YOU
REMAIN CONTINUOUSLY EMPLOYED BY THE COMPANY THROUGH SUCH DATE.  IF, PRIOR TO THE
VESTING DATE, (1) YOUR EMPLOYMENT WITH THE COMPANY IS TERMINATED BY THE COMPANY
OTHER THAN FOR CAUSE OR (2) A CHANGE IN CONTROL (AS DEFINED IN THE 2007 PLAN)
OCCURS, THE OPTION WILL BE FULLY VESTED AND EXERCISABLE.  IN THE EVENT OF YOUR
TERMINATION OF EMPLOYMENT (OTHER THAN BY THE COMPANY FOR CAUSE), IF THE OPTION
HAS VESTED, THE OPTION WILL REMAIN EXERCISABLE UNTIL THE EARLIEST OF THE
EXPIRATION OF THE OPTION TERM OR THE FOURTH ANNIVERSARY OF THE DATE OF YOUR
TERMINATION OF EMPLOYMENT.  ANY UNEXERCISED PORTION OF THE OPTION WILL BE
FORFEITED IN ITS ENTIRETY (WHETHER VESTED OR UNVESTED) IN THE EVENT OF YOUR
TERMINATION OF EMPLOYMENT BY THE COMPANY FOR CAUSE.  FOR PURPOSES OF THIS LETTER
AGREEMENT, “CAUSE” MEANS (I) YOUR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE WHICH,
IN THE GOOD FAITH JUDGMENT OF THE BOARD, HAS A MATERIAL ADVERSE IMPACT ON THE
COMPANY (EITHER ECONOMICALLY OR ON ITS REPUTATION); (II) YOUR CONVICTION OF, OR
PLEADING OF GUILTY OR NOLO CONTENDERE TO, A FELONY (OR EQUIVALENT OUTSIDE OF THE
UNITED STATES) OR ANY CRIME INVOLVING FRAUD OR MATERIAL DISHONESTY; (III) YOUR
FAILURE TO ATTEMPT IN GOOD FAITH TO PERFORM YOUR DUTIES OR TO FOLLOW THE LEGAL
DIRECTION OF THE BOARD, WHICH FAILURE IS NOT REMEDIED WITHIN 30 DAYS OF WRITTEN
NOTICE FROM THE BOARD SPECIFYING THE DETAILS THEREOF; AND (IV) ANY OTHER
MATERIAL BREACH BY YOU OF THIS LETTER AGREEMENT, THE COMPANY’S WRITTEN CODE OF
CONDUCT, WRITTEN CODE OF ETHICS OR OTHER WRITTEN POLICY THAT IS NOT REMEDIED
WITHIN 30 DAYS OF WRITTEN NOTICE FROM THE BOARD SPECIFYING THE DETAILS THEREOF.

 

(C)           OTHER TERMS.  THE OPTION WILL BE SUBJECT TO ALL OF THE TERMS AND
CONDITIONS OF, THE INCENTIVE PLAN AND THE FORM OF STOCK OPTION AGREEMENT USED
FOR SIMILARLY SITUATED EXECUTIVES OF THE COMPANY, TO THE EXTENT NOT CONTRARY TO
THE TERMS OF THIS LETTER AGREEMENT.  THE OPTION WILL INCLUDE A CASHLESS EXERCISE
FEATURE.

 

(D)           REGISTRATION.  THE SHARES OF COMMON STOCK UNDERLYING THE OPTION
WILL BE TIMELY REGISTERED ON A FORM S-8.

 

4.             BENEFITS AND FRINGES.

 

(A)           GENERAL.  WHILE YOU ARE EMPLOYED BY THE COMPANY, YOU WILL BE
ENTITLED TO SUCH BENEFITS AND FRINGES, IF ANY, AS ARE GENERALLY PROVIDED FROM
TIME TO TIME BY THE COMPANY TO SIMILARLY SITUATED EXECUTIVES AT A LEVEL
COMMENSURATE WITH YOUR POSITION, SUBJECT TO THE SATISFACTION OF ANY ELIGIBILITY
REQUIREMENTS.  IN LIEU OF COVERAGE UNDER THE COMPANY’S GROUP HEALTH PLAN, THE
COMPANY WILL PAY YOU A MONTHLY AMOUNT EQUAL TO THE EMPLOYER PORTION OF THE
PREMIUM COST THE COMPANY WOULD HAVE PAID ON YOUR BEHALF IF YOU WERE COVERED BY
THE COMPANY’S GROUP HEALTH PLAN FOR YOU TO OBTAIN HEALTH INSURANCE FOR YOU AND
YOUR ELIGIBLE DEPENDENTS.  NOTWITHSTANDING THE FOREGOING, THE COMPANY MAY MODIFY
OR TERMINATE ANY EMPLOYEE BENEFIT PLAN AT ANY TIME.

 

3

--------------------------------------------------------------------------------

 

(B)           VACATION.  YOU WILL ALSO BE ENTITLED TO ANNUAL PAID VACATION IN
ACCORDANCE WITH THE COMPANY’S VACATION POLICIES IN EFFECT FROM TIME TO TIME, BUT
IN NO EVENT LESS THAN FOUR WEEKS PER CALENDAR YEAR (AS PRORATED FOR PARTIAL
YEARS), WHICH VACATION MAY BE TAKEN AT SUCH TIMES AS YOU ELECT WITH DUE REGARD
TO THE NEEDS OF THE COMPANY AND PROVIDED THAT AT ALL TIMES YOU ARE REASONABLY
REACHABLE BY THE COMPANY.

 

(C)           REIMBURSEMENT OF BUSINESS AND ENTERTAINMENT EXPENSES.  UPON
PRESENTATION OF APPROPRIATE DOCUMENTATION, YOU WILL BE REIMBURSED IN ACCORDANCE
WITH THE COMPANY’S EXPENSE REIMBURSEMENT POLICY IN EFFECT FROM TIME TO TIME
(INCLUDING, WITHOUT LIMITATION, EXPENSE VERIFICATION POLICIES) FOR ALL
REASONABLE AND NECESSARY BUSINESS AND ENTERTAINMENT EXPENSES INCURRED IN
CONNECTION WITH THE PERFORMANCE OF YOUR DUTIES AND RESPONSIBILITIES HEREUNDER.

 

5.             TERMINATION OF EMPLOYMENT.

 

(A)           GENERAL.  YOUR EMPLOYMENT UNDER THIS LETTER AGREEMENT WILL BEGIN
ON THE EMPLOYMENT COMMENCEMENT DATE AND END ON JUNE 30, 2011 (THE “END DATE”),
UNLESS EXTENDED BY MUTUAL AGREEMENT OF THE PARTIES.  AT ALL TIMES, YOUR
EMPLOYMENT WITH THE COMPANY IS “AT-WILL” WHICH MEANS THAT EMPLOYMENT WITH THE
COMPANY MAY BE TERMINATED AT ANY TIME BY EITHER YOU OR THE COMPANY FOR ANY
REASON (OR NO REASON) UPON 45 DAYS’ ADVANCED WRITTEN NOTICE TO THE OTHER PARTY;
PROVIDED, HOWEVER, THAT IN THE EVENT THAT YOU GIVE NOTICE OF TERMINATION TO THE
COMPANY, THE COMPANY MAY, IN ITS SOLE DISCRETION, MAKE SUCH TERMINATION
EFFECTIVE EARLIER THAN ANY NOTICE DATE; PROVIDED, FURTHER, THAT THE COMPANY MAY
TERMINATE YOUR EMPLOYMENT IMMEDIATELY UPON WRITTEN NOTICE TO YOU OF A
TERMINATION FOR CAUSE (PROVIDED THAT YOU HAVE FIRST BEEN PROVIDED THE
OPPORTUNITY TO CURE AN EVENT AS PROVIDED IN THE DEFINITION OF CAUSE SET FORTH IN
PARAGRAPH 3(B)).  YOUR EMPLOYMENT WILL AUTOMATICALLY TERMINATE ON THE DATE OF
YOUR DEATH.  THE OPTION WILL BE FULLY VESTED UPON THE END DATE IF YOU ARE
EMPLOYED ON THE END DATE, WHETHER OR NOT THIS LETTER AGREEMENT IS EXTENDED.

 

(B)           RESIGNATIONS.  UPON TERMINATION OF YOUR EMPLOYMENT FOR ANY REASON,
YOU AGREE TO IMMEDIATELY RESIGN FROM (1) ALL BOARDS OF DIRECTORS, COMMITTEES AND
OFFICER OR OTHER POSITIONS OF THE COMPANY AND (2) ALL FIDUCIARY POSITIONS
(INCLUDING AS TRUSTEE) YOU HOLD WITH RESPECT TO ANY PENSION PLANS OR TRUSTS
ESTABLISHED BY THE COMPANY.

 

(C)           PAYMENT OF ACCRUED AMOUNTS.  UPON TERMINATION OF YOUR EMPLOYMENT
FOR ANY REASON, EXCEPT AS PROVIDED IN PARAGRAPH 5(D), THE COMPANY WILL HAVE NO
OBLIGATIONS TO YOU UNDER THIS LETTER AGREEMENT OTHER THAN TO PAY OR PROVIDE, TO
THE EXTENT NOT THERETOFORE PAID OR PROVIDED, (1) ANY ACCRUED AND UNPAID BASE
SALARY THROUGH THE DATE OF YOUR TERMINATION OF EMPLOYMENT IN ACCORDANCE WITH THE
COMPANY’S PAYROLL PRACTICES, (2) ANY ACCRUED BUT UNUSED VACATION IN

 

4

--------------------------------------------------------------------------------

 

ACCORDANCE WITH COMPANY POLICY, (3) REIMBURSEMENT FOR ANY UNREIMBURSED BUSINESS
AND ENTERTAINMENT EXPENSES INCURRED THROUGH THE DATE OF YOUR TERMINATION OF
EMPLOYMENT IN ACCORDANCE WITH COMPANY POLICY, AND (4) ANY OTHER AMOUNTS AND
BENEFITS YOU ARE ENTITLED TO RECEIVE UNDER LAW OR UNDER ANY EMPLOYEE BENEFIT
PLAN OR PROGRAM, OR EQUITY PLAN OR GRANT IN ACCORDANCE WITH THE TERMS AND
PROVISIONS OF SUCH PLANS, PROGRAMS, EQUITY PLAN AND GRANTS (COLLECTIVELY,
“ACCRUED BENEFITS”).

 

(D)           PAYMENT OF SEVERANCE.  SUBJECT TO PARAGRAPH 5(E), ON THE 55TH DAY
FOLLOWING THE DATE OF YOUR TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT
CAUSE OR BY YOU FOR GOOD REASON (AS DEFINED BELOW) PRIOR TO THE END DATE (OR THE
FIRST BUSINESS DAY THEREAFTER), THE COMPANY WILL PAY YOU A LUMP SUM PAYMENT
EQUAL TO THE GREATER OF (1) THE SUM OF THE REMAINING BASE SALARY YOU WOULD HAVE
OTHERWISE BEEN ENTITLED TO RECEIVE FROM THE DATE OF YOUR TERMINATION OF
EMPLOYMENT THROUGH THE END DATE AND (2) $125,000.  FOR PURPOSES OF THIS LETTER
AGREEMENT, “GOOD REASON” MEANS, WITHOUT YOUR PRIOR CONSENT, (I) A MATERIAL
DIMINUTION IN YOUR DUTIES OR RESPONSIBILITIES, (II) A MATERIAL DIMINUTION IN
YOUR BASE SALARY, OR (III) ANY MATERIAL BREACH BY THE COMPANY OF A MATERIAL
PROVISION OF THIS LETTER AGREEMENT (INCLUDING, FOR THE AVOIDANCE OF DOUBT, THE
FAILURE OF THE COMPANY TO GRANT THE OPTION IN ACCORDANCE WITH THE PROVISIONS OF
PARAGRAPH 3(A)); PROVIDED, HOWEVER, THAT AN EVENT SHALL ONLY CONSTITUTE GOOD
REASON IF YOU HAVE GIVEN THE COMPANY WRITTEN NOTICE WITHIN 90 DAYS FOLLOWING THE
FIRST OCCURRENCE OF THE EVENT CONSTITUTING GOOD REASON SETTING FORTH THE
CIRCUMSTANCES ALLEGED TO CONSTITUTE GOOD REASON AND 45 DAYS TO CURE THE EVENT
ALLEGED TO CONSTITUTE GOOD REASON.  IF THE COMPANY DOES NOT TIMELY AND
REASONABLY REMEDY THE EVENT YOU ALLEGE CONSTITUTES GOOD REASON AND AGREES THAT
THE EVENT CONSTITUTES GOOD REASON, THEN YOUR TERMINATION OF EMPLOYMENT WILL BE
EFFECTIVE ON THE 45TH DAY FOLLOWING THE DATE YOU DELIVERED NOTICE TO THE COMPANY
SPECIFYING THE EVENT ALLEGED TO CONSTITUTE GOOD REASON.  YOU WILL HAVE NO DUTY
TO MITIGATE DAMAGES UPON TERMINATION OF YOUR EMPLOYMENT.  THE SEVERANCE PAYMENT
PROVIDED IN THIS PARAGRAPH 5(D) IS IN LIEU OF ANY TERMINATION OR SEVERANCE
PAYMENTS FOR WHICH YOU MAY BE ELIGIBLE UNDER ANY OF THE PLANS, POLICIES OR
PROGRAMS OF THE COMPANY (EXCEPT FOR ACCRUED BENEFITS AND THE RELOCATION BENEFITS
PROVIDED FOR IN PARAGRAPH 1(C)).

 

(E)           RELEASE REQUIRED.  THE AMOUNT PAYABLE PURSUANT TO PARAGRAPH
5(D) SHALL ONLY BE PAYABLE IF YOU DELIVER TO THE COMPANY AND DO NOT REVOKE A
GENERAL RELEASE OF ALL CLAIMS RELATED TO THE COMPANY AND ITS PAST AND PRESENT
OFFICERS, DIRECTORS, EMPLOYEES AND STOCKHOLDERS IN SUCH FORM AND SUBSTANCE
SATISFACTORY TO THE COMPANY AND SUCH GENERAL RELEASE BECOMES IRREVOCABLE WITHIN
55 DAYS THE DATE OF YOUR TERMINATION OF EMPLOYMENT; PROVIDED, HOWEVER, THAT,
SUCH RELEASE WILL NOT INCLUDE A WAIVER OF ANY RIGHTS YOU MAY HAVE (1) TO ACCRUED
BENEFITS, (2) UNDER ANY OUTSTANDING EQUITY GRANT, (3) TO ENFORCE YOUR RIGHTS
UNDER

 

5

--------------------------------------------------------------------------------

 

THIS LETTER AGREEMENT, (4) AS A STOCKHOLDER OF THE COMPANY, IF APPLICABLE, AND
(5) TO INDEMNIFICATION AND DIRECTORS AND OFFICERS LIABILITY INSURANCE COVERAGE
UNDER PARAGRAPH 11.

 

6.             CONTINGENT REDUCTION OF PARACHUTE PAYMENTS.  IF THERE IS A CHANGE
IN OWNERSHIP OR CONTROL OF THE COMPANY THAT WOULD CAUSE ANY PAYMENT OR
DISTRIBUTION BY THE COMPANY OR ANY OTHER PERSON OR ENTITY TO YOU OR FOR YOUR
BENEFIT (WHETHER PAID OR PAYABLE OR DISTRIBUTED OR DISTRIBUTABLE PURSUANT TO THE
TERMS OF THIS LETTER AGREEMENT OR OTHERWISE) (A “PAYMENT”) TO BE SUBJECT TO THE
EXCISE TAX IMPOSED BY SECTION 4999 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE “CODE”) (SUCH EXCISE TAX, TOGETHER WITH ANY INTEREST OR PENALTIES
INCURRED BY YOU WITH RESPECT TO SUCH EXCISE TAX, THE “EXCISE TAX”), THEN YOU
WILL RECEIVE THE GREATEST OF THE FOLLOWING, WHICHEVER GIVES YOU THE HIGHEST NET
AFTER-TAX AMOUNT (AFTER TAKING INTO ACCOUNT FEDERAL, STATE, LOCAL AND SOCIAL
SECURITY TAXES): (A) THE PAYMENTS OR (B) ONE DOLLAR LESS THAN THE AMOUNT OF THE
PAYMENTS THAT WOULD SUBJECT YOU TO THE EXCISE TAX (THE “SAFE HARBOR AMOUNT”). 
IF A REDUCTION IN THE PAYMENTS IS NECESSARY SO THAT THE PAYMENTS EQUAL THE SAFE
HARBOR AMOUNT AND NONE OF THE PAYMENTS CONSTITUTES A “DEFERRAL OF COMPENSATION”
WITHIN THE MEANING OF AND SUBJECT TO SECTION 409A (“NONQUALIFIED DEFERRED
COMPENSATION”), THEN THE REDUCTION SHALL OCCUR IN THE MANNER YOU ELECT IN
WRITING PRIOR TO THE DATE OF PAYMENT.  IF ANY PAYMENT CONSTITUTES NONQUALIFIED
DEFERRED COMPENSATION OR IF YOU FAIL TO ELECT AN ORDER, THEN THE PAYMENTS TO BE
REDUCED WILL BE DETERMINED IN A MANNER WHICH HAS THE LEAST ECONOMIC COST TO YOU
AND, TO THE EXTENT THE ECONOMIC COST IS EQUIVALENT, WILL BE REDUCED IN THE
INVERSE ORDER OF WHEN PAYMENT WOULD HAVE BEEN MADE TO YOU, UNTIL THE REDUCTION
IS ACHIEVED.  ALL DETERMINATIONS REQUIRED TO BE MADE UNDER THIS PARAGRAPH 6,
INCLUDING WHETHER AND WHEN THE SAFE HARBOR AMOUNT IS REQUIRED AND THE AMOUNT OF
THE REDUCTION OF THE PAYMENTS AND THE ASSUMPTIONS TO BE UTILIZED IN ARRIVING AT
SUCH DETERMINATION, SHALL BE MADE BY A CERTIFIED PUBLIC ACCOUNTING FIRM
DESIGNATED BY THE COMPANY (THE “ACCOUNTING FIRM”).  ALL FEES AND EXPENSES OF THE
ACCOUNTING FIRM SHALL BE BORNE SOLELY BY THE COMPANY.  ANY DETERMINATION BY THE
ACCOUNTING FIRM SHALL BE BINDING UPON THE COMPANY AND YOU.

 

7.             EMPLOYEE COVENANTS.

 

(A)           CONFIDENTIALITY.  YOU AGREE THAT, WHILE YOU ARE EMPLOYED BY THE
COMPANY AND THEREAFTER, YOU WILL NOT, DIRECTLY OR INDIRECTLY, USE, MAKE
AVAILABLE, SELL, DISCLOSE OR OTHERWISE COMMUNICATE TO ANY PERSON, OTHER THAN IN
THE COURSE OF THE GOOD FAITH PERFORMANCE OF YOUR ASSIGNED DUTIES AND
RESPONSIBILITIES AND FOR THE BENEFIT OF THE COMPANY, EITHER DURING THE PERIOD OF
YOUR EMPLOYMENT OR AT ANY TIME THEREAFTER, ANY BUSINESS AND TECHNICAL
INFORMATION OR TRADE SECRETS, NONPUBLIC, PROPRIETARY OR CONFIDENTIAL
INFORMATION, KNOWLEDGE OR DATA RELATING TO THE COMPANY OR ITS BUSINESSES, WHICH
YOU WILL HAVE OBTAINED DURING YOUR EMPLOYMENT WITH THE COMPANY (“CONFIDENTIAL
INFORMATION”).  NOTWITHSTANDING THE FOREGOING, “CONFIDENTIAL INFORMATION” WILL
NOT APPLY TO INFORMATION THAT: (1)

 

6

--------------------------------------------------------------------------------

 

WAS KNOWN TO THE PUBLIC PRIOR TO ITS DISCLOSURE TO YOU; (2) BECOMES GENERALLY
KNOWN TO THE PUBLIC SUBSEQUENT TO DISCLOSURE TO YOU THROUGH NO WRONGFUL ACT OF
YOU OR ANY OF YOUR REPRESENTATIVES; OR (3) YOU ARE REQUIRED TO DISCLOSE BY
APPLICABLE LAW, REGULATION OR LEGAL PROCESS (PROVIDED THAT YOU PROVIDE THE
COMPANY WITH PRIOR NOTICE OF THE CONTEMPLATED DISCLOSURE AND REASONABLY
COOPERATE WITH THE COMPANY AT ITS EXPENSE IN SEEKING A PROTECTIVE ORDER OR OTHER
APPROPRIATE PROTECTION OF SUCH INFORMATION).  YOU ALSO AGREE TO TURN OVER ALL
COPIES OF CONFIDENTIAL INFORMATION IN YOUR CONTROL TO THE COMPANY UPON REQUEST
OR UPON TERMINATION OF YOUR EMPLOYMENT WITH THE COMPANY.

 

(B)           NON-SOLICITATION OF BUSINESS PARTNERS.  YOU AGREE THAT, WHILE YOU
ARE EMPLOYED BY THE COMPANY AND DURING THE ONE-YEAR PERIOD FOLLOWING THE
TERMINATION DATE (THE “RESTRICTED PERIOD”), YOU WILL NOT, EITHER DIRECTLY OR
INDIRECTLY, INDUCE, INFLUENCE, PERSUADE, SOLICIT OR ATTEMPT TO INDUCE, INFLUENCE
PERSUADE, OR SOLICIT ANY BUSINESS PARTNER, VENDOR, CUSTOMER OR SUPPLIER OF THE
COMPANY TO TERMINATE THE BUSINESS RELATIONSHIP OF SUCH PERSON WITH THE COMPANY,
TO MATERIALLY REDUCE THE AMOUNT OF BUSINESS CONDUCTED WITH THE COMPANY OR IN ANY
WAY INTERFERE WITH THE RELATIONSHIP BETWEEN ANY SUCH BUSINESS PARTNER, VENDOR,
CUSTOMER OR SUPPLIER AND THE COMPANY.

 

(C)           NON-SOLICITATION OF EMPLOYEES.  YOU AGREE THAT, DURING THE
RESTRICTED PERIOD, YOU WILL NOT, EITHER DIRECTLY OR INDIRECTLY, HIRE EMPLOYEES
OR FORMER EMPLOYEES OF THE COMPANY (WHICH SHALL FOR THIS PURPOSE ONLY INCLUDE
INDIVIDUALS EMPLOYED BY THE COMPANY AT ANY POINT DURING THE SIX MONTHS PRECEDING
SUCH HIRING) OR INDUCE, INFLUENCE, PERSUADE, SOLICIT OR ATTEMPT TO INDUCE,
INFLUENCE, PERSUADE OR SOLICIT ANY EMPLOYEES OF THE COMPANY TO LEAVE THE EMPLOY
OF THE COMPANY, NOR WILL YOU HELP OTHERS TO DO SO, EXCEPT IN THE GOOD FAITH
PERFORMANCE OF YOUR DUTIES AND RESPONSIBILITIES HEREUNDER.

 

(D)           NON-DISPARAGEMENT.  YOU AGREE THAT, WHILE YOU ARE EMPLOYED BY THE
COMPANY AND THEREAFTER, YOU WILL NOT, OR ENCOURAGE OR INDUCE OTHERS TO,
DISPARAGE THE COMPANY OR ANY OF ITS PAST AND PRESENT OFFICERS, DIRECTORS,
EMPLOYEES, STOCKHOLDERS, PRODUCTS OR SERVICES.  “DISPARAGE” INCLUDES, WITHOUT
LIMITATION, MAKING COMMENTS OR STATEMENTS TO THE PRESS, THE COMPANY’S EMPLOYEES
OR ANY INDIVIDUAL OR ENTITY WITH WHOM THE COMPANY HAS A BUSINESS RELATIONSHIP
(INCLUDING, WITHOUT LIMITATION, ANY VENDOR, SUPPLIER, CUSTOMER OR DISTRIBUTOR OF
THE COMPANY) THAT COULD ADVERSELY AFFECT IN ANY MANNER: (1) THE CONDUCT OF THE
BUSINESS OF THE COMPANY (INCLUDING, WITHOUT LIMITATION, ANY PRODUCTS OR BUSINESS
PLANS OR PROSPECTS); OR (2) THE BUSINESS REPUTATION OF THE COMPANY, OR ANY OF
ITS PRODUCTS OR SERVICES, OR THE BUSINESS OR PERSONAL REPUTATION OF THE
COMPANY’S PAST OR PRESENT OFFICERS, DIRECTORS, EMPLOYEES OR STOCKHOLDERS. 
NOTHING HEREIN SHALL PROHIBIT YOU (I) FROM RESPONDING TRUTHFULLY TO ANY
GOVERNMENTAL INVESTIGATION, LEGAL PROCESS OR INQUIRY RELATED THERETO, (II) FROM

 

7

--------------------------------------------------------------------------------

 

MAKING TRADITIONAL COMPETITIVE STATEMENTS IN THE COURSE OF PROMOTING A
COMPETITIVE BUSINESS, SO LONG AS ANY STATEMENTS DESCRIBED IN THIS CLAUSE (II) DO
NOT INTENTIONALLY DISPARAGE THE COMPANY OR ANY OF ITS PAST AND PRESENT OFFICERS,
DIRECTORS, EMPLOYEES, STOCKHOLDERS, PRODUCTS OR SERVICES AND ARE NOT BASED ON
CONFIDENTIAL INFORMATION OBTAINED DURING THE COURSE OF YOUR EMPLOYMENT WITH THE
COMPANY, (III) FROM MAKING STATEMENTS IN THE COURSE OF THE GOOD FAITH
PERFORMANCE OF YOUR ASSIGNED DUTIES AND RESPONSIBILITIES AND FOR THE BENEFIT OF
THE COMPANY OR IN ORDER TO IN GOOD FAITH ENFORCE YOUR RIGHTS UNDER THIS LETTER
AGREEMENT, (IV) FROM REBUTTING UNTRUE OR MISLEADING STATEMENTS IN GOOD FAITH. 
THIS PARAGRAPH IS MADE AND ENTERED INTO SOLELY FOR THE BENEFIT OF THE COMPANY
AND ITS SUCCESSORS AND PERMITTED ASSIGNS, AND NO OTHER PERSON OR ENTITY SHALL
HAVE ANY CAUSE OF ACTION HEREUNDER.

 

(E)           TRANSITION AND OTHER ASSISTANCE.  DURING THE 30 DAYS AFTER NOTICE
OF TERMINATION OF YOUR EMPLOYMENT HAS BEEN GIVEN (OR, IF SHORTER, DURING THE
PERIOD BETWEEN THE DATE WRITTEN NOTICE OF TERMINATION IS PROVIDED PURSUANT TO
PARAGRAPH 5(A) AND THE EFFECTIVE DATE OF YOUR TERMINATION OF EMPLOYMENT), YOU
WILL TAKE ALL ACTIONS THE COMPANY MAY REASONABLY REQUEST TO MAINTAIN THE
COMPANY’S BUSINESS, GOODWILL AND BUSINESS RELATIONSHIPS AND TO ASSIST WITH
TRANSITION MATTERS.  IN ADDITION, UPON THE RECEIPT OF NOTICE FROM THE COMPANY
(INCLUDING OUTSIDE COUNSEL), YOU AGREE THAT WHILE YOU ARE EMPLOYED BY THE
COMPANY AND THEREAFTER, YOU WILL RESPOND AND PROVIDE INFORMATION WITH REGARD TO
MATTERS IN WHICH YOU HAVE KNOWLEDGE AS A RESULT OF YOUR EMPLOYMENT WITH THE
COMPANY, AND WILL PROVIDE ASSISTANCE TO THE COMPANY AND ITS REPRESENTATIVES IN
THE DEFENSE OR PROSECUTION OF ANY CLAIMS THAT MAY BE MADE BY OR AGAINST THE
COMPANY, TO THE EXTENT THAT SUCH CLAIMS MAY RELATE TO THE PERIOD OF YOUR
EMPLOYMENT WITH THE COMPANY.  YOU AGREE TO PROMPTLY INFORM THE COMPANY IF YOU
BECOME AWARE OF ANY LAWSUITS INVOLVING SUCH CLAIMS THAT MAY BE FILED OR
THREATENED AGAINST THE COMPANY.  YOU ALSO AGREE TO PROMPTLY INFORM THE COMPANY
(TO THE EXTENT YOU ARE LEGALLY PERMITTED TO DO SO) IF YOU ARE ASKED TO ASSIST IN
ANY INVESTIGATION OF THE COMPANY (OR ITS ACTIONS), REGARDLESS OF WHETHER A
LAWSUIT OR OTHER PROCEEDING HAS THEN BEEN FILED AGAINST THE COMPANY WITH RESPECT
TO SUCH INVESTIGATION, AND WILL NOT DO SO UNLESS LEGALLY REQUIRED.  UPON
PRESENTMENT TO THE COMPANY OF APPROPRIATE DOCUMENTATION, THE COMPANY WILL
COMPENSATE YOU AT YOUR CUSTOMARY PER DIEM CONSULTING FEE IN EFFECT AT THE TIME,
PLUS REASONABLE EXPENSES, IN CONNECTION WITH ANY ACTIONS REQUESTED BY THE
COMPANY UNDER THIS PARAGRAPH FOLLOWING THE TERMINATION OF YOUR EMPLOYMENT. 
FOLLOWING THE TERMINATION OF YOUR EMPLOYMENT, THE COMPANY AGREES THAT IT WILL
COORDINATE ANY SUCH REQUEST FOR ASSISTANCE WITH YOUR OTHER BUSINESS OR
PROFESSIONAL COMMITMENTS AND RESPONSIBILITIES TO MINIMIZE THE DEGREE TO WHICH
SUCH REQUEST INTERFERES WITH SUCH COMMITMENTS AND RESPONSIBILITIES.

 

8

--------------------------------------------------------------------------------

 

(F)            TOLLING.  IN THE EVENT OF ANY VIOLATION OF THE PROVISIONS OF THIS
PARAGRAPH 7, YOU ACKNOWLEDGE AND AGREE THAT THE POST-TERMINATION RESTRICTIONS
CONTAINED IN THIS PARAGRAPH 7 SHALL BE EXTENDED BY A PERIOD OF TIME EQUAL TO THE
PERIOD OF SUCH VIOLATION, IT BEING THE INTENTION OF THE PARTIES HERETO THAT THE
RUNNING OF THE APPLICABLE POST-TERMINATION RESTRICTION PERIOD SHALL BE TOLLED
DURING ANY PERIOD OF SUCH VIOLATION.

 

(G)           EQUITABLE RELIEF.  NOTWITHSTANDING ANYTHING IN THIS LETTER
AGREEMENT TO THE CONTRARY, IN THE EVENT OF A BREACH OR THREATENED BREACH BY YOU
OF THE PROVISIONS OF PARAGRAPH 7, YOU ACKNOWLEDGE THAT THE COMPANY’S REMEDIES AT
LAW WOULD BE INADEQUATE AND, IN RECOGNITION OF THIS FACT, YOU AGREES THAT, IN
THE EVENT OF SUCH A BREACH OR THREATENED BREACH, IN ADDITION TO ANY REMEDIES AT
LAW, THE COMPANY, WITHOUT POSTING ANY BOND, SHALL BE ENTITLED TO OBTAIN
EQUITABLE RELIEF IN THE FORM OF SPECIFIC PERFORMANCE, A TEMPORARY RESTRAINING
ORDER, A TEMPORARY OR PERMANENT INJUNCTION OR ANY OTHER EQUITABLE REMEDY WHICH
MAY THEN BE AVAILABLE.

 

(H)           SURVIVAL OF PROVISIONS.  THE OBLIGATIONS CONTAINED IN THIS
PARAGRAPH 7 WILL SURVIVE THE TERMINATION OF YOUR EMPLOYMENT WITH THE COMPANY AND
WILL BE FULLY ENFORCEABLE THEREAFTER.

 

8.             REPRESENTATIONS.  YOU REPRESENT AND WARRANT TO THE COMPANY THAT:
(A) YOU HAVE THE LEGAL RIGHT TO ENTER INTO THIS LETTER AGREEMENT AND TO PERFORM
ALL OF THE OBLIGATIONS ON YOUR PART TO BE PERFORMED HEREUNDER IN ACCORDANCE WITH
ITS TERMS; (B) YOU ARE NOT A PARTY TO ANY CONTRACT, AGREEMENT OR UNDERSTANDING,
WRITTEN OR ORAL, WHICH COULD PREVENT YOU FROM ENTERING INTO THIS LETTER
AGREEMENT OR PERFORMING ALL OF YOUR DUTIES AND RESPONSIBILITIES HEREUNDER; AND
(C) EXCEPT AS PREVIOUSLY DISCLOSED TO THE COMPANY PRIOR TO THE EMPLOYMENT
COMMENCEMENT DATE, YOU ARE NOT A PARTY TO ANY AGREEMENT CONTAINING ANY
NON-COMPETITION, NON-SOLICITATION, CONFIDENTIALITY OR OTHER RESTRICTIONS ON YOUR
ACTIVITIES.  YOU ACKNOWLEDGE AND AGREE THAT: (1) YOU WILL NOT BRING TO THE
COMPANY, OR IMPROPERLY UTILIZE HERE IN YOUR WORK OR OTHERWISE, ANY DOCUMENTS,
MEMORANDA, OR OTHER CONFIDENTIAL INFORMATION OR TRADE SECRETS WHICH WERE
PRODUCED OR OBTAINED BY YOU DURING YOUR PRIOR EMPLOYMENT AND (2) NO SUCH
INFORMATION SHOULD BE DISCUSSED WITH OR DISCLOSED TO ANYONE AT THE COMPANY, IN
CONNECTION WITH THAT PERSON’S WORK OR OTHERWISE.  YOU FURTHER REPRESENT AND
WARRANT TO THE COMPANY THAT, TO THE BEST OF YOUR KNOWLEDGE, INFORMATION AND
BELIEF, YOU ARE NOT AWARE OF ANY ACTION TAKEN BY YOU (OR ANY FAILURE TO ACT)
THAT COULD FORM THE BASIS FOR A BREACH OF FIDUCIARY DUTY OR RELATED CLAIM
AGAINST YOU BY ANY CURRENT OR FORMER EMPLOYER.

 

9.             ASSIGNMENT.  NOTWITHSTANDING ANYTHING ELSE HEREIN, THIS LETTER
AGREEMENT IS PERSONAL TO YOU AND NEITHER THIS LETTER AGREEMENT NOR ANY RIGHTS
HEREUNDER MAY BE ASSIGNED BY YOU.  THE COMPANY MAY ASSIGN THIS LETTER AGREEMENT
TO AN AFFILIATE OR TO ANY ACQUIROR OF ALL OR SUBSTANTIALLY ALL OF THE BUSINESS
AND/OR ASSETS OF THE COMPANY, IN WHICH CASE THE TERM “COMPANY” WILL MEAN SUCH
AFFILIATE OR ACQUIROR.  THIS LETTER AGREEMENT WILL INURE TO THE BENEFIT OF AND
BE BINDING UPON THE PERSONAL OR LEGAL

 

9

--------------------------------------------------------------------------------

 

REPRESENTATIVES, EXECUTORS, ADMINISTRATORS, SUCCESSORS, HEIRS, DISTRIBUTEES,
DEVISEES, LEGATEES AND PERMITTED ASSIGNEES OF THE PARTIES.

 

10.           ARBITRATION.  YOU AGREE THAT ALL DISAGREEMENTS, DISPUTES AND
CONTROVERSIES BETWEEN YOU AND THE COMPANY ARISING UNDER OR IN CONNECTION WITH
THIS LETTER AGREEMENT, OTHER THAN INJUNCTIVE RELIEF UNDER PARAGRAPH 7(G), WILL
BE SETTLED BY ARBITRATION CONDUCTED BEFORE A SINGLE ARBITRATOR MUTUALLY AGREED
TO BY THE COMPANY AND YOU, SITTING IN FAIRFIELD COUNTY, CONNECTICUT OR SUCH
OTHER LOCATION AGREED TO BY YOU AND THE COMPANY, IN ACCORDANCE WITH THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION THEN IN
EFFECT; PROVIDED, HOWEVER, THAT IF THE COMPANY AND YOU ARE UNABLE TO AGREE ON A
SINGLE ARBITRATOR WITHIN 30 DAYS OF THE DEMAND BY ANOTHER PARTY FOR ARBITRATION,
AN ARBITRATOR WILL BE DESIGNATED BY THE BOSTON OFFICE OF THE AMERICAN
ARBITRATION ASSOCIATION.  THE DETERMINATION OF THE ARBITRATOR WILL SET FORTH IN
WRITING FINDINGS OF FACT AND CONCLUSIONS OF LAW UPON WHICH THE DETERMINATION WAS
BASED, AND WILL BE FINAL AND BINDING ON YOU AND THE COMPANY.  EACH PARTY WAIVES
RIGHT TO TRIAL BY JURY AND FURTHER REVIEW OR APPEAL OF THE ARBITRATOR’S RULING. 
JUDGMENT MAY BE ENTERED ON THE AWARD OF THE ARBITRATOR IN ANY COURT HAVING
PROPER JURISDICTION.  THE ARBITRATOR WILL, IN ITS AWARD, ALLOCATE BETWEEN THE
PARTIES THE COSTS OF ARBITRATION, INCLUDING THE ARBITRATOR’S FEES AND EXPENSES,
IN SUCH PROPORTIONS AS THE ARBITRATOR DEEMS JUST.  EACH PARTY SHALL PAY ITS OWN
ATTORNEYS’ FEES AND EXPENSES IN CONNECTION WITH ANY SUCH ARBITRATION.

 

11.           INDEMNIFICATION; LIABILITY INSURANCE.  THE COMPANY HEREBY AGREES
TO INDEMNIFY YOU AND HOLD YOU HARMLESS TO THE FULLEST EXTENT PERMITTED UNDER THE
BY-LAWS OF THE COMPANY IN EFFECT ON THE DATE OF THIS LETTER AGREEMENT AGAINST
AND IN RESPECT TO ANY ACTUAL OR THREATENED ACTIONS, SUITS, PROCEEDINGS, CLAIMS,
DEMANDS, JUDGMENTS, COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEY’S FEES),
LOSSES, AND DAMAGES RESULTING FROM THE GOOD FAITH PERFORMANCE OF YOUR ASSIGNED
DUTIES AND RESPONSIBILITIES WITH THE COMPANY.  THE COMPANY, WITHIN 30 DAYS OF
PRESENTATION OF INVOICES, WILL ADVANCE TO YOU REIMBURSEMENT OF ALL LEGAL FEES
AND DISBURSEMENTS YOU INCUR IN CONNECTION WITH ANY POTENTIALLY INDEMNIFIABLE
MATTER PROVIDED THAT YOU, TO THE EXTENT REQUIRED BY APPLICABLE LAW, UNDERTAKE TO
REPAY SUCH AMOUNT IN THE EVENT THAT IT IS ULTIMATELY DETERMINED THAT YOU ARE NOT
ENTITLED TO BE INDEMNIFIED.  IN ADDITION, THE COMPANY WILL COVER YOU UNDER
DIRECTORS AND OFFICERS LIABILITY INSURANCE BOTH DURING AND, WHILE POTENTIAL
LIABILITY EXISTS, AFTER THE TERMINATION OF YOUR EMPLOYMENT IN THE SAME AMOUNT
AND TO THE SAME EXTENT AS THE COMPANY COVERS ITS OTHER OFFICERS AND DIRECTORS. 
YOU WILL NOT BE LIABLE TO THE COMPANY FOR YOUR ACTS OR OMISSIONS, EXCEPT TO THE
EXTENT THAT SUCH ACTS OR OMISSIONS WERE NOT MADE IN THE GOOD FAITH PERFORMANCE
OF YOUR ASSIGNED DUTIES AND RESPONSIBILITIES, WERE A VIOLATION OF LAW OR
RESULTED FROM YOUR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OR ANY OTHER ACT OR
OMISSION THAT WOULD CONSTITUTE GROUNDS FOR TERMINATING YOUR EMPLOYMENT FOR
CAUSE.  THE OBLIGATIONS AND LIMITS CONTAINED IN THIS PARAGRAPH 11 WILL SURVIVE
THE TERMINATION OF YOUR EMPLOYMENT WITH THE COMPANY.

 

10

--------------------------------------------------------------------------------

 

12.           LEGAL FEES.  UPON PRESENTATION OF APPROPRIATE DOCUMENTATION, THE
COMPANY WILL PAY OR REIMBURSE YOU FOR ALL REASONABLE AND DOCUMENTED LEGAL FEES
AND RELATED EXPENSES INCURRED IN CONNECTION WITH THE DRAFTING, NEGOTIATION AND
EXECUTION OF THIS LETTER AGREEMENT AND ANY RELATED EQUITY AWARD AGREEMENT, UP TO
A MAXIMUM OF $15,000.

 

13.           WITHHOLDING.  THE COMPANY MAY WITHHOLD FROM ANY AND ALL AMOUNTS
PAYABLE TO YOU UNDER THIS LETTER AGREEMENT OR OTHERWISE SUCH FEDERAL, STATE AND
LOCAL TAXES AS MAY BE REQUIRED TO BE WITHHELD PURSUANT TO ANY APPLICABLE LAWS OR
REGULATIONS AND ALL OTHER AMOUNTS OR CHARGES REQUIRED TO BE WITHHELD OR
DEDUCTED.

 

14.           GOVERNING LAW.  THIS LETTER AGREEMENT WILL BE GOVERNED BY, AND
CONSTRUED UNDER AND IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CONNECTICUT, WITHOUT REFERENCE TO RULES RELATING TO CONFLICTS OF LAWS.

 

15.           ENTIRE AGREEMENT; SEVERABILITY; WAIVER; AMENDMENTS.  THIS LETTER
AGREEMENT AND THE AGREEMENTS REFERENCED HEREIN CONTAIN THE ENTIRE AGREEMENT OF
THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF, AND SUPERCEDE IN THEIR
ENTIRETY ANY AND ALL PRIOR AGREEMENTS, UNDERSTANDINGS OR REPRESENTATIONS
RELATING TO THE SUBJECT MATTER HEREOF.  NO AGREEMENTS OR REPRESENTATIONS, ORAL
OR OTHERWISE, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER HEREOF HAVE
BEEN MADE BY EITHER PARTY WHICH ARE NOT EXPRESSLY SET FORTH IN THIS LETTER
AGREEMENT.  THE PROVISIONS OF THIS LETTER AGREEMENT SHALL BE DEEMED SEVERABLE
AND, IF ANY PROVISION IS FOUND TO BE ILLEGAL, INVALID OR UNENFORCEABLE FOR ANY
REASON, (A) THE PROVISION WILL BE AMENDED AUTOMATICALLY TO THE MINIMUM EXTENT
NECESSARY TO CURE THE ILLEGALITY OR INVALIDITY AND PERMIT ENFORCEMENT AND
(B) THE ILLEGALITY, INVALIDITY OR UNENFORCEABILITY WILL NOT AFFECT THE LEGALITY,
VALIDITY OR ENFORCEABILITY OF THE OTHER PROVISIONS HEREOF.  NO WAIVER BY EITHER
PARTY HERETO AT ANY TIME OF ANY BREACH BY THE OTHER PARTY HERETO OF, OR
COMPLIANCE WITH, ANY CONDITION OR PROVISION OF THIS LETTER AGREEMENT TO BE
PERFORMED BY SUCH OTHER PARTY SHALL BE DEEMED A WAIVER OF SIMILAR OR DISSIMILAR
PROVISIONS OR CONDITIONS AT THE SAME OR ANY PRIOR OR SUBSEQUENT TIME.  NO
AMENDMENTS, ALTERATIONS OR MODIFICATIONS OF THIS LETTER AGREEMENT WILL BE VALID
UNLESS MADE IN WRITING AND SIGNED BY YOU AND A DULY AUTHORIZED OFFICER OR
DIRECTOR OF THE COMPANY.

 

11

--------------------------------------------------------------------------------

 

16.           NOTICE.  FOR THE PURPOSE OF THIS LETTER AGREEMENT, NOTICES AND ALL
OTHER COMMUNICATIONS REQUIRED OR PERMITTED TO BE GIVEN UNDER THIS LETTER
AGREEMENT (A “NOTICE”) WILL BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN DULY
GIVEN (A) ON THE DATE OF DELIVERY IF DELIVERED BY HAND, (B) ON THE DATE OF
TRANSMISSION, IF DELIVERED BY CONFIRMED FACSIMILE (WITH A NOTICE
CONTEMPORANEOUSLY GIVEN BY ANOTHER METHOD SPECIFIED IN THIS PARAGRAPH 16),
(C) ON THE FIRST BUSINESS DAY FOLLOWING THE DATE OF DEPOSIT IF DELIVERED BY
GUARANTEED OVERNIGHT DELIVERY SERVICE, OR (D) ON THE FOURTH BUSINESS DAY
FOLLOWING THE DATE DELIVERED OR MAILED BY UNITED STATES REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, ADDRESSED AS FOLLOWS:

 

If to you:

 

At the address (or to the facsimile number) shown on the records of the Company.

 

with a copy to:

 

David A. Swerdloff, Esq.

Day Pitney LLP

One Canterbury Green

Stamford, Connecticut 06901

Facsimile: 203-977-7301

 

If to the Company:

 

MRV Communications, Inc.

20415 Nordhoff Street

Chatsworth, California 91311

Attention: General Counsel

Facsimile: 818-407-5867

 

with a copy to:

 

Patrick S. Brown, Esq.

Michael A. Katz, Esq.

Sullivan & Cromwell LLP

1888 Century Park East

Los Angeles, California 90067-1725

Facsimile: 310-407-2685

 

or to such other address as either party may have furnished to the other in
writing by like Notice, except that notices of change of address will be
effective only upon receipt.

 

12

--------------------------------------------------------------------------------

 

17.           SECTION 409A.  IT IS THE PARTIES’ INTENTION THAT THE PAYMENTS AND
BENEFITS TO WHICH YOU COULD BECOME ENTITLED IN CONNECTION WITH YOUR EMPLOYMENT
UNDER THIS LETTER AGREEMENT BE EXEMPT FROM OR COMPLY WITH SECTION 409A OF THE
CODE AND THE REGULATIONS AND OTHER GUIDANCE PROMULGATED THEREUNDER
(“SECTION 409A”) AND, ACCORDINGLY, THIS LETTER AGREEMENT WILL BE INTERPRETED TO
BE CONSISTENT WITH SUCH INTENT.  TO THE EXTENT ANY TAXABLE EXPENSE REIMBURSEMENT
OR IN-KIND BENEFITS UNDER THIS LETTER AGREEMENT IS SUBJECT TO SECTION 409A, THE
AMOUNT THEREOF ELIGIBLE IN ONE TAXABLE YEAR SHALL NOT AFFECT THE AMOUNT ELIGIBLE
FOR ANY OTHER TAXABLE YEAR, IN NO EVENT SHALL ANY EXPENSES BE REIMBURSED AFTER
THE LAST DAY OF THE TAXABLE YEAR FOLLOWING THE TAXABLE YEAR IN WHICH YOU
INCURRED SUCH EXPENSES AND IN NO EVENT SHALL ANY RIGHT TO REIMBURSEMENT OR
RECEIPT OF IN-KIND BENEFITS BE SUBJECT TO LIQUIDATION OR EXCHANGE FOR ANOTHER
BENEFIT.  EACH PAYMENT UNDER THIS LETTER AGREEMENT WILL BE TREATED AS A SEPARATE
PAYMENT FOR PURPOSES OF SECTION 409A.  TO EXTENT THAT ANY BENEFIT OR PAYMENT
WOULD BE SUBJECT TO THE ADDITIONAL TAX OF SECTION 409A IF PAID OR PROVIDED
DURING THE SIX MONTHS BEGINNING ON THE DATE OF YOUR TERMINATION OF EMPLOYMENT,
IT WILL BE ACCUMULATED AND PAID OR PROVIDED ON THE FIRST BUSINESS DAY OF THE
SEVENTH MONTH FOLLOWING THAT DATE (OR EARLIER, IF PERMITTED BY SECTION 409A).  A
TERMINATION OF EMPLOYMENT SHALL NOT BE DEEMED TO HAVE OCCURRED FOR PURPOSES OF
ANY PROVISION OF THIS LETTER AGREEMENT PROVIDING FOR THE PAYMENT OF ANY AMOUNTS
OR BENEFITS UPON OR FOLLOWING A TERMINATION OF EMPLOYMENT UNLESS SUCH
TERMINATION ALSO CONSTITUTES A “SEPARATION FROM SERVICE” WITHIN THE MEANING OF
SECTION 409A.

 

[Signature Page to Follow]

 

13

--------------------------------------------------------------------------------

 

We hope that you find the foregoing terms and conditions acceptable.  Please
acknowledge your agreement and acceptance of the terms and conditions set forth
in this Letter Agreement by signing below and returning the original copy of
this letter to me.

 

We look forward to the leadership and valuable contributions you will make to
the Company.

 

 

 

Very truly yours,

 

 

 

MRV COMMUNICATIONS, INC.

 

 

 

 

 

By:

/s/ Jennifer Hankes Painter

 

Name:

Jennifer Hankes Painter

 

Title:

VP, General Counsel

 

Agreed to and Accepted:

 

 

/s/ Dilip Singh

 

Dilip Singh

 

 

 

Dated: June 8, 2010

 

 

14

--------------------------------------------------------------------------------