Exhibit
10.2


 


EXECUTIVE SEVERANCE AGREEMENT


 


This EXECUTIVE SEVERANCE AGREEMENT (the “Agreement”)
dated as of                       ,
2010, by and between MRV Communications, Inc., a Delaware corporation (the
“Company”), and                             
(the “Executive”).


 


RECITALS


 


WHEREAS, the purpose of this Agreement is to ensure that the Company
will receive the continued dedication, loyalty, and service of, and the
availability of objective advice and counsel from, the Executive
notwithstanding the possibility, threat or occurrence of a corporate
transaction or other event that might eliminate the Executive’s employment with
the Company; and


 


WHEREAS, the Board of Directors of the Company believes that it is in
the best interests of the Company and its stockholders to provide the Executive
with an incentive to continue his or her employment and to motivate the
Executive to maximize the value of the Company for the benefit of its
stockholders.


 


AGREEMENT


 


NOW THEREFORE, in
consideration of the mutual covenants and agreements of the parties set forth
in this Agreement, and other good and valuable consideration the receipt and
sufficiency of which are acknowledged, the parties agree as follows:


 


1.             Termination
at the Company’s Convenience.  Subject to and conditioned upon the Executive’s
execution and non-revocation of a general release and waiver, in form and
substance reasonably satisfactory to the Company, of all claims against the
Company and its affiliates, including without limitation claims relating to the
Executive’s employment by the Company and the Separation from Service,
discrimination claims, employment-related tort claims, contract claims and
claims under this Agreement, the following payments and benefits will be
provided to the Executive by the Company (in addition to any compensation or
benefits to which the Executive may otherwise be entitled under any other
agreement, plan or arrangement with the Company) in the event of a Separation
from Service of the Executive requested by the Company.


 


1.1          Lump Sum Payment.  Within 60 days
after the Executive’s Separation from Service, subject to Section 3 below,
the Company shall pay to the Executive a lump sum cash payment equal to the
aggregate amount of 12 months of the Executive’s base salary as in effect
immediately prior to the Separation from Service.


 


1.2          Bonus.  The Company shall
pay to the Executive a pro rata share of his or her cash incentive bonus for
the year in which the Separation from Service occurs determined by multiplying (a) the
Executive’s cash incentive bonus amount for such year calculated as if he or
she was employed during the entire year, or if not yet determined for such
year, the cash 


 

















 


incentive bonus for the prior year, in either
case, times (b) a fraction, the numerator of which equals the number of
days in the fiscal year through and including the date on which the Separation
from Service occurs and the denominator of which equals 365.  Subject to Section 3 below, the pro rata
bonus shall be paid in a lump sum within 60 days after the end of the
applicable fiscal year in which the Separation from Service occurs.


 


1.3          Benefits.  The Executive’s
participation in the life, medical, dental, vision, AD&D, and long-term
disability programs provided to the Executive prior to the date of Separation
from Service shall be continued or equivalent benefits provided by the Company,
at the Company’s expense, for a period of one year from the date of the
Executive’s Separation from Service, subject to the Executive’s continued
payment of his or her pro rata contributions of premiums or other contributions
in existence immediately prior to the Separation of Service.  In addition, the Executive’s health coverage
will be pursuant to COBRA and will reduce and count against the applicable
COBRA period.   If for any reason the Company is unable to
continue the benefits, as required by the preceding sentence, the Company shall
pay to the Executive a lump sum cash payment equal to the company’s share of
the premiums associated with the benefits which the Company is unable to
provide, payable within 60 days after the date of the Separation from
Service.  The Company shall also pay to
the Executive all accrued compensation and benefits to which the Executive has
a vested right at the time of Separation from Service in accordance with
applicable law and the terms of the plans, documents or agreements governing
those benefits.


 


2.             Definitions.


 


2.1          Separation
from Service.  “Separation
from Service” means the Executive’s “separation from service” (within the
meaning of Section 409A (as defined below)) from the Company occurring as
a result of the Executive’s termination of employment either: (a) by the
Company without Cause (as defined below); or (b) by the Executive with
Good Reason (as defined below).  Termination of the Executive’s employment
under any other circumstances shall not constitute a Separation from Service
for purposes of the Executive’s eligibility to receive payments and benefits
under this Agreement.


 


2.2          Cause.  “Cause” is determined by the Board of Directors and is defined as the
Executive’s (a) willful failure to perform the material duties of the
Executive’s position after receiving written notice of such failure and being
given reasonable opportunity to cure such failure; (b) willful misconduct
injurious to the Company; or (c) conviction of, or plea of nolo contendere to, a felony or any other crime involving moral turpitude.  No act or
failure to act on the part of the Executive shall be considered “willful”
unless it is done or omitted to be done in bad faith or without reasonable
belief that the action or omission was in the best interest of the Company.


 


2.3          Good Reason.  “Good Reason”
shall mean, without the Executive’s written consent: (a) a material
diminution in the Executive’s duties or responsibilities; (b) the Company
requires the Executive, without his or her consent, to be based at a location
which is more than 50 miles from the Executive’s principal work location as of
the date of the request; (c) the Executive’s base salary is reduced by
greater than 15%; or (d) the Executive


 

















 


experiences
in any year a reduction in the target ratio of the Executive’s annual
short-term incentive compensation, bonus or other such payments to base
compensation greater than 15%, or a change in the method of calculation of the
Executive’s annual short-term incentive compensation, bonus or other such
payments that results in a reduction of the Executive’s target annual
short-term incentive compensation, bonus or other such payments to base compensation
greater than 15%, unless such reductions are due to an increase in base
compensation.  Notwithstanding the above, any reduction in base salary,
annual short-term incentive compensation, bonus or other such payments that
affects substantially all U.S. employees, shall not constitute Good
Reason.  In addition, the Executive
agrees that a termination of employment shall not be deemed to be for Good
Reason unless (i) the Executive gives the Company written notice
describing the event or events which are the basis for such termination within
45 days after the event or events occur, (ii) such grounds for termination
(if susceptible to correction) are not corrected by the Company within 45 days
of the Company’s receipt of such notice, and (iii) the Executive
terminates employment no later than 30 days after the expiration of the cure
period described in clause (ii) of this paragraph.


 


3.             Delay of Payment Pursuant to Section 409A.  The parties agree that this Agreement is intended to comply with the
requirements of Section 409A of the Code and the regulations promulgated
thereunder (“Section 409A”)
or an exemption from Section 409A. 
For purposes of this Agreement, each amount to be paid or benefit to be
provided hereunder shall be construed as a separate identified payment for
purposes of Section 409A.  With
respect to any reimbursement of expenses of, or any provision of in-kind
benefits to, the Executive, as specified under this Agreement, such
reimbursement of expenses or provision of in-kind benefits shall be subject to
the following conditions: (i) the expenses eligible for reimbursement or
the amount of in-kind benefits provided in one taxable year shall not affect
the expenses eligible for reimbursement or the amount of in-kind benefits
provided in any other taxable year, except for any medical reimbursement
arrangement providing for the reimbursement of expenses referred to in Section 105(b) of
the Code; (ii) the reimbursement of an eligible expense shall be made no
later than the end of the year after the year in which such expense was
incurred; and (iii) the right to reimbursement or in-kind benefits shall
not be subject to liquidation or exchange for another benefit.  Notwithstanding anything to the contrary in
this Agreement,  no compensation or benefits
payable in connection with a Separation from Service shall be paid to the
Executive during the six-month period following such Separation from Service to
the extent that the Company reasonably determines that the Executive is a “specified
employee” at the time of such Separation from Service and that paying such
amounts at the time or times indicated in this Agreement would be a prohibited
distribution under Internal Revenue Code Section 409A(a)(2)(b)(i).  If the payment of any such amounts is delayed
as a result of the previous sentence, then on the first business day following
the end of such six-month period (or such
earlier date upon which such amount can be paid under Section 409A without
being subject to such additional taxes, including as a result of the Executive’s
death), the Company shall pay to the
Executive a lump-sum amount equal to the cumulative amount that would have
otherwise been payable to the Executive during such six-month period, without
interest thereon.


 


4.             Dispute Resolution. Either the Executive or the Company may elect to have any good faith
dispute or controversy arising under or in connection with this Agreement
settled by


 

















 


arbitration by providing written notice of such
election to the other party specifying the nature of the dispute to be
arbitrated.  If arbitration is selected, such proceeding shall be submitted to
confidential, final and binding arbitration before JAMS (formerly known as
Judicial Arbitration and Meditation Services) sitting in a location agreed to by the Company and the Executive within 50
miles from the location of the Executive’s principal place of employment and conducted
under the auspices and then-existing Employment Arbitration Rules of JAMS.  The decision of the
arbitrator shall be final and binding on both parties, provided however, that
the arbitrator shall not have the authority to alter or amend, or add to or
delete from the provisions of this Agreement in any way, except as provided
herein.  To the extent that the Executive prevails on the material issues in any
litigation or arbitration seeking to enforce the provisions of this Agreement,
the Executive is entitled to reimbursement by the Company of all expenses of
such litigation or arbitration, including any reasonable legal fees and expenses
and any costs and disbursements as such costs may be awarded by the court or
arbitrator.


 


The Executive shall be entitled to reimbursement
of the fees and expenses described under this Section 4 during the period
commencing on the effective date of this Agreement and ending on the Executive’s
death.  Any reimbursement of fees and expenses under this Agreement shall
be made on or before the last day of the year following the year in which the
expense is incurred.  The amount of fees and expenses eligible for
reimbursement during a year shall not affect the expenses eligible for
reimbursement in any other year except for any medical reimbursement
arrangement providing for the reimbursement of expenses referred to in Section 105(b) of
the Code.  The right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit.


 


5.             Miscellaneous.


 


5.1          Entire Agreement.  This Agreement supersedes any prior agreements or
understandings, oral or written, between the Executive and the Company with
respect to the subject matter hereof, and constitutes the entire agreement of
the parties with respect thereto.


 


5.2          Modification.  This Agreement shall not be varied, altered,
modified, cancelled, changed or in any way amended except by mutual agreement
of the parties in a written instrument executed by the parties or their legal
representatives.


 


5.3          Severability.  In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason,
the remaining provisions of this Agreement shall be unaffected and shall remain
in full force and effect.


 


5.4          Tax Withholding.  The Company may withhold all Federal, state, city
or other taxes required pursuant to any law or governmental regulation or
ruling.


 


5.5          Board Committee.   Any action taken or determination made by the
Board of Directors under this Agreement may be taken or made by the
Compensation Committee or any other Committee of the Board of Directors.


 

















 


5.6          No
Offset or Mitigation.  All amounts payable by the Company
hereunder shall be paid without notice or demand.  The Executive shall not
be obligated to seek other employment in mitigation of the amounts payable or
arrangements made under this Agreement, and the obtaining of any other employment
shall not result in a reduction of the Company’s obligations to make the
payments, benefits and arrangements required to be made under this Agreement.


 


5.7          Confidentiality. 
The Executive understands that, in the course of employment with the
Company, the Executive has been, and will be, given access to confidential
information and trade secrets concerning the Company and its businesses and
shall during his or her employment with the Company and thereafter retain in
confidence and not directly or indirectly reveal, report, publish, disclose, or
transfer such confidential information and trade secrets to any person or
entity, or utilize any confidential information and trade secrets for any
purpose, except in the good faith performance of the Executive’s duties on
behalf of the Company.  Notwithstanding
the foregoing, “confidential information” shall not apply to information that (i) was
known to the public prior to its disclosure to the Executive; (ii) becomes
generally known to the public subsequent to disclosure to the Executive through
no wrongful act of the Executive or any representative of the Executive; or (iii) the
Executive is required to disclose by applicable law, regulation or legal
process (provided that the Executive provides the Company with prior
notice of the contemplated disclosure and reasonably cooperates with the
Company at its expense in seeking a protective order or other appropriate
protection of such information).  The
Executive agrees to turn over all copies of confidential information and trade
secrets in his control to the Company upon request or upon termination of his
or her employment with the Company.


 


5.8          Solicitation.  The Executive agrees that, during his
employment with the Company and for the period of one year beginning from the
date of the Executive’s Separation from Service, Executive shall not, directly
or indirectly or by action in concert with others, hire current or former
employees, agents, independent contractors, or other service providers of the
Company (which shall for this purpose only include individuals employed by the
Company at any point during the 12 months preceding such hiring), disrupt,
damage, impair or interfere with the Company’s relationships with its work
staff, or induce or influence (or seek to induce or influence) any person who
is engaged (as an employee, agent, independent contractor, or otherwise) by the
Company to alter or terminate his or her employment or engagement, except in
the good faith performance of the Executive’s duties on behalf of the Company; provided
that the Executive may serve as a reference for such individuals and actions
taken by any person or entity with which the Executive is associated if the
Executive is not, directly or indirectly, personally involved in such
solicitation and has not identified such individual for soliciting will not be
considered a violation for purposes of this Section 5.8.  This shall not be construed to prohibit
general solicitations of employment through the placing of advertisements.


 


The obligations contained in Section 5.7 and this Section 5.8
shall survive the termination of the Executive’s employment with the Company
for any reason and shall be fully enforceable thereafter.


 

















 


The Company may bring an action or proceeding to temporarily, preliminarily
or permanently enforce any part of Section 5.7 and this Section 5.8.  The Executive agrees that (a) violating
any part of Section 5.7 and this Section 5.8 would cause damage to
the Company that cannot be measured or repaired and that the Company’s remedies
at law for a breach or threatened breach of any of the provisions of Section 5.7
and this Section 5.8 would be inadequate, (b) the Company therefore
is entitled to an injunction, restraining order or other equitable relief
restraining any actual or threatened violation of Section 5.7 and this Section 5.8
in addition to any remedies at law, (c) no bond will need to be posted for
the Company to receive such an injunction, order or other relief, and (d) no
proof will be required that monetary damages for violations of Section 5.7
and this Section 5.8 would be difficult to calculate and that remedies at
law would be inadequate.  In addition, in
the event of a violation by the Executive of Section 5.7 and this Section 5.8,
any severance payments or benefits being paid to the Executive pursuant to this
Agreement or otherwise shall immediately cease and any severance previously
paid to the Executive shall be immediately repaid to the Company.


 


5.9          Non-Compete.  Eligibility for payments and benefits under Section 1
is contingent upon the Executive’s agreement and compliance with the Company’s
requirement that the Executive not accept employment or an engagement as a
consultant with a competitor for a period of one year beginning on the date of
the Executive’s Separation from Service whereupon such position is comparable
to the position the Executive held with the Company and where the Executive
cannot reasonably satisfy the Company that the new employer is prepared to
and/or does take adequate steps to preclude and to prevent inevitable
disclosure of trade secrets, as prohibited under the Company’s policies with
respect to the use and disclosure of confidential and proprietary information,
as set forth in the most-recent confidentiality and inventions agreement that
the Executive has executed with the Company and by this reference made a part
hereof.  It is a specific condition of this Agreement that, for a period
of one year following the date of the Executive’s Separation from Service, the
Executive is obligated to immediately notify the Company as to the specifics of
the new position that the Executive is planning to commence as an employee or
consultant for any company which is a competitor of the Company.


 


5.10        Successors.  This
Agreement shall be binding upon and inure to the benefit of the Executive and
his or her estate, and the Company and any successor of the Company or
affiliate of a successor to the Company, but neither this Agreement nor any
rights arising hereunder may be assigned or pledged by the Executive.  All
references in this Agreement to the Company shall include its subsidiaries and
affiliates and any successors, affiliates of successors or assigns of the
Company. Any successor of the Company shall be deemed substituted for all
purposes of the “Company” under the terms of this Agreement.  As used in
this Agreement, the term “successor” shall mean any person, firm, corporation
or business entity or affiliate thereof which at any time, whether by merger,
purchase or otherwise, directly or indirectly acquires all or substantially all
of the assets or the business of the Company, including any entity that shall
be the surviving corporation in a merger with the Company or the acquiring
person or affiliate of the acquiring person in an acquisition of the Company
and/or of all or substantially all of its business or assets, regardless of
whether such transaction constitutes a change of control.  In all cases,
the Company or successor shall remain jointly and severally liable for all
obligations hereunder.


 

















 


5.11        Governing Law.   To the extent not preempted by Federal law, the
provisions of this Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California.


 


5.12        Notice.   Any notices, requests, demands or other communications required by
or provided for in this Agreement shall be sufficient if in writing and sent by
either party by personal delivery, recognized overnight commercial courier, or
registered or certified United States mail to the Executive at the last
address  shown on the records of the
Company or, in the case of the Company, at its principal office, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, and shall be deemed to have been duly given when
delivered or five days after deposit in the United States mail (except that notices of change of address shall be
effective only upon receipt (or refusal of receipt)).


 


5.13        Scope of Agreement.  Nothing in this
Agreement shall be deemed to alter the “at-will” nature of the Executive’s
employment or entitle the Executive to continued employment with the Company.


 


5.14        Counterparts.  This Agreement
may be executed (including by facsimile or scanned electronic mail transmission)
in counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.


 

















 


IN WITNESS WHEREOF, the Executive and the Company
have executed this Agreement as of the date first above written.


 


	
  MRV
  COMMUNCATIONS, INC.

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
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  Name:

  	
   

  	
   

  
	
  Title: