Exhibit 10.1


 


	
  To:
  Mr.  Guy Avidan

  	
  May 25, 2010

  
	
   

  	
   

  
	
  Dear
  Guy,

  	
   

  



 


Re: Termination of
Relationship


 


Further to our several conversations in December 2009
regarding your disagreement regarding your employment with MRV
Communications (Networks), Ltd.  (the “Employer”) and your services as Co -
president of MRV Communications, Inc. (the “Company”) and
President of its Network Equipment Group, I am writing to confirm the
following:


 


1.             The
parties have jointly agreed that the effective date of the termination of your
employment relationship with the Employer would be February 11, 2010 (the “Effective Date”).


 


2.             [Intentionally
omitted.]


 


3.             As
of the Effective Date, any entitlement or obligation you had or may have had
under your secondment agreement dated July 2009 (the “Secondment Agreement”) and/or under any
other understanding with the Employer and/or the Company, written or otherwise,
ended, except for those entitlements and obligations set forth herein.


 


4.             As
consideration for termination of your employment with the Employer, including
without limitation, performing the duties for the Company, you shall be
entitled to the consideration as described below (the “Consideration”). Sections 4.1- 4.4 shall be
paid to you as part of your last pay-slip. The Employer shall withhold or
charge you with all taxes and other compulsory payments as required under law
in respect of the all the benefits as described thereof:


 


4.1.             Salary:
Through the Effective Date you were entitled to and paid out in full a gross
monthly salary at the rate of 50,000 NIS and 5,416.67 U.S. dollars;


 


4.2.             Accumulated Vacation Days: A gross sum equal to 289,347 NIS for any balance of accumulated
vacation days which has been paid out to you;


 


4.3.             Convalesce Pay:
A gross sum equal to 425 NIS for a pro-rata portion of the annual convalesce
which has been paid out to you;


 


4.4.             Business Expenses and reimbursement for foreign
exchange rate: A gross amount of
48,838.86 USD incurred by you in connection with your business expenses during
your employment including reimbursement for foreign exchange rate.


 


4.5.             Severance Fund:  The
Employer shall make available to you the amounts accrued under the Kopot Gemel
Le’Kizba in the approximate amount of 555,288 NIS (as of February 18,
2010).


 


4.6.             Keren Hishtalmut Fund: The Employer made available to you all the amounts accumulated on your
behalf in the study fund (Keren Hishtalmut Fund).


 


4.7.             Special Compensation:
In addition to the above-mentioned, in consideration for your undertakings
according to Sections 7 - 9 below, the Employer hereby undertakes to pay you a
special compensation equal to a gross amount of 209,283 NIS. Such Special
Compensation shall be paid to you by the Employer, subject to your fulfillment
of your undertakings according to


 

















 


Sections 7 - 9
below, in four equal installments during 24 months, 25% upon completion of each
period of six months following the Effective Date.  The tax rate of withholding shall be as
provided to the Employer by you within two weeks of the execution of this
Agreement, or if no certificate of withholding is provided, the maximum rate
will be used.  The payments shall be made
through Goldfarb, Levy, Eran, Meiri, Tzafrir & Co., Law Offices,
acting as trustee for the payment of such amounts.


 


5.             Without
derogating from any right you might be entitled to in connection with the
payments and other consideration described in this letter agreement, when
received by you in accordance with the terms hereof in addition to all payments
and other consideration which you had already received by the Employer, are a
complete payment of any and all consideration owed to you by Employer, Company
or anyone on their behalf (hereinafter collectively referred to as the “MRV Group”) arising out of your employment
or the termination of your employment with the Employer, or that otherwise
might be owed to you by the MRV Group, including, without limitation, any and
all claims for wages, social benefits, commissions, incentives, stock or stock
options, bonus, severance pay, severance pay which accumulated as a managers’
insurance, release funds, notice period, reimbursement for foreign exchange
rate, deferred compensation payments, expenses, contractual obligations and all
other payments, compensation, benefits, and reimbursement of any kind. Notwithstanding
the provisions of the previous sentence, the waiver and release made by you
shall not include your rights to indemnification as provided for in the
Certificate of Incorporation and By-laws of the Company and the Employer, any
agreements of the Company or existing as a matter of law for your acts or
omissions as an officer of the Company and Employer.


 


6.             You
are required to deliver to the Employer, prior to execution of this letter
agreement the Employer’s laptop, car, cellular phones and all documents of the
Employer, which were received or prepared by you in connection with your
employment with the Employer and are in your possession or control at the
Employer’s premises or elsewhere, without retaining any copies thereof other
than copies of such documents.  You hereby
undertake that during your employment period you did not make any use,
including duplication, production, sale, transfer, imitation and distribution,
of all or any of the Confidential Information (as defined below), without the
prior written consent of the Employer.


 


7.             Confidentiality.


 


7.1.             You hereby undertake that as
of the date hereof and upon termination of your employment, you maintained and
shall maintain in complete confidence any matters that relate to MRV Group
and/or its business, including regarding Confidential Information (as defined
below) and the terms and conditions of your termination of your employment
pursuant to this letter, and that you shall not harm its goodwill or
reputation, and you agree to the provisions of the confidentiality,
non-competition and intellectual property sections as specified in this letter.


 


7.2.             Without derogating from the
generality of the foregoing, you hereby agree that you did not and shall not,
directly or indirectly, disclose or transfer to any person or entity, at any
time, either during or subsequent to your employment period, any trade secrets
or other confidential information, whether patentable or not, of the MRV Group,
including but not limited to, any (i) processes, formulas, trade secrets,
innovations, inventions, discoveries, improvements, research or development and
test results, survey, specifications, data and know-how; (ii) marketing
plans, business plans, strategies, forecasts, unpublished financial
information, budgets, projections, product plans and pricing; (iii) personnel
information, including organizational structure, salary, and qualifications of
Executives; (iv) customer and supplier information, including identities,
product sales and purchase history or forecasts and agreements; and (v) any
other information which is not known to the public (collectively, “Confidential Information”), of which you
were, are, or becomes informed or aware during the employment period, whether
or not developed by you.


 


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7.3.             In the event that you shall
be in breach of any of your above obligations, you shall be liable to
compensate MRV Group in respect of all direct
damages and/or direct expenses incurred by MRV
Group as a result of such breach, including trial costs and legal fees and
statutory VAT, and such being without derogating from any other relief and/or
remedy available to MRV Group by virtue of
any law.


 


8.             Unfair Competition and Solicitation.


 


8.1.             In addition, you hereby undertake
that during the period of employment with the Employer and for a period of 24
months from the Effective Date, you shall not, anywhere in the world, do
business, as an employee, independent contractor, consultant or otherwise, and
shall not directly or indirectly participate in or accept any position,
proposal or job offer that may directly compete with or harm MRV Group based on
all activities known to you as of the Effective Date that the Company engages
in, or is about to be engaged in (the “Competitive
Occupation”) or which is reasonably likely to involve or require the
use of any of the MRV Group’s Major Assets (as defined below), without the
written consent of the Company’s Chief Executive Officer.


 


8.2.             In addition, you undertake
not to approach and/or solicit and/or recruit any employee or former employee
(as defined below) of the Employer and/or Company to leave the Employer and/or
Company for a period of 24 months from the Effective Date, and the hiring by
you or your future employer (if with your knowledge prior to a hiring decision)
of an employee or former employee of the Employer or Company during such
24-month period shall be considered a material breach of this Agreement.  For purposes of this paragraph, a “former
employee” is defined as a person who was employed by the Employer and/or
Company at any time within the period from three months prior to the Effective
Date through two years after the Effective Date.


 


8.3.             The foregoing shall apply
irrespective of whether the Competitive Occupation is carried out by you alone
or in cooperation with others and shall apply to the participation of you in a
Competitive Occupation, whether as a controlling shareholder or as an
interested party.


 


9.             Ownership
of Inventions.


 


9.1.             You hereby assign to the
Employer, all of your rights, title and interest in and to all inventions,
trade secrets, professional secrets, innovations, copyrightable works,
Confidential Information, discoveries, processes, designs, works of authorship,
and other intellectual property and all improvements on existing inventions,
discoveries, processes, designs, works and other intellectual property made or
discovered by you or any person subordinate to you during your employment with
the Employer or in connection thereof, for no additional consideration provided
that you shall not be required to bear any expenses as a result of such
assignment. The Employer and its successors shall be entitled to protect any
invention and/or patent and/or trade secret and/or professional secret and/or
innovation as aforesaid by way of registration and/or in any other manner, in
U.S.A, Israel or anywhere else.


 


9.2.             You undertake that upon the
demand of the Employer, you shall sign, execute and deliver to the Employer
such documents as the Employer may request to confirm the assignment of your
rights herein, and if requested by the Employer, shall assist the Employer, and
shall execute any necessary documents, at the Employer’s expense, in applying
for and prosecuting any patents, trademarks, trade secrets or copyright
registration which may be available in respect thereof in accordance with the
laws of the State of Israel or any other foreign country.


 


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10.          General


 


10.1.           Your obligations pursuant to
Sections 7 - 9 above shall survive the termination of your employment with the
Employer.


 


10.2.           Your undertakings and
obligations pursuant to Sections 7 - 9 derive from your status and your
position in the Employer and in the Company, in view of your exposure to, and
involvement in, the MRV Group’s sensitive and valuable proprietary information,
property (including, Proprietary Rights) and technologies, as well as its
goodwill and business plans (the “MRV Group’s
Major Assets”), and along with all matters connected therewith, and
the terms and conditions of this letter, including the Special Consideration
(defined in Section 4.5 above), have been determined in part, inter alia,
in consideration of these undertakings and obligations and constitute
sufficient consideration for your said undertakings and obligations.


 


10.3.           You acknowledge that the
restricted period of time and geographical area specified in Section 8 are
necessary to legitimately protect the MRV Group’s Major Assets, in view of your
position and the nature of the business in which the Employer and the Company
are engaged, your knowledge of the MRV Group’s business and the compensation
you received during your employment at the Employer and as part of your
resignation as described in this letter agreement, including the Special
Consideration (defined in Section 4.5 above).  Notwithstanding anything contained herein to
the contrary, if the period of time or the geographical area specified herein
should be determined to be unreasonable in any judicial proceeding, then the
period of time and area of the restriction shall be reduced so that this letter
agreement may be enforced in such area and during such period of time as shall
be determined to be reasonable by such judicial proceeding. You acknowledge
that the compensation and benefits granted to you by the Employer under this
letter agreement were determined, inter alia, in consideration for your
obligations under Sections 7 - 9 above.


 


10.4.           This letter agreement shall be governed by Israeli law (excluding its
choice of law provisions), and the competent courts of Tel Aviv-Jaffa shall
have the sole and exclusive jurisdiction over any dispute in connection
herewith.


 


10.5.           This letter agreement is and shall, be considered a settlement and
notice of waiver in accordance with Section 29 of the Severance Pay Law of
1963.


 


10.6.           A copy of a translation of this letter agreement in Hebrew is attached
hereto as Exhibit B, however, if there are any discrepancies between this
letter agreement and its translation, the terms of this letter agreement shall
control.


 


We wish you
success in your future plans.


 


 


	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  MRV Communications (Networks), Ltd.

  



 


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I, Guy Avidan, hereby agree to the above
letter agreement and obligate to fulfill my obligations according to it.


 


I hereby waive any and all rights I may have
for the repayment of money from payments made by the Employer (or on its behalf) to me in respect to severance pay at any fund. I
hereby confirm that the Employer is and
shall be the sole owner of such severance
pay made by the Employer (or on its
behalf).


 


In addition, but without derogating from any
right to the Compensation according to Section 4 above, I hereby accept
the payments and Consideration described herein above as full, complete and
unconditional payment and satisfaction of any and all obligations of the
Employer and/or any of MRV Group arising
out of all my employment period or termination of such period or that otherwise
might be owed to me by the Employer and/or any of MRV Group including, without limitation, any and all claims for wages, social
benefits, commissions, incentives, stock or stock options, bonus, severance
pay, severance pay which accumulated at a managers’ insurance,  release funds, notice period, reimbursement
for foreign exchange rate, deferred compensation payments, expenses,
contractual obligations and all other payments, compensation, benefits, and
reimbursement of any kind.


 


I hereby release and forever discharge MRV Group, its investors, stockholders, officers, affiliated organizations, or
anyone on its behalf (hereinafter collectively referred to as the “Employers”), from any and all claims,
rights, obligations, damages and liabilities of any nature whatsoever including
severance pay, whether or not now known, suspected or claimed, which I ever
had, now have, or may claim to have in connection with my employment with the
Employer or termination thereof against the Employers.


 


I acknowledge that my obligations and
undertakings mentioned above in Sections 7 - 9 shall survive the termination of
my employment with the Employer. Such obligations and undertakings seem
reasonable and necessary to legitimately protect the business of the Employer
and/or any of MRV Group and the MRV Group’s Major Assets. The Special
Consideration (defined in Section 4.5 above), have been determined in
consideration of these undertakings and obligations and constitutes sufficient
consideration for such undertakings and obligations.


 


I acknowledge that I have read and fully
understand the terms of this letter agreement and fully understand the
consequence thereof; that I have consulted
and received advice of counsel regarding same and have had sufficient
opportunity to do so; and that I have executed this letter agreement freely and
voluntarily.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  Guy Avidan

  



 


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