Exhibit
10.1


 


	
  

  	
  20415 Nordhoff Street

  
	
   

  	
  Chatsworth, California 91311

  



 


SEPARATION AND RELEASE AGREEMENT


 


This SEPARATION AND RELEASE AGREEMENT (this “Agreement”)
is entered into as of the 8th day of June, 2010, by and between MRV
Communications, Inc., a Delaware corporation (“MRV”)
and Noam Lotan (the “Executive”).


 


WHEREAS, MRV and the Executive are parties to a
Key Employee Agreement dated as of March 23, 1992, as amended on August 10,
1992 and November 16, 1994 (the “Employment Agreement”);


 


WHEREAS, the Executive and MRV agree to terminate
his employment with MRV; and


 


WHEREAS, the Executive and MRV intend the terms
and conditions of this Agreement to govern all issues related to the Executive’s
employment and separation from MRV.


 


NOW, THEREFORE, in
consideration of the covenants and mutual promises contained in this Agreement,
the Executive and MRV agree as follows:


 


1.             Resignation; Termination of Employment.  The Executive hereby confirms that (a) effective
as of June 30, 2010 (the “Termination Date”),
his employment with MRV will terminate and he will resign from his position as
Chief Executive Officer of MRV and as a director of MRV and (b) he will
not be eligible for any benefits or compensation after the Termination Date,
other than as specifically provided herein. 
In addition, effective as of the Termination Date, the Executive hereby
confirms his resignation from all other offices, directorships, trusteeships,
committee memberships and fiduciary capacities held with, or on behalf of, MRV
or its subsidiaries or affiliates (collectively, “Affiliates”)
or any benefit plans of MRV or any Affiliate. 
The Executive will execute the resignations attached as Exhibit A
contemporaneously with his execution of this Agreement.  On and after the Termination Date, the
Executive acknowledges and agrees that he will not represent himself as being
an employee, officer, director, trustee, member, partner, agent or
representative of MRV or any Affiliate for any purpose and will not make any
public statements on behalf of MRV or any Affiliate.


 


2.             Severance Benefits.  Subject to the terms and conditions of this
Agreement, including the Executive’s executing (and not revoking) this
Agreement and the Supplemental General Release, the Executive acknowledges and
agrees that he will not be eligible for any compensation or benefits after the
Termination Date except for the following:


 


a.             Lump Sum
Severance Payment.  A cash
payment paid in two installments, provided that the Executive has not revoked
the execution of this Agreement or the Supplemental General Release:  the first installment of $548,537.50


 

















 


will be paid on the 30th
day following the Termination Date and the second installment of $85,000 will
be paid on January 2, 2011.


 


b.             Employee
Benefits.


 


(i)            Health Benefits. 
Subject to
the Executive’s timely election of continuation coverage under the Consolidated
Budget Omnibus Reconciliation Act of 1985, as amended (“COBRA”)
and remaining eligible for COBRA coverage, continued participation in the
medical, dental and vision plans maintained by MRV for a period of up to 18
months following the Termination Date (the “Coverage
Period”) as if the Executive had continued in employment with
MRV during such period (including the Executive’s obligation to pay the
employee portion of any contribution or premium but excluding an employee’s
ability to pay premiums with pre-tax dollars). 
If the Executive continuously receives health benefits under this Section 2.b.(i) from
the Termination Date through the end of the Coverage Period, MRV shall
thereafter, for a period of up to six months, pay the Executive on the first
business day of each month, a lump sum cash amount equal to the employer
portion of the premium cost MRV would have paid on the Executive’s behalf if he
were an active employee of MRV. 
Notwithstanding the foregoing, MRV’s obligations under this Section 2.b.(i) shall
terminate if the Executive fails to pay any required contribution or premium or
if the Executive becomes eligible for health benefits of a subsequent employer
(whether or not the Executive accepts such benefits), except that MRV’s
obligation to continue to make available continuation coverage under COBRA at
the full COBRA rates shall be determined in accordance with COBRA.  The Executive will notify MRV of his
eligibility for medical, dental or vision benefits from a subsequent employer
within 30 days of such eligibility.


 


(ii)           Tax-Qualified Plans.  The Executive
shall be eligible to receive any accrued, vested benefits to which he is
otherwise entitled under the tax-qualified 401(k) plans maintained by MRV
and its Affiliates.


 


c.             Stock
Options.  Pro-rata vesting
as of the Termination Date of the outstanding unvested stock option to purchase
shares of common stock of MRV granted on October 29, 2002.  A list of the Executive’s outstanding stock
options that will be vested as of the Termination Date is attached as Exhibit B. 
Except as set forth on Exhibit B hereto, all outstanding
stock options vested as of the Termination Date will remain exercisable until
the third anniversary of the Termination Date, but in no event beyond the
actual expiration date of the stock option set forth on Exhibit B,
and will remain subject to all of the terms and conditions of, the applicable
stock option plan and stock option agreement, to the extent not contrary to the
terms of this Agreement.  Any stock
options not vested as of the Termination Date automatically shall be forfeited
as of the Termination Date.


 


d.             Outplacement
Services.  Provision of
outplacement services during the six-month period following the Termination
Date (or, if earlier, until the first acceptance by the Executive of an offer
of employment) through a reputable and experienced vendor selected by MRV, up
to a maximum cost to MRV of $7,500.


 


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e.             Other
Amounts.  A lump sum cash
payment on the date the first installment payment specified in sub-paragraph
2.a above is to be paid equal to the sum of (i) the reasonable business
and entertainment expenses incurred by the Executive prior to the date of this
Agreement and reimbursable under MRV’s expense reimbursement policy (subject to
the Executive’s presentation of appropriate documentation prior to the
Termination Date) and (ii) the Executive’s accrued but unused vacation
time through the Termination Date required to be paid under MRV’s vacation
policy.


 


3.             Return of Property.  The Executive represents to MRV that he
has destroyed or returned to MRV any and all files or other property (both
tangible and intellectual) of MRV and any Affiliate containing or relating to
Confidential Information (as defined below) and any and all other property
belonging to MRV and its Affiliates, including, but not limited to, all
rolodexes (except to the extent such rolodex does not contain information other
than name, address, telephone number and similar information), identification
cards, credit cards, computers, fax machines, cellular or other telephones,
Blackberries, beepers, PDA’s, keys, card access keys to any building of MRV or
any Affiliate, deeds, contracts, office equipment and supplies, records and
computer disks.


 


4.             Full Discharge.  The Executive agrees and acknowledges that
the payments and benefits provided in Section 2 and the other
entitlements hereunder: (a) are in full discharge of any and all
liabilities and obligations of MRV to the Executive, monetarily or with respect
to compensation (including base salary and bonus), employee benefits or
otherwise, including any and all obligations arising under any alleged written
or oral employment agreement, policy, plan or procedure of MRV or any
Affiliate, including the Employment Agreement and/or any alleged understanding
or arrangement between the Executive and MRV or any of its officers or
directors; and (b) exceed any payment, benefit, or other thing of value to
which the Executive might otherwise be entitled but for this Agreement under
any policy, plan or procedure of MRV or any prior agreement between the
Executive and MRV, except for accrued, vested amounts under any tax-qualified
401(k) plans maintained by MRV and its Affiliates, which amounts, if any,
will be paid in accordance with the terms of such plan.  Notwithstanding the foregoing, the Executive
will retain any conversion rights he may have under the key man life insurance
policy maintained by MRV covering his life.


 


5.             Future Conduct and Obligations.


 


a.             Continuing
Obligations under the Employment Agreement.  The Executive hereby agrees that the
termination of the Executive’s employment will not affect the provisions of the
Employment Agreement which impose continuing obligations on him following
termination of the Employment Agreement and specifically acknowledges the
existence and applicability of Sections 6 and 7 thereof (including the
Proprietary Information and Inventions Agreement).  Such restrictions will remain in full force
and effect following the Termination Date as provided in the Employment
Agreement.


 


b.             Confidentiality. 
The Executive agrees that, following the Termination Date, he will not,
directly or indirectly, use, make available, sell, disclose or otherwise
communicate to any person, any business and technical information or trade
secrets, 


 


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nonpublic, proprietary or
confidential information, knowledge or data relating to MRV, its Affiliates or
their businesses, which the Executive obtained during his employment with MRV (“Confidential Information”).  Notwithstanding the foregoing, “Confidential
Information” will 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 of the Executive’s; or (iii) the
Executive is required to disclose by applicable law, regulation or legal
process (provided that the Executive provides MRV with prior notice of the
contemplated disclosure and reasonably cooperate with MRV at its expense in
seeking a protective order or other appropriate protection of such
information).


 


c.             Non-Solicitation
of Business Partners. 
Unless prior written approval is given by the Chairman of the Board of
Directors of MRV or the Chief Executive Officer of MRV, the Executive agrees
that, during the two-year period following the Termination Date (the “Restricted Period”), he 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 MRV and its Affiliates to terminate the business
relationship of such person with MRV and its Affiliates, to materially reduce
the amount of business conducted with MRV and its Affiliates or in any way
interfere with the relationship between any such business partner, vendor,
customer or supplier and MRV and its Affiliates.


 


d.             Non-Solicitation
of Employees.  Unless
prior written approval is given by the Chairman of the Board of Directors of
MRV or the Chief Executive Officer of MRV, the Executive agrees that, during
the Restricted Period, he will not, either directly or indirectly, hire
employees or former employees of MRV and its Affiliates (which shall for this
purpose only include individuals employed by MRV and its Affiliates 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 MRV and its Affiliates to leave the employ of MRV and its
Affiliates, nor will he help others to do so.


 


e.             Non-Disparagement. 
The Executive, for himself and for his heirs, dependents, assigns,
agents, executors, administrators, trustees and legal representatives agrees
that he will not, or encourage or induce others to, Disparage MRV, its
Affiliates or any of their past and present officers, directors, employees,
stockholders, products or services.  “Disparage” includes, without
limitation, making comments or statements to the press, MRV’s or any Affiliate’s
employees or any individual or entity with whom MRV or an Affiliate has a business
relationship (including, without limitation, any vendor, supplier, customer or
distributor of MRV or any Affiliate) that could adversely affect in any manner:
(i) the conduct of the business of MRV or any Affiliate (including,
without limitation, any products or business plans or prospects); or (ii) the
business reputation of MRV, its Affiliates, or any of their products or
services, or the business or personal reputation of MRV’s or an Affiliate’s
past or present officers, directors, employees or stockholders.  MRV agrees that it will not issue any press
release or other official written statement, and it will direct its senior
executive officers as of the Termination Date and directors of MRV as of the
Termination Date, while employed by MRV or serving as a director of MRV, to not
make any public statements that could 


 


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adversely affect the
business or personal reputation of the Executive.  Nothing herein shall prohibit either party (A) from
responding truthfully to any governmental investigation, legal process or
inquiry related thereto or from fulfilling any disclosure requirements or (B) from
making statements such party in good faith believes are necessary or
appropriate to make to rebut untrue or misleading statements by the other, and
the limitations on MRV’s senior executive officers and directors shall not
prohibit statements they believe are reasonably necessary or appropriate to
make in connection with the good faith performance of their duties for MRV and
its Affiliates.


 


f.              Other Assistance. 
Upon the receipt of notice from MRV (including outside counsel), the
Executive agrees to respond and provide information with regard to matters in
which he has knowledge as a result of his employment with, or serving as a
director of, MRV and to assist and cooperate with MRV and its representatives
in the defense or prosecution of any claims that may be made or threatened by
or against MRV or any Affiliate, to the extent that such claims may relate to the
period of the Executive’s employment or service with MRV, including any
proceeding before any arbitral, administrative, judicial, legislative, or other
body or agency, including preparing for and testifying in any proceeding to the
extent such claims, investigations or proceedings relate to services performed
by the Executive, pertinent knowledge possessed by the Executive, or any act or
omission by the Executive.  The Executive
will perform such acts and execute and deliver such documents that may be reasonably
necessary to carry out the provisions of this Section 5.f.  The Executive agrees to promptly inform MRV
if he becomes aware of any lawsuits involving such claims that may be filed or
threatened against MRV or any Affiliate. 
The Executive also agrees to promptly inform MRV (to the extent he is
legally permitted to do so) if he is asked to assist in any investigation of
MRV or any Affiliate (or their actions), regardless of whether a lawsuit or
other proceeding has then been filed against MRV or an Affiliate with respect
to such investigation, and will not do so unless legally required.  Upon presentment to MRV of appropriate
documentation, MRV will reimburse the Executive for the reasonable
out-of-pocket expenses incurred as a result of such cooperation.  MRV agrees that it will coordinate any such
request for cooperation with the Executive’s other business or professional
commitments and responsibilities to minimize the degree to which such request
interferes with such commitments and responsibilities.


 


g.             Tolling.  In the event of any violation of the
provisions of this Section 5, the Executive acknowledges and agrees
that the post-termination restrictions contained in this Section 5
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.


 


h.             Equitable
Relief.  Notwithstanding anything in this Agreement to
the contrary, in the event of a breach or threatened breach by either party of
the provisions of Section 5, (i) the Executive acknowledges
that MRV’s and its Affiliates’ remedies at law would be inadequate and MRV acknowledges that the
Executive’s remedies at law would be inadequate and, in recognition of this
fact, each party agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, each party, without posting any
bond, shall be entitled to obtain equitable relief in the form of specific 


 


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performance, a temporary
restraining order, a temporary or permanent injunction or any other equitable
remedy which may then be available and (ii) any controversy or claim
arising out of or relating to Section 5 will not be settled by
mediation or arbitration and the parties hereby irrevocably submit to the
exclusive jurisdiction of any state or federal court in Los Angeles, California
for any suit, action or proceeding arising out of or relating to or concerning Section 5
of this Agreement.


 


i.              Reformation.  If it is determined by any court of competent
jurisdiction that the covenants in this Section 5 are unenforceable
under the laws of any state by reason of their extending for too great a period
of time or over too great a geographical area or by reason of their being too
extensive in any other respect, they shall be interpreted to extend only over
the maximum period of time for which they may be enforceable and/or over the
maximum geographical area as to which they may be enforceable and/or to the
maximum extent in all other respects as to which they may be enforceable, all
as determined by such court in such action.


 


6.             General Release.


 


a.             For and in consideration of the
payments to be made and the promises set forth in this Agreement, the
Executive, for himself and for his heirs, dependents, assigns, agents,
executors, administrators, trustees and legal representatives (collectively,
the “Releasors”) hereby forever
releases, waives and discharges the Released Parties (as defined below) from
each and every claim, demand, cause of action, fee, liability or right of any
sort (based upon legal or equitable theory, whether contractual, common-law,
statutory, federal, state, local or otherwise), known or unknown, which
Releasors ever had, now have, or hereafter may have against the Released
Parties by reason of any actual or alleged act, omission, transaction,
practice, policy, procedure, conduct, occurrence, or other matter from the
beginning of the world up to and including the Effective Date (as defined in Section 18),
including without limitation, those in connection with, or in any way related
to or arising out of, the Executive’s employment or termination of employment
or any other agreement, understanding, relationship, arrangement, act, omission
or occurrence, with the Released Parties.


 


b.             Without limiting the generality of
the previous paragraph, this Release is intended to and shall release the Released Parties from any and all claims, whether known or
unknown, which Releasors ever had, now have, or may hereafter have against the
Released Parties including, but not limited to: 
(1) any claim of discrimination or retaliation under the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act, the
Americans with Disabilities Act, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, as amended (excluding claims for
accrued, vested benefits under any employee benefit or pension plan of the Released
Parties subject to the terms and conditions of such plan and applicable law)
and the Family and Medical Leave Act; (2) any claim under the Constitution
of the State of California, the California Fair Employment and Housing Act, the
California Labor Code, the California Civil Code, the Unruh and George Civil
Rights Acts, the California Family Rights Act, the California Government Code,
the California Pregnancy Disability Leave Law, the California Workers’
Compensation Act or the California Continuation Benefits 


 


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Replacement Act; (3) any
other claim (whether based on federal, state or local law or ordinance,
statutory or decisional) relating to or arising out of the Executive’s
employment, the terms and conditions of such employment, the termination of
such employment and/or any of the events relating directly or indirectly to or
surrounding the termination of such employment, including, but not limited to,
breach of contract (express or implied), tort, wrongful discharge, detrimental
reliance, defamation, emotional distress or compensatory or punitive damages;
and (4) any claim for attorney’s fees, costs, disbursements and the
like.  To the maximum extent permitted by
law, the Executive also promises never directly or indirectly to bring or
participate in an action against any Released Party under California Business &
Professions Code Section 17200 or under any other unfair competition law
of any jurisdiction with respect to the Executive’s employment with MRV or the
termination thereof.


 


c.             MRV and the Executive acknowledge and agree
that the release set forth
in this Section 6 does not in any way affect: (1) the
Executive’s rights of indemnification and directors and officers liability
insurance coverage under Section 11; (2) the Executive’s
accrued, vested rights under any tax-qualified 401(k) plans maintained by MRV and its
Affiliates; and (3) the
right of the Executive to take whatever steps may be necessary to enforce the
terms of this Agreement.


 


d.             The Executive hereby expressly and
knowingly waives application of Section 1542 of the California Civil Code
and all comparable, equivalent or similar provisions of state or federal
law.  The Executive further certifies
that the Executive has read and understands the provisions of Section 1542
of the California Civil Code, which reads as follows:


 


“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”


 


e.             For purposes of this Release, the “Released Parties” means MRV, all
current and former parents, subsidiaries, related companies, partnerships,
joint ventures and employee benefit programs (and the trustees, administrators,
fiduciaries and insurers of such programs), and, with respect to each of them,
their predecessors and successors, and, with respect to each such entity, all
of its past, present, and future employees, officers, directors, members,
stockholders, owners, representatives, assigns, attorneys, agents, insurers,
and any other person acting by, through, under or in concert with any of the
persons or entities listed in this paragraph, and their successors (whether
acting as agents for such entities or in their individual capacities).


 


7.             Supplemental General Release.  The Executive agrees to execute the
Supplemental General Release attached as Exhibit C after the
Termination Date and to deliver the executed Supplemental General Release to
MRV within 21 days after the Termination Date. 
The Executive agrees that all MRV covenants (including MRV’s obligation
to make or provide payments and benefits pursuant to Section 2)
that relate to its obligations beyond the Termination 


 


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Date are contingent on the Executive’s execution of (and not revoking)
the Supplemental General Release.


 


8.             No Existing Suit.  The Executive represents and warrants that,
as of the Effective Date of this Agreement, he has not filed or commenced any
suit, claim, charge, complaint, action, arbitration, or legal proceeding of any
kind against MRV or any Affiliate.  The
Executive acknowledges that this Agreement does not prohibit him from filing a
charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), from enforcing this
Agreement and recovering for any breach of it, or from exercising any rights
under California Labor Code Section 2802. 
The Executive waives, however, any right to any monetary recovery or
other relief should the EEOC or any other agency pursue a claim on the
Executive’s behalf.


 


9.             Certain Forfeitures in Event of Breach or Other
Liability to MRV.  The
Executive acknowledges and agrees that, notwithstanding any other provision of
this Agreement, if the Executive materially breaches any obligation under this
Agreement, or there is a final determination by a court of competent
jurisdiction or an arbitrator, or an agreement by the Executive as part of a settlement,
that the Executive is otherwise liable to MRV or any Affiliate, MRV retains the
right to recoup any and all payments and benefits provided for in Section 2,
any damages suffered by MRV or any Affiliate, plus reasonable attorneys’ fees
incurred in connection with such recovery and, to the extent that such benefits
have not been fully disbursed to the Executive, MRV reserves its rights to stop
all future disbursements of such benefits, except to the extent that such
action is prohibited by law or would result in the invalidation of the release
provided by the Executive under this Agreement. 
The parties agree that any breach of the covenants in Section 5
or Sections 6 and 7 of the Employment Agreement (including the Proprietary
Information and Inventions Agreement) shall be deemed a material breach of an
obligation under this Agreement.


 


10.           MRV Release.


 


a.             For and in consideration of the
promises set forth in this Agreement, MRV and each of its Affiliates hereby
forever releases, waives and discharges the Executive from each and every
claim, demand, cause of action, fees, liabilities or right of any sort (based
upon legal or equitable theory, whether contractual, common-law, statutory,
federal, state, local or otherwise) which MRV and each of its Affiliates has
against the Executive that are known by any director of MRV (other than the
Executive) or the General Counsel (collectively, “Known
Company Claims”), including any Known Company Claims based on or
relating to, or arising out of, the Executive’s employment or termination of
employment; provided, however, notwithstanding the
generality of the foregoing, nothing herein will be deemed to release the
Executive from (a) any knowing violations of law, (b) any knowing acts of misconduct or negligence
engaged in by the Executive while employed as an employee of MRV or while
serving as an officer or director of MRV or any of its Affiliates, including
misappropriation, fraud
or theft, or (c) any other act or omission that would constitute grounds
for terminating the Executive’s employment for “cause” (as defined in Section 2.4
of the Employment Agreement).  In
addition, it is agreed and understood that Known Company Claims shall not
include any matter related to, or arising out of, the pending stock option class
and derivative litigation (respectively styled, Ramsey, et
al. v. MRV Communications, Inc., et al.,
Case No. 08-cv-


 


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4561 GAF; In re MRV Communications, Inc. Derivative Litigation,
Case No. 08-cv-3800 GAF; and Ke v. Margalit, et al.,
Los Angeles Superior Court Case No. BC 393856).


 


b.             MRV hereby expressly and knowingly
waives application of Section 1542 of the California Civil Code and all
comparable, equivalent or similar provisions of state or federal law.  Section 1542 of the California Civil
Code reads as follows:


 


“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”


 


11.           Indemnification; Liability Insurance.  The
Executive shall continue to be entitled to indemnification under the
by-laws of MRV as in effect on the Effective Date.  In addition, MRV shall continue to cover the
Executive under directors and officers liability insurance while potential
liability exists in the same amount and to the same extent as MRV covers its
officers and directors.


 


12.           Entire Agreement; Severability; Waiver; Amendments. 
This Agreement (including the Exhibits hereto) and the agreements
referenced herein contain the entire agreement of the parties relating to the
subject matter hereof, and supersede in their entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof, including the Employment Agreement (other than as specifically provided herein).  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
Agreement.  The provisions of this Agreement shall be deemed
severable and, if any provision is found to be illegal, invalid or
unenforceable for any reason, (i) the provision will be amended automatically
to the minimum extent necessary to cure the illegality or invalidity and permit
enforcement and (ii) 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 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 Agreement will be valid unless
made in writing and signed by the Executive and a duly authorized officer or director of MRV.


 


13.           Governing Law.  This Agreement shall be governed by, and
construed under and in accordance with, the internal laws of the State of
California, without reference to rules relating to conflicts of laws.


 


14.           No Transfer by Executive. 
The Executive represents and warrants that he has not sold, assigned,
transferred, conveyed or otherwise disposed of to any third party, by operation
of law or otherwise, any action, cause of action, suit, debt, obligations,
account, contract, agreement, covenant, guarantee, controversy, judgment,
damage, claim, counterclaim, liability or demand of any nature whatsoever
relating to any matter covered by this Agreement.  


 


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This Agreement is personal
to the Executive and he may not assign, pledge, delegate or otherwise transfer
any of his rights, obligations or duties under this Agreement.


 


15.           Dispute Resolution.  The parties hereto may attempt to resolve any dispute
hereunder informally via mediation or other means.  Otherwise, the parties agree that all disagreements,
disputes and controversies arising under or in connection with this Agreement
will be settled by arbitration conducted before a single arbitrator mutually
agreed to by MRV and the Executive, sitting in Los Angeles, California or such
other location agreed to by the parties, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect
and in accordance with California Code of Civil Procedure Section 1281,
1282 and 1283, et. seq.; provided, however,
that if MRV and the Executive 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 Los Angeles 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 the parties.  Each party waives right to trial by jury and
further review or appeal of the arbitrator’s ruling, except as provided in
California Code of Civil Procedure Section 1286.2.  Judgment may be entered on the award of the
arbitrator in any court having proper jurisdiction.  The costs of arbitration, including the
arbitrator’s fees and expenses, will be borne equally by the parties unless
otherwise determined by the arbitrator. 
Each party shall pay its own attorneys’ fees and expenses in connection
with any such arbitration.


 


16.           Notices.  Any notice, waiver
or other communication given hereunder (a “Notice”) will
be in writing and will be deemed to have been duly given under this Agreement
(except as set forth in Section 18  in respect
of a written notice of revocation) 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 Section 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 the Executive:


 


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


 


If to MRV:


 


MRV Communications, Inc.


20415 Nordhoff Street


Chatsworth, California
91311


Attention: General
Counsel


Facsimile: 818-407-5867


 


with a copy to:


 


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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.


 


17.          Nonadmissibility.  Nothing contained
in this Agreement, or the fact of its submission to the Executive, will be
admissible evidence against either party in any judicial, administrative, or
other legal proceeding (other than an action for breach of this Agreement), or
be construed as an admission of any liability or wrongdoing on the part of
either party or of any violation of federal, state, or local statutory law,
common law or regulation.


 


18.          Knowing and Voluntary Waiver. 
By signing
this Agreement, the Executive expressly acknowledges and agrees that: (a) he
has carefully read it and fully understands what it means; (b) he has
discussed this Agreement with an attorney of his choosing before signing it; (c) he
has been given at least 21 calendar days to consider this Agreement; (d) he
has agreed to this Agreement knowingly and voluntarily and was not subjected to
any undue influence or duress; (e) the consideration provided him under
this Agreement is sufficient to support the releases provided by him under this
Agreement; (f) he may revoke his execution of this Agreement within seven days after
he signs it by sending written notice of revocation as set forth below; and (g) on
the eighth day after he executes this Agreement (the “Effective
Date”),
this Agreement becomes effective and enforceable, provided that the Executive
does not revoke this Agreement during the revocation period.  Any revocation of the Executive’s execution of this Agreement must be submitted, in
writing, to MRV Communications, Inc., 20415 Nordhoff Street, Chatsworth, California 91311, to the
attention of the General Counsel, stating “I hereby revoke my execution of the Separation and Release Agreement.”  The revocation must be personally delivered
to the General Counsel or mailed to the General Counsel and postmarked within
seven days of the Executive’s execution of this Agreement.  If the last day of the revocation period is a
Saturday, Sunday or legal holiday, then the revocation period will be extended
to the following day which is not a Saturday, Sunday or legal holiday.  The Executive agrees that if he does not
execute this Agreement or, in the event of revocation, he will not be entitled
to receive any of the payments or benefits under Section 2.


 


19.          Tax Matters.


 


a.             MRV may withhold from any and all
amounts payable to the Executive under this Agreement or otherwise such
federal, state and local taxes as may be required to be withheld pursuant to
any applicable law or regulations and all other amounts or charges required to
be withheld and deducted.


 


b.             It is the parties’ intention that
the payments and benefits provided under this Agreement be exempt from or
comply with Section 409A (“Section 409A”)
of the Internal Revenue Code of 1986, as amended (the “Code”),
and the regulations and other 


 


11

















 


guidance promulgated
thereunder and, accordingly, this Agreement will be interpreted to be
consistent with such intent.  To the
extent any taxable expense reimbursement or in-kind benefits under this
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 the Executive 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 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 the Executive’s 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 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.


 


20.          Third Party Beneficiaries.  The Executive acknowledges and agrees that (a) each
of MRV’s Affiliates shall be a third party beneficiary of Section 5
and (b) each Released Party shall be a third party beneficiary to the releases set forth in Section 6
and the Supplemental General Release, with full rights to enforce this
Agreement and the matters documented herein.


 


21.          Interpretation.  The parties hereto acknowledge and agree
that:  (a) each party hereto and its
counsel reviewed and negotiated the terms and provisions of the Agreement and
have contributed to their revision; and (b) the rule of construction
to the effect that any ambiguities are resolved against the drafting party will
not be employed in the interpretation of the Agreement.


 


22.          Counterparts.  This
Agreement may be executed (including by facsimile transmission confirmed promptly thereafter by actual
delivery of executed counterparts) with
counterpart signature pages or in counterparts, each of which together
constitute one and the same instrument.


 


12

















 


IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as of the day and year set forth at the
head of this Agreement.


 


	
   

  	
  MRV COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: June 8,
  2010

  	
  /s/ Jennifer Hankes
  Painter

  
	
   

  	
  Name: Jennifer Hankes
  Painter

  
	
   

  	
  Title:   VP, General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: June 8,
  2010

  	
  /s/ Noam Lotan

  
	
   

  	
  Noam Lotan

  



 


13

















 


EXHIBIT
A


 


RESIGNATIONS


 


Effective
as of June 30, 2010, I
hereby resign from my position as Chief Executive Officer of MRV Communications, Inc.
(“MRV”), as a member of the Board of
Directors of MRV and from all other offices, directorships, trusteeships,
committee memberships and fiduciary capacities held with, or on behalf of, MRV
or its subsidiaries or affiliates.


 


I
acknowledge that such resignations are not on account of any disagreement with
MRV relating to its operations, policies or practices.


 


 


	
   

  	
   

  
	
   

  	
  Noam Lotan

  
	
   

  	
  Dated: June 30, 2010

  



 


A-1

















 


EXHIBIT
B


 


STOCK OPTION SUMMARY


 


	
  Grant
  Date

  	
   

  	
  Exercise

  Price

  	
   

  	
  Option

  Shares*

  	
   

  	
  Vested

  	
   

  	
  Accelerated

  	
   

  	
  Stated

  Expiration

  Date

  	
   

  	
  Actual

  Expiration

  Date

  	
   

  
	
  10/29/01

  	
   

  	
  $

  	
  2.70

  	
   

  	
  80,000

  	
   

  	
  80,000

  	
   

  	
  —

  	
   

  	
  9/21/11

  	
   

  	
  9/21/11

  	
   

  
	
  10/29/02

  	
   

  	
  $

  	
  0.99

  	
   

  	
  100,000

  	
   

  	
  —

  	
   

  	
  76,767

  	
  **

  	
  10/29/12

  	
   

  	
  10/29/12

  	
   

  
	
  10/29/02

  	
   

  	
  $

  	
  0.99

  	
   

  	
  12,000

  	
   

  	
  12,000

  	
   

  	
  —

  	
   

  	
  10/29/12

  	
   

  	
  10/29/12

  	
   

  
	
  12/29/03

  	
   

  	
  $

  	
  3.35

  	
   

  	
  20,000

  	
   

  	
  20,000

  	
   

  	
  —

  	
   

  	
  12/29/13

  	
   

  	
  6/30/13

  	
   

  
	
  3/22/04

  	
   

  	
  $

  	
  2.80

  	
   

  	
  25,000

  	
   

  	
  25,000

  	
   

  	
  —

  	
   

  	
  3/22/14

  	
   

  	
  6/30/13

  	
   

  
	
  2/28/05

  	
   

  	
  $

  	
  3.70

  	
   

  	
  60,000

  	
   

  	
  60,000

  	
   

  	
  —

  	
   

  	
  2/28/15

  	
   

  	
  6/30/13

  	
   

  
	
  12/30/05

  	
   

  	
  $

  	
  2.05

  	
   

  	
  35,000

  	
   

  	
  35,000

  	
   

  	
  —

  	
   

  	
  12/30/15

  	
   

  	
  6/30/13

  	
   

  
	
  6/1/06

  	
   

  	
  $

  	
  3.24

  	
   

  	
  70,000

  	
   

  	
  70,000

  	
   

  	
  —

  	
   

  	
  6/1/16

  	
   

  	
  6/30/13

  	
   

  
	
  8/1/07

  	
   

  	
  $

  	
  2.63

  	
   

  	
  160,000

  	
   

  	
  80,000

  	
   

  	
  —

  	
   

  	
  8/1/17

  	
   

  	
  6/30/13

  	
   

  
	
  3/3/08

  	
   

  	
  $

  	
  1.49

  	
   

  	
  170,000

  	
   

  	
  85,000

  	
   

  	
  —

  	
   

  	
  3/3/18

  	
   

  	
  6/30/13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  732,000

  	
   

  	
  467,000

  	
   

  	
  76,767

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*                             Any stock options not vested as of the
Termination Date (after taking into account any acceleration provided for in
this Agreement) automatically shall be forfeited as of the Termination Date.


 


**                      The portion of the stock option that will
be vested as of the Termination Date is determined by multiplying 100,000 by a
fraction, the numerator of which is the number of days between October 29,
2002 and the Termination Date (2,802) and the denominator of which is 3,650.


 


B-1

















 


EXHIBIT
C


 


Supplemental General Release


 


This
Supplemental General Release, dated as of the      day of
July, 2010, is delivered by Noam Lotan (the “Executive”)
to and for the benefit of the Released Parties (as defined below).  The Executive acknowledges that this
Supplemental General Release is being executed in accordance with Section 7
of the Separation and Release Agreement dated June     ,
2010 (the “Separation Agreement”).


 


1.             General Release.  (a)  The
Executive, for himself and for his heirs, dependents, assigns, agents,
executors, administrators, trustees and legal representatives (collectively,
the “Releasors”) hereby forever
releases, waives and discharges the Released Parties (as defined below) from
each and every claim, demand, cause of action, fee, liability or right of any sort (based upon legal
or equitable theory, whether contractual, common-law, statutory, federal,
state, local or otherwise), known or unknown, which Releasors ever had, now
have, or hereafter may have against the Released Parties by reason of any
actual or alleged act, omission, transaction, practice, policy, procedure,
conduct, occurrence, or other matter from the beginning of the world up to and
including the Effective Date (as defined below), including without limitation,
those in connection with, or in any way related to or arising out of, the
Executive’s employment or termination of employment or any other agreement,
understanding, relationship, arrangement, act, omission or occurrence, with the
Released Parties.


 


(b)           Without limiting the generality of the previous
paragraph, this Supplemental General Release is intended to and shall release the Released Parties from any and all claims, whether known
or unknown, which Releasors ever had, now have, or may hereafter have against
the Released Parties including, but not limited to:  (1) any claim of discrimination or
retaliation under the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act, the Americans with Disabilities Act, the Fair Labor Standards
Act, the Employee Retirement Income Security Act of 1974, as amended (excluding
claims for accrued, vested benefits under any employee benefit or pension plan
of the Released Parties subject to the terms and conditions of such plan and
applicable law) and the Family and Medical Leave Act; (2) any claim under
the Constitution of the State of California, the California Fair Employment and
Housing Act, the California Labor Code, the California Civil Code, the Unruh
and George Civil Rights Acts, the California Family Rights Act, the California
Government Code, the California Pregnancy Disability Leave Law, the California
Workers’ Compensation Act or the California Continuation Benefits Replacement
Act; (3) any other claim (whether based on federal, state or local law or
ordinance, statutory or decisional) relating to or arising out of the Executive’s
employment, the terms and conditions of such employment, the termination of
such employment and/or any of the events relating directly or indirectly to or
surrounding the termination of such employment, including, but not limited to,
breach of contract (express or implied), tort, wrongful discharge, detrimental
reliance, defamation, emotional distress or compensatory or punitive damages;
and (4) any claim


 


C-1

















 


for
attorney’s fees, costs, disbursements and the like.  To the maximum extent permitted by law, the
Executive also promises never directly or indirectly to bring or participate in
an action against any Released Party under California Business &
Professions Code Section 17200 or under any other unfair competition law
of any jurisdiction with respect to the Executive’s employment with MRV
Communications, Inc. (“MRV”) or
the termination thereof.


 


(c)           The
foregoing release does not in any way affect: (1) the Executive’s rights of indemnification and
directors and officers liability insurance coverage under Section 11 of
the Separation Agreement; (2) the Executive’s accrued, vested rights under
any tax-qualified 401(k) plans maintained by MRV and its subsidiaries and
affiliates; and (3) the
right of the Executive to take whatever steps may be necessary to enforce the
terms of the Separation Agreement.


 


(d)           The
Executive hereby expressly and knowingly waives application of Section 1542
of the California Civil Code and all comparable, equivalent or similar
provisions of state or federal law.  The
Executive further certifies that the Executive has read and understands the
provisions of Section 1542 of the California Civil Code, which reads as
follows:


 


“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”


 


(e)           For purposes of this Supplemental General Release, the “Released
Parties” means MRV, all current and former parents,
subsidiaries, related companies, partnerships, joint ventures and employee
benefit programs (and the trustees, administrators, fiduciaries and insurers of
such programs), and, with respect to each of them, their predecessors and
successors, and, with respect to each such entity, all of its past, present,
and future employees, officers, directors, members, stockholders, owners,
representatives, assigns, attorneys, agents, insurers, and any other person
acting by, through, under or in concert with any of the persons or entities
listed in this paragraph, and their successors (whether acting as agents for
such entities or in their individual capacities).


 


2.             No Existing Suit. 
The Executive represents and warrants that, as of the Effective Date of
this Supplemental General Release, he has not filed or commenced any suit, claim,
charge, complaint, action, arbitration, or legal proceeding of any kind against
MRV or its subsidiaries or affiliates. 
The Executive acknowledges that this Agreement does not prohibit him
from filing a charge of discrimination with the Equal Employment Opportunity
Commission (“EEOC”), from enforcing this
Agreement and recovering for any breach of it, or from exercising any rights
under California Labor Code Section 2802. 



 


C-2

















 


The
Executive waives, however, any right to any monetary recovery or other relief
should the EEOC or any other agency pursue a claim on the Executive’s behalf.


 


3.             MRV Release.


 


(a)           MRV
and each of its subsidiaries or affiliates (collectively, “Affiliates”)
hereby forever releases, waives and discharges the Executive from each and
every claim, demand, cause of action, fees, liabilities or right of any sort
(based upon legal or equitable theory, whether contractual, common-law,
statutory, federal, state, local or otherwise) which MRV and each of its
Affiliates has against the Executive that are known by any director of MRV
(other than the Executive) or the General Counsel (collectively, “Known Company Claims”), including
any Known Company Claims based on or relating to, or arising out of, the
Executive’s employment or termination of employment; provided,
however, notwithstanding the generality of the foregoing, nothing
herein will be deemed to release the Executive from (1) any knowing violations of law, (2) any knowing acts of misconduct or negligence
engaged in by the Executive while employed as an employee of MRV or while
serving as an officer or director of MRV or any of its Affiliates, including
misappropriation, fraud
or theft, or (3) any other act or omission that would constitute grounds
for terminating the Executive’s employment for “cause” (as defined in Section 2.4
of the Key Employee Agreement dated as of March 23, 1992, as amended on August 10,
1992 and November 16, 1994).  In
addition, it is agreed and understood that Known Company Claims shall not
include any matter related to, or arising out of, the pending stock option
class and derivative litigation (respectively styled, Ramsey, et
al. v. MRV Communications, Inc., et al.,
Case No. 08-cv-4561 GAF; In re MRV Communications, Inc.
Derivative Litigation, Case No. 08-cv-3800 GAF; and Ke v. Margalit, et al., Los Angeles Superior Court Case No. BC
393856).


 


(b)           MRV
hereby expressly and knowingly waives application of Section 1542 of the
California Civil Code and all comparable, equivalent or similar provisions of
state or federal law.  Section 1542
of the California Civil Code reads as follows:


 


“A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”


 


4.             Knowing and
Voluntary Waiver.  By signing this Supplemental General Release, the Executive expressly acknowledges
and agrees that: (a) he has carefully read it and fully understands what
it means; (b) he has discussed this Supplemental General Release with an attorney of his choosing before
signing it; (c) he has been given at least 21 calendar days to consider
this Supplemental General Release; (d) he has agreed to this Supplemental
General Release
knowingly and voluntarily and was not subjected to any undue influence or
duress; (e) the consideration provided him under Separation
Agreement is
sufficient to support the releases provided by him under this Supplemental 


 


C-3

















 


General Release; (f) he may revoke his execution of this Supplemental General Release within seven days after he signs it by
sending written notice of revocation as set forth below; and (g) on the
eighth day after he executes this Supplemental General Release
(the “Effective Date”), this Supplemental General Release becomes effective and enforceable,
provided that the Executive does not revoke this Agreement during the
revocation period.  Any revocation of the
Executive’s execution of this Supplemental General Release must be submitted, in writing, to MRV
Communications, Inc., 20415 Nordhoff Street, Chatsworth, California 91311, to the attention of the General
Counsel, stating “I hereby revoke my execution of the Supplemental General Release.” 
The revocation must be personally delivered to the General Counsel or
mailed to the General Counsel and postmarked within seven days of the Executive’s
execution of this Supplemental General Release. 
If the last day of the revocation period is a Saturday, Sunday or legal
holiday, then the revocation period will be extended to the following day which
is not a Saturday, Sunday or legal holiday. 
The Executive agrees that if he does not execute this Supplemental
General Release or,
in the event of revocation, he will not be entitled to receive any of the
payments or benefits under Section 2 of the Separation Agreement.  The Executive must execute this Supplemental General
Release on or before July 21, 2010.


 


This
Release is final and binding and may not be changed or modified.


 


	
  Date:
  July     , 2010

  	
   

  
	
   

  	
  Noam Lotan

  



 


Acknowledged and Agreed:


 


	
  MRV COMMUNICATIONS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
  Date:
  July     , 2010

  	
   

  



 


C-4