Document:

Exhibit 10.1

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of November 10, 2014, by and among Demand Media, Inc. (the “Company”) and Mel Tang (the “Consultant”). 

RECITALS

	
A.
	
The Consultant currently serves as Chief Financial Officer of the Company pursuant to that certain Amended and Restated Employment Agreement with the Company, dated October 1, 2012, as amended by that certain resignation notice dated November 7, 2014 (the “Employment Agreement”).

	
B.
	
The Company and the Consultant mutually desire to transition the Consultant’s role with the Company from that of Chief Financial Officer of the Company to that of a non-employee consultant to the Company, effective as of the close of business on December 31, 2014 (the “Transition Date”).

	
C.
	
The Consultant and the Company mutually desire that, effective as of the close of business on the Transition Date, the Employment Agreement will terminate, this Agreement will supersede and replace the Employment Agreement in its entirety and the Consultant will cease to be an employee of the Company and will thereupon become an independent contractor of the Company performing consulting services. The Consultant desires to perform such services on the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Consultant hereby agree as follows:

1.Resignation.  The Consultant hereby (a) resigns from his position as Chief Financial Officer of the Company and from all other offices held with the Company and/or its affiliates (if any), and (b) terminates his employment with all such entities, in each case, effective as of the close of business on the Transition Date.  The Company and the Consultant acknowledge and agree that the termination of the Consultant’s employment as of the close of business on the Transition Date shall constitute a termination of employment by the Consultant “without Good Reason” pursuant to Section 4(b) of the Employment Agreement.  As of the close of business on the Transition Date, the Employment Agreement shall terminate and shall be of no further force and effect, and neither the Company nor the Consultant shall have any further obligations pursuant thereto.

 

 

2.Services and Compensation

(a)Services and Base Compensation. 

(i)During the Term (as defined below), the Consultant shall provide such transition services (the “Services”) in the Consultant’s areas of expertise and work experience as may be mutually agreed by the Consultant and the Board of Directors of the Company (the “Board”) and/or the Chief Executive Officer of the Company.  The Consultant may enter into other consulting or employment relationships that do not conflict with the Consultant’s obligations hereunder.  

(ii)Compensation for Services.  In consideration for the performance of the Services, during the Term the Company shall pay or provide to the Consultant a fee of $10,000 per month (the “Base Compensation”), payable monthly in arrears.  In addition, during the Term, to the extent the Company continues to maintain its Executive Medical Reimbursement Plan, the Consultant shall be eligible to participate in such plan (or any successor plan), as in effect from time to time.

(b)Employment Termination Payments and Benefits. In addition to the Base Compensation, subject to and conditioned upon the Consultant’s execution and delivery to the Company of an effective release of claims in substantially the form attached hereto as Exhibit A (the “Release”) within twenty-one (21) days following the Transition Date and non-revocation of such Release during any applicable revocation period:

(i)The Consultant shall remain eligible to the receive an Annual Bonus (as defined in the Employment Agreement) in respect of 2014 services in accordance with the Employment Agreement and consistent with the 2014 annual bonuses received by the Company’s senior executives.  The Annual Bonus, if any, will be paid on the earlier of (1) the date on which 2014 annual bonuses are paid generally to the Company’s senior executives, but no later than March 15, 2015 or (2) within three (3) business days of the date on which this Agreement is terminated by the Company pursuant to Section 3(a)(ii). 

(ii)During the period commencing on the Transition Date and ending on the last day of the Term or, if earlier, the date on which the Consultant becomes eligible for coverage under the group health plan of a subsequent employer (of which eligibility the Consultant hereby agrees to give prompt notice to the Company) (in any case, the “COBRA Period”), subject to the Consultant’s valid and timely election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended, and the regulations thereunder, the Company shall continue to provide the Consultant and the Consultant’s eligible dependants with coverage under its group health plans, including its Executive Medical Reimbursement Plan (to the extent such plan is maintained by the Company), at the same levels and the same cost to the Consultant as would have applied if the Consultant’s employment had not been terminated on the Transition Date, based on the Consultant’s elections in effect on the date hereof), provided, however, that (A) if any plan pursuant to which such benefits are provided ceases prior to the expiration of the period of continuation coverage to be exempt from the application of Section 409A (as defined below) under Treasury Regulation Section 1.409A-1(a)(5), or (B) the Company is otherwise unable to continue to cover the Consultant under its 

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group health plans (including because taxes or penalties would be imposed on the Company in connection with such continuation coverage), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to the Consultant as currently taxable compensation in substantially equal monthly installments over the remaining portion of the continuation coverage period.

(iii)During the Term, each of the Consultant’s outstanding Company and Rightside Group, Ltd. (“Rightside”) restricted stock unit awards shall continue to vest in accordance with their original vesting schedules, subject to the Consultant continuing to provide the Services to the Company. Upon the termination of the Term and the Consultant’s services hereunder, each of the Consultant’s Company and Rightside restricted stock unit awards and each of the Consultant’s Company and Rightside stock options, to the extent then-unvested, in each case, as of the date termination of the Term, shall terminate as of such termination date.  The agreements evidencing the Consultant’s Company and Rightside restricted stock units and stock options shall be deemed amended to the extent necessary to give effect to this Section 2(b)(iii). 

(c)Expenses. During the Term, the Company shall continue to reimburse the Consultant for reasonable and documented out-of-pocket expenses incurred by Consultant directly in connection with providing the Services contemplated hereunder, in accordance with the Company’s substantiation and reimbursement policies applicable to non-employees, as in effect from time to time.

3.Term and Obligations Upon Termination

(a)Term.  The Consultant’s Services hereunder shall be for a term  commencing on the close of business on the Transition Date and ending on March 31, 2015 (collectively, the “Term”).  Notwithstanding the foregoing, (i) the Consultant may terminate the Term and the Consultant’s Services hereunder at any time, for any reason or no reason, and (ii) the Company may terminate the Term and the Consultant’s Services hereunder either (A) prior to February 16, 2015, only for Cause (as defined in the Employment Agreement) or (B) on or following February 16, 2015, for any reason or no reason, upon notice provided by the terminating party to the other party in accordance with Section 10 below. 

(b)Obligations Upon Termination.  Upon a termination of the Term and the Consultant’s Services hereunder:

(i)The Company shall pay within thirty (30) days after the date of termination (or such earlier date as may be required by applicable law), all amounts owing to the Consultant for Services completed and/or reimbursable expenses (under Section 2(c) above) incurred through the termination date; and

(ii)Notwithstanding anything contained herein to the contrary, Section 4 (Confidentiality Agreement), Section 5 (Cooperation), Section 6 (Non-Disparagement) and Section 8 (Independent Contractor) hereof, as well as the Confidentiality Agreement, as defined in Section 4, shall survive termination of this Agreement and shall continue in effect. 

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(c)Return of Property. Upon the termination of the Term and the Consultant’s Services hereunder for any reason, the Consultant agrees to return to the Company all documents of the Company and its affiliates (and all copies thereof) and all other Company or Company affiliate property that the Consultant has in his possession, custody or control. Such property includes, without limitation: (i) any materials of any kind that the Consultant knows contain or embody any proprietary or confidential information of the Company or an affiliate of the Company (and all reproductions thereof), (ii) computers (including, but not limited to, laptop computers, desktop computers and similar devices) and other portable electronic devices (including, but not limited to, tablet computers), cellular phones/smartphones, credit cards, phone cards, entry cards, identification badges and keys, and (iii) any correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the customers, business plans, marketing strategies, products and/or processes of the Company or any of its affiliates and any information received from the Company or any of its affiliates regarding third parties.

(d)Exclusivity of Benefits.   Except as expressly provided in this Agreement, the Company shall have no further obligations to the Consultant upon termination of the Term and the Consultant’s Services hereunder.

4.Confidentiality Agreement. The parties acknowledge and agree that they have entered into a Confidential Information and Development Agreement, dated July 16, 2006 (the “Confidentiality Agreement”) and the Consultant hereby acknowledges and agrees that such agreement shall remain in full force and effect in accordance with its terms and that the Consultant shall be bound by its terms and conditions.  

5.Cooperation.  In addition to the Services (and without further compensation), the Consultant agrees that, following the Transition Date, the Consultant will use commercially reasonable efforts to cooperate with the Company, to the extent reasonably requested by the Company, to consult, advise and provide relevant input with respect to: (a) any internal investigation or administrative, regulatory or judicial proceeding involving matters that were within the scope of the Consultant’s duties and responsibilities to the Company and its affiliates during employment with the Company, and (b) the transition of the Consultant’s prior job duties and responsibilities.

6.Non-Disparagement. The Consultant agrees not to disparage the Company, any affiliate of the Company and/or any officers, directors, employees, shareholders and/or agents of the Company or any affiliate of the Company in any manner intended or reasonably likely to be harmful to them or their business, business reputation or personal reputation. The Company shall ensure that its directors and executive officers do not disparage the Consultant in any manner intended or reasonably likely to be harmful to the Consultant’s business or personal reputation.

7.Representations.  The Consultant represents and warrants that the Consultant has no outstanding agreement, relationship or obligation that is in conflict with any of the provisions of this Agreement, or that would preclude the Consultant from performing hereunder or complying with the provisions hereof, and further agrees that the Consultant will not enter into any such conflicting agreement or relationship during the Term. The Consultant agrees to comply with any insider trading policy, ethics policy and business conduct policy of the 

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Company during the term of this Agreement, but may adopt a Section 10b5-1 trading plan consistent with such obligations.  The Consultant agrees to not use information received by the Consultant during the term of this Agreement for personal gain or take advantage of any business opportunities that arise as a result of this Agreement that might be of interest to the Company.

8.Independent Contractor.  The Consultant expressly acknowledges and agrees that, as of the Transition Date, he is solely an independent contractor and shall not be construed to be an employee of the Company in any matter under any circumstances or for any purposes whatsoever.  The Company shall not be obligated to (a) pay on the account of the Consultant, any unemployment tax or other taxes required under the law to be paid with respect to employees, (b) withhold any monies from the fees of the Consultant for income or employment tax purposes or (c) provide the Consultant with any benefits, including without limitation health, welfare, pension, retirement, or any kind of insurance benefits, including workers’ compensation insurance (except as expressly provided above with respect to COBRA continuation benefits).  Notwithstanding the foregoing, any amounts payable to the Consultant in respect of his service as an employee of the Company prior to the Transition Date shall be subject to withholding in accordance with applicable law.  The Consultant acknowledges and agrees that the Consultant is obligated to report as income all compensation received by the Consultant pursuant to this Agreement, and to pay any applicable income, self-employment and other taxes thereon.  The Consultant and the Company hereby acknowledge and agree that this Agreement does not impose any obligation on the Company to offer employment to the Consultant at any time.

9.Assignment.  This Agreement and the rights and duties hereunder are personal to the Consultant and shall not be assigned, delegated, transferred, pledged or sold by the Consultant without the prior written consent of the Company.  The Consultant hereby acknowledges and agrees that the Company may assign, delegate, transfer, pledge or sell this Agreement and the rights and duties hereunder (a) to an affiliate of the Company, or (b) to any third party (i) that acquires all or substantially all of the assets of the Company or (ii) that is the surviving or acquiring corporation in connection with a merger, consolidation or other acquisition involving the Company.  This Agreement shall inure to the benefit of and be enforceable by the parties hereto, and their respective heirs, personal representatives, successors and assigns.

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10.Notices.  All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Consultant:  at the Consultant’s most recent address on the records of the Company.

If to the Company:

Demand Media, Inc.

1655 26th Street
Santa Monica, CA 90404

Attn: General Counsel

 

with a copy to:

Latham & Watkins LLP
355 South Grand Ave. 
Los Angeles, CA  90071-1560
Attn: Alex Voxman

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

11.Section 409A.   To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Internal Revenue Code and Department of Treasury regulations and other interpretive guidance issued thereunder (“Section 409A”).  Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company shall work in good faith with the Consultant to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, including without limitation, actions intended to (a) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (b) comply with the requirements of Section 409A; provided, however, that this Section 11 shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so.  Any right to a series of installment payments pursuant to this Agreement is to be treated as a right to a series of separate payments.  

12.Governing Law.  Any dispute, controversy, or claim of whatever nature arising out of or relating to this Agreement or breach thereof shall be governed by and interpreted under the laws of the State of California, without regard to conflict of law principles.

13.Entire Agreement; Counterparts. Effective as of the close of business on the Transition Date, this Agreement, together with the Confidentiality Agreement, the Release and any applicable stock option and restricted stock unit agreements, constitutes the complete and 

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final agreement of the parties and supersede any prior agreements between them, whether written or oral, with respect to the subject matter hereof.  Without limiting the generality of the foregoing, the Consultant hereby agrees that as of the close of business on the Transition Date, the Employment Agreement is hereby terminated and shall be of no further force or effect.  No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

14.Severability.  The invalidity or unenforceability of any provision of this Agreement, or any terms thereof, shall not affect the validity of this Agreement as a whole, which shall at all times remain in full force and effect. 

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

 

 

			
	
DEMAND MEDIA, INC.

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
        /s/ Sean Moriarty

	
 
	
 
	
Sean Moriarty

	
 
	
 
	
Chief Executive Officer

 

 

 

			
	
CONSULTANT

	
 
	
 
	
 

	
/s/ Mel Tang

	
 
	
 
	
Mel Tang

 

 

 

[Signaure page to Mel Tang Consulting Agreement]

 

GENERAL RELEASE

For valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Demand Media, Inc., a Delaware corporation (the “Company”) and each of its partners, subsidiaries, associates, affiliates, successors, heirs, assigns, agents, directors, officers, employees, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof.  The Claims released herein include, without limiting the generality of the foregoing, any Claims in any way arising out of, based upon, or related to the employment or termination of employment of the undersigned by the Releasees, or any of them; any alleged breach of any express or implied contract of employment; any alleged torts or other alleged legal restrictions on Releasees’ right to terminate the employment of the undersigned; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination In Employment Act, the Americans With Disabilities Act, and the California Fair Employment and Housing Act.  Notwithstanding the foregoing, this general release (the “Release”) shall not operate to release any rights or claims of the undersigned (i) to payments or benefits under that certain Consulting Agreement, dated as of November 10, 2014, between the Company and the undersigned (the “Consulting Agreement”), (ii) to payments or benefits under any equity award agreement between the undersigned and the Company, (iii) with respect to Section 2(c) of the Consulting Agreement, (iv) to accrued or vested benefits the undersigned may have, if any, as of the date hereof under any applicable plan, policy, practice, program, contract or agreement with the Company, (v) to any Claims, including claims for indemnification and/or advancement of expenses, arising under any indemnification agreement between the undersigned and the Company or under the bylaws, certificate of incorporation of other similar governing document of the Company, or (vi) to any Claims which cannot be waived by an employee under applicable law.

THE UNDERSIGNED ACKNOWLEDGES THAT THE EXECUTIVE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES 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 OR HER SETTLEMENT WITH THE DEBTOR.”

THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS THE EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

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IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:

(A)THE EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;

(B)THE EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND

(C)THE EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE THIS RELEASE, AND THIS RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.

The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which the Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer.  It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.

The undersigned agrees that if the Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.

The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.

IN WITNESS WHEREOF, the undersigned has executed this Release this ____ day of ___________, ____.

 

	
 
	
 
	
 

	
 
	
 
	
Mel Tang

 

A-2Exhibit 10.1

 

NeoPhotonics Corporation 

Amended and Restated Severance Rights Agreement 

This Amended and Restated Severance Rights Agreement (the “Agreement”) is made and entered into by and between Ben Sitler (the “Employee”) and NeoPhotonics Corporation, a Delaware corporation (the “Company”), effective as of October 8, 2014. 

RECITALS 

A.    The Board of Directors of the Company (the “Board”) believes that it is in the best interests of the Company and its shareholders to provide the Employee with certain severance benefits should Employee’s employment with the Company terminate under certain circumstances. Such benefits are intended to provide Employee with enhanced financial security and with sufficient incentive and encouragement for Employee to continue employment with the Company and remain with the Company. 

B.    The Company and the Employee previously entered into a Severance Agreement dated as of April 14, 2010, which shall be amended in its entirety and replaced by this Agreement. 

C.    Certain capitalized terms used in the Agreement are defined in Section 5 below. 

AGREEMENT 

The parties hereto agree as follows: 

	
1.
	
Term of Agreement. The terms of this Agreement shall terminate upon the date that all obligations of the parties hereunder have been satisfied, if Employee is eligible to receive benefits hereunder, or immediately upon a termination of Employee’s employment as to which he has no eligibility for benefits hereunder. A termination of the terms of this Agreement pursuant to this Section shall be effective for all purposes. 

	
2.
	
At-Will Employment. The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, and as may otherwise be available in accordance with the Company’s established employee plans and policies at the time of termination. 

	
3.
	
Agreement Benefits. 

	
(a)
	
Involuntary Termination Generally. If the Employee’s employment terminates as a result of Involuntary Termination, except by such Involuntary Termination as provided in Section 3(b) below, and provided the Employee provides a valid and effective Release of Claims not later than sixty (60) days after such termination, the Company will pay the Employee the following severance benefits: 

	
(i)
	
a lump sum severance payment equal to twelve (12) months of the Employee’s Base Compensation, with such amount payable within ten (10) business days after the effective date of the Release of Claims; 

	
(ii)
	
provided the Employee makes a timely and accurate election for continued health insurance coverage (including medical, dental, vision and prescription) under COBRA (or Cal-COBRA or any other applicable state law of similar effect), the Company will pay the premiums for such continued coverage for the Employee and his eligible dependents until the earliest of (i) the close of the twelve (12) month period following Executive’s termination of employment, (ii) the date the Employee commences new employment following his termination date, or (iii) such earlier date as the Employee (or his dependents, as applicable) cease to be eligible for such continuation coverage (such period, the “COBRA Period”); provided further that if at any time during the COBRA Period the Company determines in its sole discretion that it cannot provide the foregoing COBRA benefits without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company will instead pay to the Employee a taxable monthly cash payment for the remainder of the COBRA Period in an amount equal to the monthly COBRA premium that the Employee would be required to pay to continue the Employee’s group health coverage in effect on the date of his termination (based on the premium for the first month of COBRA coverage) (each payment, a “Special Severance Payment”), which payments will be made regardless of whether the Employee elects COBRA continuation coverage and will be subject to applicable tax withholdings; provided 

 

NeoPhotonics Corporation Confidential Information 新飞通公司 机密信息 

 

		
that no Special Severance Payment will be made prior to the sixtieth (60th) day following the termination date, and on such date the Company will pay in a lump sum the aggregate amount of payments that the Company would have paid prior to that date had payments not been delayed during the consideration period for the Release of Claims, with the balance of the payments made thereafter on the original schedule; and 

	
(iii)
	
the vesting of each of Employee’s then-outstanding compensatory equity awards granted under any of the Company’s equity incentive plans, and the rate of lapsing of any repurchase right applicable to any shares received under such awards, shall automatically be accelerated (and, in the case of options, such options shall become exercisable), as of the effective date of Employee’s Involuntary Termination, as to the number of shares that would have vested, or as to which repurchase rights would have lapsed, in the ordinary course of business if Employee had maintained his employment or consulting relationship with the Company for the first eighteen (18) months following the effective date of the Involuntary Termination. 

	
(b)
	
Involuntary Termination Following a Change in Control. If the Employee’s employment terminates as a result of Involuntary Termination on or within twelve (12) months following a Change in Control, and provided the Employee provides a valid and effective Release of Claims not later than sixty (60) days after such termination, the Company will pay the Employee the following severance benefits: 

	
(i)
	
a lump sum severance payment equal to the sum of (A) twelve (12) months of the Employee’s Base Compensation and (B) 100% of the Employee’s target Bonus for the year of termination, with such amount payable within ten (10) business days after the effective date of the Release of Claims; 

	
(ii)
	
provided the Employee makes a timely and accurate election for continued health insurance coverage (including medical, dental, vision and prescription) under COBRA (or Cal-COBRA or any other applicable state law of similar effect), the Company will pay the premiums for such continued coverage for the Employee and his eligible dependents until the earliest of (i) the close of the twelve (12) month period following Executive’s termination of employment, (ii) the date the Employee commences new employment following his termination date, or (iii) such earlier date as the Employee (or his dependents, as applicable) cease to be eligible for such continuation coverage (such period, the “CIC COBRA Period”); provided further that if at any time during the CIC COBRA Period the Company determines in its sole discretion that it cannot provide the foregoing COBRA benefits without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company will instead pay to the Employee a taxable monthly cash payment for the remainder of the CIC COBRA Period in an amount equal to the monthly COBRA premium that the Employee would be required to pay to continue the Employee’s group health coverage in effect on the date of his termination (based on the premium for the first month of COBRA coverage) (each payment, a “Special Severance Payment”), which payments will be made regardless of whether the Employee elects COBRA continuation coverage and will be subject to applicable tax withholdings; provided that no Special Severance Payment will be made prior to the sixtieth (60th) day following the termination date, and on such date the Company will pay in a lump sum the aggregate amount of payments that the Company would have paid prior to that date had payments not been delayed during the consideration period for the Release of Claims, with the balance of the payments made thereafter on the original schedule; and 

	
(iii)
	
the vesting of each of Employee’s then-outstanding compensatory equity awards granted under any of the Company’s equity incentive plans, and the rate of lapsing of any repurchase right applicable to any shares received under such awards, shall automatically be accelerated (and, in the case of options, such options shall become exercisable), as of the effective date of Employee’s Involuntary Termination, as to the number of shares that would have vested, or as to which repurchase rights would have lapsed, in the ordinary course of business if Employee had maintained his employment or consulting relationship with the Company for eighteen (18) months following the effective date of the Involuntary Termination). 

(c) Voluntary Resignation; Termination For Cause. If the Employee voluntarily resigns from the Company, or if the Company terminates the Employee’s employment for Cause, then the Employee shall not be entitled to receive severance or other benefits pursuant to this Agreement. 

(d) Disability; Death. If the Company terminates the Employee’s employment as a result of the Employee’s Disability, or if the Employee’s employment terminates due to the death of the Employee, then the Employee shall not be entitled to receive severance benefits except as provided in this Section 3(d). Nothing in this Agreement restricts the Employee’s rights to any payments under any death or disability insurance policy with the Company in effect at the time of termination. In addition, if the Employee’s employment terminates due to the death of the Employee, and his death occurs while he is outside of his country of residence (for any reason), then the Company will supplement the death benefit provided by any existing Company-provided life insurance, if necessary, so that the Employee’s estate or beneficiaries receive total death benefits equal to two times the Employee’s then-current Base Compensation. 

 

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NeoPhotonics Corporation Confidential Information 新飞通公司 机密信息 

 

Any amount payable pursuant to this Section 3(d) will be paid in a lump sum to the Employee’s estate within thirty (30) days following the Employee’s termination date. 

(e) Change in Control Benefits. In the event of a Change in Control in which the acquirer does not assume unvested compensatory equity awards, the vesting of each of Employee’s then-outstanding compensatory equity awards granted under any of the Company’s equity incentive plans, and the rate of lapsing of any repurchase right applicable to any shares received under such awards, shall automatically become accelerated (and, in the case of options, such options shall become exercisable) as to the number of shares that would have vested, or as to which repurchase rights would have lapsed, in the ordinary course of business if Employee had maintained his employment or consulting relationship with the Company for eighteen (18) months following the closing of the Change in Control, in each case as of immediately prior to the closing of the Change in Control. For purposes of clarity, this eighteen (18) month vesting acceleration is intended to be in lieu of any automatic accelerated vesting provision triggered solely on the closing of a Change in Control transaction contained in the Company’s equity incentive plans. 

4.        Excise Tax Payments. The Company and the Employee agree that Employee’s rights to benefits hereunder are subject to reduction in accordance with the provisions of Section 9(e) (that is, “Parachute Payments”) of the Company’s 2010 Equity Incentive Plan. 

5.         Definition of Terms. The following terms referred to in this Agreement shall have the following meanings: 

(a) Base Compensation. “Base Compensation” means an amount equal to Employee’s existing annual base salary at the time of the Involuntary Termination. 

(b) Bonus. “Bonus” shall mean the target compensation amount for the fiscal year of termination under any cash incentive program approved for the year of termination as applicable to the Employee. 

(c) Cause. “Cause” shall mean (i) any act of personal dishonesty taken by the Employee in connection with his responsibilities as an employee and intended to result in substantial personal enrichment of the Employee, (ii) the conviction of a felony, (iii) a willful act by the Employee which constitutes gross misconduct and which is materially injurious to the Company, and (iv) following delivery to the Employee of a written demand for performance from the Company which describes the basis for the Company’s belief that the Employee has not substantially performed his duties, continued violations by the Employee of the Employee’s obligations to the Company which are demonstrably willful and deliberate on the Employee’s part. 

(d) Change in Control. “Change in Control” means the occurrence of any of the following events: 

	
(i)
	
any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or 

	
(ii)
	
the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or 

	
(iii)
	
the consummation of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least sixty percent (60%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or 

	
(iv)
	
a change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described in subsections (i), (ii) or (iii) or in connection with an actual or threatened proxy contest relating to the election of directors of the Company. 

(e) Disability. “Disability” shall mean that the Employee has been unable to perform his Company duties as the result of his incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee’s legal representative (such agreement as to acceptability not to be unreasonably withheld). Termination resulting from Disability may only be effected after at least thirty (30) days’ written notice by the Company of its intention to terminate the Employee’s employment. In the event that the Employee resumes the performance of substantially all of his duties hereunder before the 

 

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termination of his employment becomes effective, the notice of intent to terminate shall automatically be deemed to have been revoked. 

(f) Good Reason. “Good Reason” shall mean the Employee’s voluntary resignation from all positions he then holds with the Company, effective within ninety (90) days after the occurrence of the failure of the Company to obtain the assumption, in all material respects, of this Agreement by any successors to the Company; provided, however, that the Employee must provide written notice to the Company of the existence of one of the conditions described above within sixty (60) days after its initial existence, and the Company must be provided with a period of thirty (30) days during which it may cure the circumstances giving rise to the condition (in which case, no right to resign for Good Reason shall exist). An isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company promptly after receipt of notice thereof given by Employee shall not give rise to Good Reason. 

(g) Involuntary Termination. “Involuntary Termination” shall mean (i) any termination of the Employee’s employment by the Company without Cause (and other than by reason of death or Disability) or (ii) Employee’s resignation for Good Reason, provided that in either case, such termination constitutes a “separation from service” as defined under Treasury Regulation Section 1.409A-1(h). 

(h) Release of Claims. “Release of Claims” shall mean a waiver by Employee, in a form provided by the Company within ten (10) days after the applicable event, and reasonably acceptable to Employee, of all employment related obligations of and claims and causes of action against the Company. The Release of Claims must become effective in accordance with its terms within sixty (60) days following the event giving rise to the payment obligation hereunder. If the Release of Claims fails to become effective within the required period, Employee will not receive any of the benefits provided for under this Agreement. 

6. Successors. 

(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) or to all or substantially all of the Company’s business and/or assets shall promptly (within fifteen (15) days after such transaction) assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 6(a) or which becomes bound by the terms of this Agreement by operation of law. 

(b) Employee’s Successors. The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee shall die at a time when he is receiving payments or benefits hereunder, such payments and benefits shall continue to be paid or provided to such person or persons appointed in writing by Employee to receive such amounts or, if no person is so appointed, to the Employee’s estate. 

7.        Notice. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to him at the home address which he most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary. 

8.        Arbitration. To ensure the timely and economical resolution of disputes that may arise in connection with Employee’s employment with the Company, Employee and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of this Agreement, Employee’s employment, or the termination of Employee’s employment, including but not limited to statutory claims, shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in San Jose, California, conducted by JAMS under the then applicable JAMS rules. By agreeing to this arbitration procedure, both Employee and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies that Employee or the Company would be entitled to seek in a court of law. The Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required if the dispute were decided in a court of law. Nothing in this Agreement is intended to prevent either Employee or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. 

 

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9. Miscellaneous Provisions. 

(a) Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

(b) Whole Agreement. This Agreement sets forth the entire agreement of the parties with respect to the matters set forth herein, and supersedes all previous contracts, arrangements or understandings between the Company and Employee on the subjects set forth herein. The Agreement may be amended at any time only by mutual written agreement signed by the parties hereto. 

(c) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California. 

(d) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect. 

(e) Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes. 

(f) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 

(g) Code Section 409A. All payments upon a termination of service to be made under this Agreement may be made only upon a “separation of service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Department of Treasury regulations and other guidance promulgated thereunder. Notwithstanding any provision to the contrary in this Agreement, if Employee is deemed by the Company at the time of Employee’s separation from service to be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), to the extent delayed commencement of any portion of the benefits to which Employee is entitled under this Agreement that are deemed to be “deferred compensation” is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i), such portion of Employee’s benefits shall not be provided to Employee prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Employee’s “separation from service” with the Company or (ii) the date of Employee’s death. Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 9(g) shall be paid in a lump sum to Employee, and any remaining payments due under this Agreement shall be paid as otherwise provided herein. For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payments under this Agreement shall be treated as a separate payment under a right to receive a series of separate payments and, accordingly, each payment hereunder shall at all times be considered a separate and distinct payment. It is intended that all of the severance payments satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A provided under of Treasury Regulation 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions. The Company and Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A. 

 

 

 

 

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IN WITNESS WHEREOF, each of the parties has executed this Amended and Restated Severance Agreement, in the case of the Company by its duly authorized officer, as of the day and year last set forth below. 

 

	
COMPANY
	
 
	
 
	
  
	
NEOPHOTONICS CORPORATION

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
  
	
By:
	
  
	
/s/ Timothy S. Jenks

	
 
	
 
	
 
	
  
	
Title:
	
  
	
Timothy S. Jenks

	
 
	
 
	
 
	
  
	
Date:
	
  
	
October 8, 2014

	
 

EMPLOYEE
	
 
	
 
	
  
	
By:
	
  
	
/s/ Ben Sitler

	
 
	
 
	
 
	
  
	
Name:
	
  
	
Ben Sitler

	
 
	
 
	
 
	
  
	
Date:
	
  
	
October 8, 2014

 

 

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NeoPhotonics Corporation Confidential Information 新飞通公司 机密信息

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