Document:

exv10w15

 

Exhibit 10.15

[LuminentOIC LOGO]

Employment Agreement

     This employment agreement is effective as of December 26, 2006 between LuminentOIC Inc.
(“LUMINENTOIC INC.”) and Brett Chloupek (“Employee”).

A. Recitals

1. LUMINENTOIC INC. desires to employ the Employee, and the Employee desires to accept such
employment, on the terms and conditions set forth in this agreement.

2. The representations, warranties covenants and agreements of the Employee are in consideration
of the compensation paid to Employee and shall survive the termination of this agreement.

3. LUMINENTOIC INC. is materially relying upon each of Employee’s covenants, agreements,
representations and warranties in employing Employee with the company.

THEREFORE, in consideration of the above recitals and of the mutual promises and conditions in this
agreement, it is agreed as follows:

B. At-Will Nature of Employment

1. It is understood and agreed between LUMINENTOIC INC. and Employee that the employment
relationship is “at-will”: in other words, employment may be terminated at any time, with or
without cause, and with or without notice. Employee understands and acknowledges that his or
her employment with LUMINENTOIC INC. is for no specific term. LUMINENTOIC INC. has and will
continue to have the absolute and unconditional right to terminate the employment relationship
for any reason, with or without cause or prior notice. Nothing in this Agreement shall
obligate LUMINENTOIC INC. to continue to retain Employee as an employee.

C. Duties

1. Employee shall, under the direction of the Chief Executive Officer and
President of the Company, and such other executive or management, perform the duties of LUMINENTOIC INC.’s Chief
Financial Officer and such other duties as the Chief Executive Officer, President, or such other executive or
management may from time to time assign either orally or in writing, and subject to the direction
and policies of LUMINENTOIC INC. and its board of directors as they may be,
from time to time, stated either orally or in writing.

2. While employed with LUMINENTOIC INC., Employee agrees that he or she will not undertake
planning for or organization of any business activity competitive with LUMINENTOIC INC.’s
business or combine or join with other employees or representatives of LUMINENTOIC INC.’s
business for the purpose of organizing any such competitive business activity.

3. Employee shall promptly disclose to LUMINENTOIC INC.’s appropriate corporate officers or
directors all business opportunities that (i) are present to Employee in his or her capacity
as an employee of the company, and (ii) of a similar nature to the type of business in which
LUMINENTOIC INC. currently engages in or has expressed an interest in engaging in the future.
Employee shall not usurp or take advantage of any such business opportunity without first
offering such opportunity to LUMINENTOIC INC.

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4. Employee shall not take any of the following actions on behalf of LUMINENTOIC INC. without
the express written approval of the President.

     a) Borrowing or obtaining credit in any amount or executing any guaranty;

     b) Expending funds for capital equipment in excess of budgeted expenditures for
any calendar month;

     c) Selling or transferring capital assets exceeding $500 in marked value in any
single transaction or exceeding $500 in market value in any one fiscal year;

     d) Executing any contract or making any commitment for the purchase or sale of
LUMINENTOIC INC.’s products or facilities in an amount exceeding $100;

     e) Executing any lease of real or personal property providing for any in excess
of $0;

     f) Exercising any discretionary authority or control over the management of any
employee welfare or pension benefit plan or over the disposition of the assets of any
such plan; and,

     g) Entering into or making any contract of employment on behalf of LUMINENTOIC
INC.

5. Employee is not authorized to hire, fire or discipline any employee outside of the Employee’s
organizational structure, as defined from time to time, unless authorized by the Chief
Executive Officer, President, or Vice President of Human Resources. Employee shall have the
right to discipline employees within the Employee’s organizational structure, as defined from
time to time. Employee shall have the right to fire employees within Employee’s
organizational structure, as defined from time to time, with the consent of the CEO, which
shall not be unreasonably withheld

6. The Employee shall devote all of his business time, attention, and energy to the Company and
shall not, during the term of his/her employment, be actively engaged in any managerial or
employment capacity in any other business activity for gain, profit, or other pecuniary
advantage, unless LUMINENTOIC INC. consents to Employee’s involvement in such business
activity in writing. This restriction shall not be construed as preventing the Employee from
making investments that do not unreasonably interfere with the performance of his/her duties
with the LUMINENTOIC INC.

7. Employee represents to LUMINENTOIC INC.
that he/she has no other outstanding commitments
inconsistent with any of the terms of this agreement or the services to be rendered under it.

8. Employee understands that his
or her presence at the LUMINENTOIC INC.’s worksite located at
Chatsworth, California, is an essential function of his/her position and represents herein
that he/she would not be able to perform the essential functions of his/her position from
anywhere else other than LUMINENTOIC INC.’s worksite. Additionally, Employee understands that
his or her ability to work in a high stress environment is a further essential function of
his/her position.

D. Compensation

1. Employee’s
annual salary will be $200,000 with a bonus potential of $40,000 based on
achievement of mutually agreed goals.

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2. We will also recommend that the company’s Board of Directors/Compensation Committee, at their
discretion, grant you an option to purchase 75,000 shares of the company’s common stock under the
MRV Communications, Inc. Non-director and Non-Executive Long Term Stock Incentive Plan for
Employees of LuminentOIC, Inc., which option shall be subject to the terms of said plan and the
Stock Option Agreement between you and LuminentOIC, Inc. Your options will have an exercise price
equal to the closing price per share of MRV Communication’s common stock on the NASDAQ on the date
of the grant and will vest over a four-year period in annual installments of 25% commencing on the
first anniversary of your grant date. The terms of the Options shall be set forth in a separate
stock option agreement (the “Option Agreement”). All of the Employee’s rights and remedies with
regard to the Options are set forth in the Option Agreement and the related Plan. Employee’s
ability to exercise his or her Options shall be limited by the terms of the Option Agreement and
Plan as more specifically set forth therein.

In addition, if LuminentOIC is sold to a third party and there is a change in control and you do
not continue as the Chief Financial Officer of the new entity, you will receive as severance twelve
(12) months of salary.

3. Employee understands that he or she shall be exempt from overtime payments as defined by state
and federal wage and hour laws. Employee further understands that during his/her employment,
Employee shall devote such time, interest, and effort to the performance of this agreement as may
be fairly and reasonably necessary.

E. Other Employee Benefits

1. Upon successful completion of an Introductory Period, as defined by the company’s policies and
procedures, Employee shall be entitled to all employee benefits extended, from time to time, to all
regular, full-time employees of LUMINENTOIC INC.; however, the company reserves the right to
modify, suspend or discontinue any and all benefit plans, policies, and practices at any time
without notice to or recourse by Employee.

F. Prohibition Against Assignment and Modification

1. Employee acknowledges that the services to be rendered by him or her are unique and personal.
Neither this Agreement nor any right or obligation of Employee hereunder may be assigned by
Employee without the prior written consent of the Chief Executive Officer or President of
LUMINENTOIC INC. Subject thereto, this Agreement and the covenants and conditions herein contained
shall inure to the benefit of and shall be binding upon the parties hereto and their respective
successors and permitted assigns.

2. This Agreement may not be modified except by a writing duly signed by the Chief Executive
Officer, President, or Vice President of Human Resources of LUMINENTOIC INC.

G. Execution of Other Documents and Agreements

1. Employee represents and warrants herein that he or she shall execute LUMINENTOIC INC.’s
Assignment of Rights and Confidentiality and Non-Disclosure Agreement, and further understands that
employment with the company is contingent upon employee’s execution of said agreement.

H. Background Check

1. Employee acknowledges that his/her employment with the Company is contingent upon successful
completion of a background check.

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I. Policies and Procedures

1. Employee agrees to comply with the
Company’s policies and procedures, both oral and written.
Said agreement to comply is a condition precedent to Employee’s employment with the Company.
Employee shall execute all forms acknowledging receipt of and adherence to said policies and
procedures.

I HAVE READ ALL OF THIS AGREEMENT AND UNDERSTAND
IT COMPLETELY. BY MY SIGNATURE BELOW, I REPRESENT
THAT THIS AGREEMENT IS THE ONLY STATEMENT MADE BY OR ON BEHALF OF THE COMPANY UPON WHICH I HAVE
RELIED IN SIGNING THIS AGREEMENT.

	 	 	 	 	 	 	 	 	 
	Date: December 26, 2006
	 	Brett Chloupek	 
	 
	 	 
	 
	 	[Name of Employee]
	 
	 	 	 	 	 	 	 	 
	 
	 	/s/  Brett Chloupek
	 
	 	 
	 
	 	[Signature]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Address:	 	26031 Sandburg Pl.
	 
	 	 	 	Stevenson Ranch, CA 91381
	 
	 	 	 	 	 	 	 	 
	Date: December 26, 2006
	 	LUMINENTOIC INC.
	 
	 	 	 	 	 	 	 	 
	 
	 	/s/  Betty Ann Orserio
	 
	 	 	 
	 
	 	[Signature]	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Director HR	 	 	 	 
	 
	 	 
	 
	 	[Title:  Chief Executive Officer, President, or Director of Human Resources]

4exv10w16

 

Exhibit 10.16

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into by and between
Fiberxon (Chengdu) Technology Co., Ltd. (the “Company”), and Ying “Jack” Lu (a holder of People’s
Republic of China (the “PRC”) identity card number 110108621217549, the “Executive”) in Chengdu, Sichuan
Province, PRC, effective on the date indicated below. (Company and Executive are sometimes
referred to herein as “party” or collectively as the “parties.”)

RECITALS

     WHEREAS, the Company’s parent entity Fiberxon, Inc., a Delaware corporation, and MRV
Communications, Inc., a Delaware corporation (“MRV”), along with other affiliated parties, entered
into an Agreement and Plan of Merger dated January 26, 2007, amended as of June 26, 2007 (as
amended, the “Merger Agreement”);

     WHEREAS, prior to the consummation of the transactions contemplated in the Merger Agreement,
Executive served as an executive for one of Fiberxon, Inc.’s affiliated entities, and has continued
to serve in that capacity after the date of the Merger Agreement;

     WHEREAS, subsequent to the completion of the transactions contemplated in the Merger
Agreement, MRV anticipates combining Fiberxon, Inc., including the Company and its other affiliated
entities, with MRV’s wholly-owned subsidiary, Luminent, Inc., a Delaware corporation;

     WHEREAS, Company and Executive now mutually desire to enter into this Agreement for Executive
to be employed by the Company, pursuant to the terms of this Agreement, commencing as of, and
contingent upon, the completion of the transactions contemplated in the Merger Agreement; and

     WHEREAS, as a condition of employment with the Company and the Merger Agreement, Executive
will be required to execute certain documents to protect the confidential information and business
interests of the Company and Fiberxon, Inc. as set forth in the Merger Agreement, and as may be
requested by the Company or Luminent, Inc. during the employment of Executive;

     NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:

ARTICLE 1

EMPLOYMENT

     Company hereby employs Executive and Executive hereby accepts employment from Company,
effective as of the completion of the Closing Date as that term is defined in the Merger

 

 

Agreement (hereinafter, the “Effective Date”). Executive agrees to perform the
services and to comply faithfully with his obligations of employment, under the terms and
conditions specified in this Agreement, and pursuant to the policies and procedures of the Company
that may be issued from time to time.

ARTICLE 2

TERM

     Section 2.1 Term of Employment.

     Unless terminated earlier pursuant to the provisions of Article 5 below, the term of
employment under this Agreement is for one (1) year (the “Term of Employment”), commencing from the
Effective Date.

     Section 2.2 Renewal.

     The Agreement will automatically renew on its initial expiration date, and on each successive
anniversary date thereafter for an additional one (1) year Term of Employment, unless either party
gives written notice thirty (30) days prior to the expiration date that the Agreement is not being
renewed. This Agreement and the employment relationship shall terminate on the expiration date if
the Agreement is not renewed by either party.

ARTICLE 3

COMPENSATION AND BENEFITS

     Section 3.1 Annual Base Salary. For all of the services to be rendered by Executive
hereunder, Company shall pay to Executive an annual base salary equivalent to One Hundred Seventy
Five Thousand U.S. Dollars ($175,000.00) per year (“Salary”), beginning on the Effective Date of
this Agreement. Salary shall be paid in U.S. Dollars in regular installments pursuant to the
Company’s general payroll practices as in effect from time to time, and shall be subject to
standard payroll deductions and withholdings as required by applicable law. Executive will be
responsible for all tax liabilities worldwide and social insurance premiums as required by the
applicable laws, and a corresponding amount will be withheld by the Company from Salary and paid to
the relevant tax authority and social insurance authority on Executive’s behalf.

     Section 3.2 Adjustment to Salary. Executive’s Salary may be changed from time to time
by mutual agreement of the Executive and the Company. Any such agreement shall be evidenced by a
written amendment of this Agreement and signed by both parties. The impact of the currency
exchange rate on competitive salary level will be reviewed annually as a part of Executive’s
standard review and taken into consideration when setting Executive’s annual salary.

     Section 3.3 Annual Bonus. Executive will be eligible to receive an annual bonus of
Forty Thousand U.S. Dollars ($40,000.00), less applicable deductions and withholdings as required
by applicable law, upon achievement of performance objectives to be determined by the

 

 

Board of Directors of Luminent, Inc., in consultation with the CEO, in its sole discretion (“Bonus”). Executive’s Bonus for calendar year 2007 will be calculated on an annual basis.
Objectives will be established within sixty (60) days of the Effective Date for the Bonus for
calendar year 2007 and within ninety (90) days after the commencement of each calendar year
thereafter. Up to an aggregate of fifty percent (50%) of the Bonus will be payable within forty
five (45) days of the end of each calendar year quarter based on Executive’s individual performance
in relation to the established objectives, and up to an aggregate of fifty percent (50%) of the
Bonus will be payable based on the Luminent, Inc.’s performance in relation to the established
objectives; provided, however, for calendar year 2007, the Bonus amounts allocable to the first and
second quarter shall be payable with the year-end bonus and based on Fiberxon, Inc.’s and Luminent,
Inc.’s performance in relation to the established objectives.

     Section 3.4 Equity Allocation. As of the Effective Date and pursuant to the Merger
Agreement, the Executive shall be allocated the right to an aggregate number of Restricted Stock
Units exercisable for shares of the common stock of Luminent, Inc. representing 0.18% of the total
issued and outstanding common stock of Luminent, Inc., determined as of the Effective Date and
after conclusion of the transactions contemplated in the Merger Agreement) (“Restricted Stock
Units”) on the terms and subject to the conditions set forth in the Restricted Stock Unit Award
Agreement of even date herewith by and between the Executive and Luminent, Inc. (the
“Restricted Stock Unit Agreement”), attached and incorporated herein. The terms of such
Restricted Stock Unit Agreement shall include the following:

     (i) The Restricted Stock shall be allocated pursuant to an incentive compensation plan to be
adopted by Luminent, Inc. prior to the Effective Date (the “Plan”) and pursuant to the
terms of the Restricted Stock Unit Agreement, which shall set forth the specific terms of the
allocation. Subject to the terms herein, and provided that Executive remains employed by the
Company after the Effective Date, the Restricted Stock will vest and be granted in the name of
Executive at the rate of twenty five percent (25%) per year (on a cliff basis) commencing on the
first anniversary date following the Effective Date, and continuing at the same vesting rate of
twenty five percent (25%) per year until fully vested, provided that Executive continues to be
employed by the Company.

     (ii) Upon the termination of Executive’s employment by the Company other than for Fault,
Cause, death, disability, or resignation pursuant to Article 5 below, fifty percent (50%) of any
remaining allocated but unvested Restricted Stock granted to Executive on the Effective Date, shall
immediately vest and be granted to Executive as of the Termination Date, but Executive shall not be
entitled to any further vesting. All non-vested Restricted Stock shall be forfeited and shall not
be subject to any further vesting as of the Termination Date upon the termination of Executive’s
employment by the Company for Fault or Cause, or due to Executive’s death, disability, or
resignation.

     Section 3.5 Stock Options. Executive’s unvested stock options assumed and converted
from Fiberxon stock options will continue to vest according to their original schedule. New
Luminent, Inc. options granted at the time of the initial public offering (“IPO”) will vest
according to the applicable standard vesting plan adopted by the Board of Directors of Luminent,
Inc. at the time of the IPO.

 

 

     Section 3.6 Social Insurance. Executive will be eligible for the social insurance
coverage and benefits as provided to the executive level employees of the Company at its Chengdu,
Sichuan Province, PRC office and pursuant to relevant applicable laws of the State and Shenzhen
municipality.

     Section 3.7 Global Insurance Coverage; Disability Insurance; Life Insurance.
Executive will be eligible for the global insurance coverage, disability insurance coverage, and
life insurance coverage as provided to the executive level employees of the Company at its Chengdu,
Sichuan Province office and pursuant to the terms of such benefit plans.

     Section 3.8 Company Paid Holidays. Executive will be eligible for all Company paid
holidays that are provided to employees of the Company at its Chengdu, Sichuan Province office.

     Section 3.9 Vacation Pay. Executive shall be entitled to accrue vacation according to
the following formula: 15 days plus X days per year, where X is equal to the number of years
Executive has been employed by the Company, including service to Fiberxon, with a total maximum
annual accrual of twenty (20) days. Unused vacation days shall be rolled over to the next year,
with a total maximum accrual cap of two (2) times Executive’s maximum annual accrual. Vacation
accrual and usage shall be subject to the Company’s written vacation leave policies. In exercising
paid leave, Executive shall take into consideration his duties and shall take leave at times
mutually agreeable to Executive and Company.

     Section 3.10 Paid Sick Days. Executive will be eligible for paid sick leave pursuant
to the Company’s paid sick leave policies as provided to employees at its Chengdu, Sichuan Province
office.

     Section 3.11 Reimbursement of Expenses. Executive shall be reimbursed for reasonable
travel, hotel, entertainment, and other business related expenses properly and necessarily incurred
by him in the discharge of his employment duties, and subject to the Company’s policies in effect
at the time on pre-approval of certain business expenses and reimbursement procedures. Executive
shall produce satisfactory supporting vouchers, receipts, and other documentation in connection
with such expenses before such reimbursement is made in accordance with applicable Company policy.

     Section 3.12 Automobile Allowance. Executive shall receive an automobile allowance of
Two Hundred U.S. Dollars ($200.00) per month.

     Section 3.13 Relocation Expenses. If Executive relocates at the Company’s request,
the Company shall reimburse Executive for (a) reasonable moving expenses incurred by Executive and
his family during their relocation from Executive’s primary residence to a new residence within a
reasonable distance from the new employment location; and (b) reasonable temporary housing and
living expenses to be mutually agreed upon by the Company and Executive.

 

 

ARTICLE 4

DUTIES AND RESPONSIBILITIES

     Section 4.1 Duties of Executive. Executive agrees to serve as a member of the senior
management team of the Company in a Global Vice President or equivalent position, and will report
to the Chief Executive Officer, President, or other C level officer of the Company as subsequently
determined by the Company, depending on the Company’s changing organizational structure. Executive
shall perform the duties and functions and have the responsibilities commensurate with such
position as may be assigned from time to time. Executive shall use his reasonable business efforts
to promote the interests of the Company to the employees of the Company, including without
limitation, using his best efforts to retain employees of the Company (and its related entities)
and to deter such employees from terminating their employment and/or competing with the Company,
and Executive shall foster an environment conducive to a successful post-Merger transition.
Executive shall use his best skills and ability, consistent with sound business practices, to
faithfully and diligently perform his duties and responsibilities hereunder. Executive shall
devote his full working time and attention to the business of the Company and its related entities.

     The Executive acknowledges and agrees that he may be appointed to additional positions, office
or location with the Company, or its parent company and/or related entities, for which Executive
shall not be, unless otherwise agreed to in writing by the Company, entitled to additional salary
or compensation in relation to that office, position or location.

     Executive during his employment with Company shall not (i) engage in any other employment or
business opportunity outside of his employment with the Company that may interfere with his ability
to perform his duties under this Agreement, without the express written authorization of
the Company; or (ii) engage, directly or indirectly, in any other employment, business, commercial,
or professional activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with, or that might create a conflict of interest with, the business of Company or
Company’s related entities or affiliates.

     Section 4.2 Compliance with Law. Executive agrees to comply with any and all
governmental laws, regulations, and policies in connection with his actions as an employee of the
Company. Executive shall conduct himself in accordance with the highest business standards as are
reasonably and customarily expected of such position. Executive agrees to fully cooperate and
participate in any investigation conducted by the Company relating to its interests or as may be
required by applicable law.

     Section 4.3 Policies and Procedures. Executive is expected to abide by all Company
policies and procedures. Company may issue policies, rules, regulations, guidelines, procedures or
other informational material, whether in the form of handbooks, memoranda, or otherwise, relating
to its employees and Executive agrees to comply with all such policies applicable to Executive.

 

 

     Section 4.4 Confidential Information and Trade Secrets. Executive acknowledges that,
as a condition of his employment hereunder, Executive agrees to execute and abide by the Company’s
confidentiality, non-disclosure, invention assignment, and similar agreements that are presented to
Executive to protect the Company’s trade secret, proprietary and business interests. Executive
hereby acknowledges and agrees that such agreements shall survive termination of employment and
this Agreement and shall remain in force following such termination regardless of the reason for
the termination.

ARTICLE 5

TERMINATION

     Executive’s employment relationship with the Company will terminate upon the happening of one
of the following defined events, which shall effect a termination of this Agreement on the
effective date of any such termination of employment (the “Termination Date):

     Section 5.1 Termination For Fault of Executive. The Company may immediately terminate
Executive’s employment at any time for Fault of Executive, by informing Executive of the reason(s)
for the termination. For purposes of this Agreement, “Fault” shall mean the occurrence of any one
or more of the events which the Company may unilaterally terminate the employment without notice,
allowed under relevant laws and regulations in the PRC, as reasonably determined by the Company,
which includes:

     (1) where Executive fails to satisfy the terms of recruitment during the probationary period;
(2) where Executive seriously violates labor discipline or the employer’s rules or regulations;
(3) where Executive seriously derelicts of duty, or engages in graft resulting in material harm to
the employer’s interest; and (4) where Executive is prosecuted according to law.

     Section 5.2 Termination For Cause The Company may terminate the employment of
Executive by providing one (1) month written notice to Executive, such termination to be effective
one (1) month after receipt of such notice by Executive at any time with causes (the “Cause”)
allowed under the relevant laws and regulations in the PRC.

     Section 5.3 Resignation Executive may resign from employment by providing the Company
with sixty (60) days’ prior written notice of termination.

     Section 5.4 Non Renewal of Agreement. If either party gives proper notice that the
Agreement will not be renewed, then the employment will terminate at the end of the Term of
Employment.

     Section 5.5 Payment in Lieu of Notice. Company reserves the right (but is not
obligated) to make a payment in lieu of any notice of termination of employment which Company or
Executive is required to give.

     Section 5.6 Effect of Termination for Fault of Executive, Cause, or Resignation. Upon
the termination of Executive’s employment pursuant to Sections 5.1, 5.2 or 5.3 above by

 

 

either party, the Company’s only obligations to Executive under this Agreement shall be as
follows:

     (i) The Company shall pay to Executive, or his representatives, on the date of termination of
employment (the “Termination Date”) only that portion of the base Salary provided in Section 3.1
that has been earned by Executive to the Termination Date, only that portion of the Bonus provided
in Section 3.3 that is payable to the Executive as of the Termination Date, any accrued but unpaid
vacation pay as provided in Section 3.9 as of the Termination Date, and any expense reimbursements
due and owing to Executive as of the Termination Date as provided in Sections 3.11 and 3.13; and

     (ii) Executive shall not be entitled to (a) any other Salary or compensation, (b) any further
payments under this Agreement, nor (c) any other benefits as provided in Article 3, except for any
benefit rights that may be required by law, such as the minimum amount of severance required by
applicable law under the termination pursuant to Section 5.3, and his right to any vested
Restricted Stock or stock options as of the Termination Date, pursuant to the provisions of Section
3.4 and 3.5.

     Section 5.7 Effect of Termination by the Company other than for Fault or for Cause.
Upon the termination of Executive’s employment by the Company other than for Fault or for Cause
pursuant to Section 5.1 and 5.2 above, the Company’s only obligations to Executive under this
Agreement shall be as follows:

     (i) The Company shall pay to Executive, or his representatives, on the date of termination of
employment (the “Termination Date”) a lump sum severance payment equal to one year’s base Salary at
the rate in effect at the time of the Termination Date if the Termination Date occurs less than
twelve (12) months after the Effective Date. If the Termination Date occurs twelve (12) or more
months after the Effective Date, the Company shall pay to Executive, or his representatives, on the
Termination Date, a lump sum severance payment equal to six (6) month’s base Salary at the rate in
effect at the time of the Termination Date.

     (ii) Pursuant to the provisions of Section 3.4, fifty percent (50%) of any remaining allocated
but unvested Restricted Stock granted to Executive on the Effective Date, shall immediately vest
and be granted to Executive as of the Termination Date, but Executive shall not be entitled to any
further vesting.

     (iii) Fifty percent (50%) of any remaining unvested stock options assumed and converted from
Fiberxon options held as of the Effective Date shall immediately vest as of the Termination Date,
but Executive shall not be entitled to any further vesting.

     (iv) The Company shall pay for the continued insurance coverage for Executive and Executive’s
eligible dependents, as set forth in Section 3.7, for six (6) months following the Termination
Date.

     (v) If applicable, a lump-sum payment for the balance of any non-competition compensation owed
for the effective period of the non-competition agreement provided on the Effective Date.

 

 

     (vi) Executive will receive either the full payments and benefits due to him under this
Section 5.7 or a lesser amount so that Executive will not be subject to the Golden Parachute Excise
Tax under the United Stated Internal Revenue Code, whichever results in Executive receiving more on
an after-tax basis. If applicable, Executive will choose which and to what extent payments or
benefits will be reduced.

     Section 5.8 Return of Company Property. Upon the termination of employment for any
reason, Executive shall promptly return to Company any and all documents, records, equipment, or
property of the Company or its affiliated entities.

ARTICLE 6

MISCELLANEOUS

     Section 6.1 Notices. Any notice given under this Agreement shall be sufficient if
given in writing and personally delivered or sent by mail, postage prepaid, to the Company at its
principal place of business or to Executive at his last known residence address.

     Section 6.2 Governing Law. This Agreement shall be interpreted, construed, and
governed under and according to the laws of the PRC.

     Section 6.3 Dispute Resolution Any disputes arising from this Agreement shall be
resolved through the methods set forth below:

     (i) Consultation between Executive and the Company. If consultation fails to result in a
settlement, either party may, within sixty (60) days after the initiation of the dispute, apply to
a competent Labor Dispute Arbitration Committee for arbitration;

     (ii) Either party may also, within sixty (60) days after the initiation of the dispute, apply
to a competent Labor Dispute Arbitration Committee for arbitration without consultation;

     (iii) If either party is not satisfied with the decision of the Arbitration Committee, it may,
within fifteen (15) days after receipt of the decision, appeal to a People’s Court having
jurisdiction.

     Section 6.4 Waiver. The waiver by any party to a breach of any provision of this
Agreement must be in writing and signed by such party to be effective, and shall not operate or be
construed as a waiver of any subsequent breach of this Agreement.

     Section 6.5 Entire Agreement. This Agreement comprises the entire agreement between
the parties hereto concerning the subject matter hereof. Except for such documents and agreements
that are referenced in this Agreement or may be required pursuant to the Merger Agreement, there
are no other terms, promises, representations, agreements, arrangements, or understandings, oral or
written, between or among the parties hereto, relating to the subject matter hereof, which are not
fully expressed herein. By signing below, Executive acknowledges that no promises, statements, or
inducements have been made that caused Executive to accept employment with the Company other than
those expressly stated in this Agreement, and Executive is not relying on any promises or representations that do not appear in writing
herein. This Agreement supersedes and replaces any prior employment agreements or understandings
between

 

 

Executive and the Company. Each of the parties further agrees and understands that this
Agreement can be amended or modified only by a written agreement signed by all parties.

     Section 6.6 Assignability. This Agreement is personal in nature, and neither this
Agreement nor any part of any obligation herein shall be assignable by Executive. The Company
shall be entitled to assign this Agreement to any affiliate or successor of the Company that
assumes the ownership or control of the business of the Company, and the Agreement shall inure to
the benefit of any such successor or assign.

     Section 6.7 Legal Construction. If any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein. In addition, if any court of competent jurisdiction
determines that any of the provisions set forth herein are unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce the duration or scope
of such provision as the case may be, to the extent necessary to render such provision enforceable.

     Section 6.8 Legal Fees and Costs. Except as otherwise provided herein, in the event
that any party hereto shall institute any litigation or other proceeding in order to construe or
enforce this Agreement, the prevailing party therein shall be entitled to recover its reasonable
attorney’s fees and costs incurred in connection therewith.

     WHEREFORE, the parties hereto have executed this Agreement on the dates indicated below, to be
effective as of the Effective Date on page 1, regardless of the dates actually signed.

	 	 	 	 	 
	Dated: June 29, 2007 	Fiberxon (Chengdu) Technology Co., Ltd.

 	 
	 	By:  	-s- Ji Li
 	 
	 	 	 	 
	 	Its:  	Ji Li, Legal Representative 	 
	 
	 
	 
	Dated: June 29, 2007 	YING “JACK” LU

 	 
	 	-s- Ying "Jack" Lu

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