Document:

incy_Ex_10_7

		
			Exhibit 10.7
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						]

					
						 

					
						

					
						 

				
	
					
						
Notice of Grant of Stock Options and Option Agreement

					
					
						Incyte Corporation

					
						ID: []

					
						1801 Augustine Cut-Off

					
						Wilmington, DE  19803

					
						 

				
	
					
						[Optionee Name]

					
					
						Option Number:

					
					
						[        ]

				
	
					
						[Optionee Address]

					
					
						Plan:

					
					
						2010

				
	
					
						 

					
					
						ID:

					
					
						[        ]

				
	
					
						 

					
						 

					
						Effective <Date>, you have been granted [an Incentive/ a Nonstatutory] Stock Option Agreement to buy [______] shares of Incyte Corporation (the Company) stock at $[______] per share.

					
						 

					
						The total option price of the shares granted is $[_______]. 

					
						Shares in each period will become fully vested on the date shown.

					
						 

					
						 

					
						 

				
	
					
						Shares

					
					
						Vest Type

					
					
						Full Vest

					
					
						Expiration

				
	
					
						 

					
						 

					
						 

					
						 

				
	
					
						 

					
						You and the Company agree that these options are granted under and governed by the terms and conditions of the Company's Amended and Restated 2010 Stock Incentive Plan and the Stock Option Agreement that can be reviewed by clicking the link provided above.  By accepting this Notice, you are agreeing to all of those terms and conditions.

					
						 

					
						By accepting this Notice, you further agree that Incyte may deliver by e-mail all documents related to the Plan or this award.  You also agree that Incyte may deliver these documents by posting them on a website maintained by Incyte or by a third party under contract with Incyte.  If Incyte posts these documents on a website, it will notify you by e-mail. 

					
						 

					
						 

					
						 

					
						 

					
						 

				

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

 

 
		

		
			INCYTE CORPORATION
		

		
			AMENDED AND RESTATED 2010 STOCK INCENTIVE PLAN:
		

		
			[INCENTIVE/ NONSTATUTORY] STOCK OPTION AGREEMENT
FOR EXECUTIVE OFFICERS
		

		
			 
		

			
					
						 

					
					
						 

					
						  This option is not intended to be an incentive stock option under section 422 of the Internal Revenue Code.

					
						 

					
						 

				
	
					
						[Incentive/ Nonstatutory] Stock Option

					
					
						[For incentive stock options]  This option is intended to be an incentive stock option under section 422 of the Internal Revenue Code and will be interpreted accordingly.

					
						 

					
						[For nonstatutory stock options]  This option is not intended to be an incentive stock option under section 422 of the Internal Revenue Code.

					
						 

				
	
					
						Vesting

					
					
						[Installment vesting]  Your right to exercise this option vests in [37] installments over a [4]-year period, as shown on the Notice of Grant of Stock Options (the “grant notice”).  The first installment consists of [25]% of the total number of shares covered by this option.  It becomes exercisable on the “full vest” date shown on the grant notice.  Each of the subsequent installments consists of [2.08333]% of the total number of shares covered by this option.  The subsequent installments become exercisable at the end of each of the [36] months following the full vest date of the first installment.  The number of shares in each installment will be rounded to the nearest whole number.  No additional shares subject to this option will vest after your service with Incyte has terminated for any reason, except as provided below under “Change in Control.”

					
						[Cliff vesting]  Your right to exercise this option vests on a “cliff” basis over a [4]-year period, as shown on the Notice of Grant of Stock Options (the “grant notice”).  The option vests and becomes exercisable in full on the [4th] anniversary of the Date of Grant, which is the “full vest” date shown on the grant notice.  If your service with Incyte terminates for any reason prior to the full vest date, no portion of this option will vest or be exercisable, except as provided below under “Change in Control.” 

				
	
					
						 

					
					
						 

				
	
					
						Term

					
					
						Your option will expire in any event at the close of business at Incyte headquarters on the day before the [10th] anniversary of the Date of Grant, as shown on the grant notice.  (It will expire earlier if your Incyte service terminates, as described below.)

				
	
					
						 

					
					
						 

				
	
					
						Regular Termination

					
						or Disability

					
					
						If your service as an executive officer or director of Incyte terminates for any reason other than death, your option will expire at the close of business at Incyte headquarters on whichever of the following dates applies to you:

					
						     24 months after your service terminates, if the termination occurs because of your total and permanent disability (as defined below);

				

		
			
		

		

		 

 

	
					
						 

					
					
						 

					
						     36 months after your service terminates, if the termination occurs because of your retirement as an employee of Incyte after you have reached a combined age and years of service totaling 75 and have completed at least 15 years of service as an employee of Incyte (“full retirement”); or

					
						     90 days after your service terminates, if the termination occurs because of any reason other than your total and permanent disability, full retirement or death.

					
						If your service as an employee (other than as an executive officer), consultant or advisor of Incyte (or any subsidiary) terminates for any reason other than death, your option will expire at the close of business at Incyte headquarters on whichever of the following dates applies to you:

					
						     6 months after your service terminates, if the termination occurs because of your total and permanent disability (as defined below); or

					
						     90 days after your service terminates, if the termination occurs because of any reason other than your total and permanent disability or death.  Notwithstanding the foregoing, if after full retirement (as defined above) as an executive officer or director, your service continues as an employee (other than an executive officer), consultant or advisor of Incyte or any of its subsidiaries, and such service terminates for any reason other than your total and permanent disability, or death, your option will expire at the later of 90 days after your service terminates or 12 months after your full retirement.

					
						“Total and permanent disability” means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than one year.

					
						 

					
						Incyte determines when your service terminates for any purpose under this option award and the Plan.

					
						 

					
						[For incentive stock options only] If you exercise your options more than 1 year after your service terminates due to total and permanent disability or 90 days after your service terminates due to full retirement, you should consult a tax advisor before exercising these options as such options may no longer qualify as incentive stock options. 

					
						 

				
	
					
						Death

					
					
						If you die while serving as an executive officer or director of Incyte, then your option will expire at the close of business at Incyte headquarters on the date 24 months after the date of death.  During that 24-month period, your estate or heirs may exercise the vested portion of your option.

				

		
			
		

		

		 

 

	
					
						 

					
					
						 

					
						If you die while serving as an employee (other than as an executive officer), consultant or advisor of Incyte (or any subsidiary), then your option will expire at the close of business at Incyte headquarters on the date 6 months after the date of death.  During that 6-month period, your estate or heirs may exercise the vested portion of your option.

					
						 

				
	
					
						Leaves of Absence

					
					
						For purposes of this option, your service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by Incyte in writing and the terms of the leave or applicable law requires continued service crediting.  But your service terminates in any event when the approved leave ends, unless you immediately return to active work.

					
						Incyte determines which leaves count for this purpose and the date the approved leave ends.

					
						 

				
	
					
						Restrictions on Exercise

					
					
						Incyte will not permit you to exercise this option if the committee designated by the Board of Directors to administer the Plan (the “Committee”) determines, in its sole and absolute discretion, that the issuance of shares at that time could violate any law or regulation.

				
	
					
						 

					
					
						 

				
	
					
						Notice of Exercise

					
					
						When you wish to exercise this option, you must notify Incyte by filing the proper “Notice of Exercise” form at the address given on the form.  Your notice must specify how many shares you wish to purchase.  Your notice must also specify how your shares should be registered (in your name only or in your and your spouse’s names as community property or as joint tenants with right of survivorship).  The notice will be effective when it is received by Incyte.

					
						If someone else wants to exercise this option after your death, that person must prove to Incyte’s satisfaction that he or she is entitled to do so.

				
	
					
						 

					
					
						 

				
	
					
						Form of Payment

					
					
						When you submit your notice of exercise, you must include payment of the option price for the shares you are purchasing.  Payment may be made in one (or a combination of two or more) of the following forms:

					
						     Your personal check, a cashier’s check or a money order.

					
						     Irrevocable directions to a securities broker approved by Incyte to sell your option shares and to deliver all or a portion of the sale proceeds to Incyte in payment of the option price and withholding taxes.  (The balance of the sale proceeds, if any, will be delivered to you.)  The directions must be given by signing a special “Notice of Exercise” form provided by Incyte.

					
						     Certificates for Incyte stock that you have owned for at least 6 months, along with any forms needed to effect a transfer of the shares to Incyte.  The value of the shares, determined as of the

				

		
			
		

		

		 

 

	
					
						 

					
					
						effective date of the option exercise, will be applied to the option price.

					
						A form of payment will not be available if the Committee determines, in its sole and absolute discretion, that such form of payment could violate any law or regulation.

					
						 

				
	
					
						Withholding Taxes

					
					
						You will not be allowed to exercise this option unless you make acceptable arrangements, satisfactory to Incyte, to pay any withholding taxes that may be due as a result of the option exercise.

				
	
					
						 

					
					
						 

				
	
					
						[Notice of Share

					
						Disposition]

					
					
						[For incentive stock options only]  If you sell or dispose of any shares acquired pursuant to this Agreement on or before the later of (i) 2 years after the Date of Grant, or (ii) 1 year after the exercise date, you shall immediately notify Incyte in writing of such disposition.  

				
	
					
						 

					
					
						 

				
	
					
						Restrictions on Resale

					
					
						By accepting the grant notice, you agree not to sell any option shares at a time when applicable laws or Incyte policies prohibit a sale.  This restriction will apply as long as you are an employee, director, consultant or advisor of Incyte (or a subsidiary).

				
	
					
						 

					
					
						 

				
	
					
						Change in Control

					
					
						The following provisions will apply in the event a Change in Control (as defined in the Plan) occurs while this option is outstanding and you are still performing service as an employee, director, consultant or advisor of Incyte (or any parent or subsidiary).  For purposes of these provisions, Incyte or any parent or subsidiary for which you are performing service is referred to as the “Employer.”

					
						 

					
						If this Agreement is not assumed or replaced with a new comparable award by the Employer (with the determination of comparability to be made by the Committee), then there would be full accelerated vesting of this option upon the Change in Control.

					
						 

					
						If this Agreement is assumed or replaced with a new comparable award, then this option (or such comparable award) would vest in full if within one year following the Change in Control your service for the Employer is terminated without Cause or is Constructively Terminated.

					
						 

					
						For purposes of this Agreement, “Cause” shall mean 

					
						 

					
						(i) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement or plan in effect between Incyte and you on the date specified in the grant notice (or where there is such an agreement or plan but it does not define “cause” (or words of like import)):  (A) your continued failure to perform your duties with the Employer (other than any such failure resulting from incapacity due to physical or mental illness or total and

				

		
			
		

		

		 

 

	
					
						 

					
					
						permanent disability, which incapacity has been recognized as such by the Committee or its designee); (B) engagement in illegal conduct, gross misconduct or dishonesty that is injurious to the Employer or its affiliates; (C) unauthorized disclosure or misuse of any of the Employer’s secret, confidential or proprietary information, knowledge or data relating to the Employer or its affiliates; or (D) violation of any of the employee policies or procedures of the Employer; or 

					
						 

					
						(ii) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement or plan in effect between Incyte and you on the date specified in the grant notice that defines “cause” (or words of like import), as defined under such agreement or plan.

					
						 

					
						For purposes of this Agreement, “Constructive Termination” shall mean 

					
						 

					
						(i) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement or plan in effect between Incyte and you on the date specified in the grant notice (or where there is such an agreement or plan but it does not define “constructive termination” (or words of like import)):  (A) the assignment to you of any duties fundamentally inconsistent with your position, authority, duties or responsibilities as in effect immediately prior to a Change in Control (or any other action by the Employer that results in a fundamental diminishment in such position, authority, duties or responsibilities as in effect immediately prior to a Change in Control), provided that neither a mere change in title alone nor reassignment to a position that is substantially similar to the position held prior to the Change in Control shall constitute fundamental diminishment; (B) the Employer requiring you to be based at any office or location more than 50 miles from the office or location where you are based immediately prior to the Change in Control; or (C) any reduction in your annual base salary or target bonus opportunity (if any) from that which exists immediately prior to a Change in Control; or 

					
						 

					
						(ii) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement or plan in effect between Incyte and you on the date specified in the grant notice that defines “constructive termination” (or words of like import), as defined under such agreement or plan.

					
						 

				
	
					
						Transfer of Option

					
					
						Prior to your death, only you may exercise this option.  You cannot transfer or assign this option.  For instance, you may not sell this option or use it as security for a loan.  If you attempt to do any of these things, this option will immediately become invalid.  You may, however, designate a family member or family trust as your beneficiary to

				

		
			
		

		

		 

 

	
					
						 

					
					
						exercise this option after your death (your designation must be in writing and delivered to Incyte), or you may dispose of this option in your will. 

					
						 

					
						Regardless of any marital property settlement agreement, Incyte is not obligated to honor a notice of exercise from your former spouse, nor is Incyte obligated to recognize your former spouse’s interest in your option in any other way.

					
						 

				
	
					
						Retention Rights

					
					
						Neither your option nor this Agreement gives you the right to be retained by Incyte (or any subsidiaries) in any capacity.  Incyte (and any subsidiaries) reserve the right to terminate your service at any time, with or without cause.

				
	
					
						 

					
					
						 

				
	
					
						Stockholder Rights

					
					
						You, or your estate or heirs, have no rights as a stockholder of Incyte until a certificate for your option shares has been issued.  No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued, except as described in the Plan.

				
	
					
						 

					
					
						 

				
	
					
						Recovery and Reimbursement of Option Gain

					
					
						Incyte shall have the right to recover, or receive reimbursement for, any compensation or profit realized by the exercise of this option or by the disposition of any option shares to the extent Incyte has such a right of recovery or reimbursement under applicable securities laws.

				
	
					
						 

					
					
						 

				
	
					
						Adjustments

					
					
						In the event of a stock split, a stock dividend or a similar change in Incyte stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.

				
	
					
						 

					
					
						 

				
	
					
						Applicable Law

					
					
						This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to its choice of law provisions).

				
	
					
						 

					
					
						 

				
	
					
						The Plan and Other Agreements

					
					
						The text of the Incyte Corporation Amended and Restated 2010 Stock Incentive Plan (the “Plan”) is incorporated in this Agreement by reference.  All capitalized terms not defined in this Agreement are subject to definition under the Plan.  If there is any discrepancy between the terms and conditions of this Agreement and the terms and conditions of the Plan, the terms and conditions of the Plan shall control.

					
						This Agreement, the grant notice and the Plan constitute the entire understanding between you and Incyte regarding this option.  Any prior agreements, commitments or negotiations concerning this option are superseded.  This Agreement may be amended by the Committee without your consent; however, if any such amendment would materially impair your rights or obligations under the Agreement, this Agreement may be amended only by another written agreement, signed by you and Incyte.

				

		
			 
		

		
			
		

		
			

		 

 

By accepting the grant notice, you agree to all
		

		
			of the terms and conditions described above and in the Plan.nptn_Ex10_2

		
			Exhibit 10.2
		

		
			
		

		
			NeoPhotonics Corporation
		

		
			Retention Agreement
		

		
			This Retention Agreement (the “Agreement”) is made and entered into by and between Timothy S. Jenks (the “Employee”) and NeoPhotonics Corporation, a Delaware corporation (the “Company”), effective as of August 5, 2016.
		

		
			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 the Employee’s employment with the Company terminate under certain circumstances.  Such benefits are intended to provide the Employee with enhanced financial security and with sufficient incentive and encouragement for the Employee to accept employment with the Company and remain with the Company.

		
			 
		

			
	
			
				 B.
			

			
	
			
			The Employee and the Company acknowledge and agree that this Agreement amends and supersedes the Amended and Restated Severance Rights Agreement dated as of April 13, 2010, as amended April 30, 2012, by and between the Employee and the Company (the “Prior Agreement”), which will be of no further force and effect.

		
			 
		

			
	
			
				 C.
			

			
	
			
			Certain capitalized terms used in the Agreement are defined in Section 7 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 the Employee is eligible to receive benefits hereunder, or immediately upon a termination of the Employee’s employment as to which the Employee 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 an Involuntary Termination and provided the Employee has satisfied the Release requirement provided in Section 4, then subject to the payment timing rules in Section 11(h), the Company will provide the Employee the following severance benefits:

			
	
			
				 (i)
			

			
	
			
			a lump sum severance payment equal to the sum of:

			
	
			
				 (1)
			

			
	
			
			200% of the Employee’s Base Compensation; 

		 

 

			
	
			
				 (2)
			

			
	
			
			100% of the Employee’s annual Target Bonus, and 

			
	
			
				 (3)
			

			
	
			
			$144,000 (which the Employee may, but is not required to, use to obtain continued health insurance coverage); and

			
	
			
				 (ii)
			

			
	
			
			the vesting of each of the 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 the 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 the Employee had maintained the Employee’s employment or consulting relationship with the Company for the first eighteen (18) months following the effective date of the Involuntary Termination.  For the avoidance of doubt, this Section 3(a)(ii) will be deemed to waive the satisfaction of any performance‐based condition contained in any then‐outstanding compensatory equity award.    

		
			 
		

		
			Subject to the payment timing rules in Section 11(h), any severance payments and benefits under Section 3(a) will be paid on the later of (x) ten (10) business days after the effective date of the Release and (y) the date of the Employee’s Involuntary Termination.
		

			
	
			
				 (b)
			

			
	
			
			Involuntary Termination Following a Change in Control.  If the Employee’s employment terminates as a result of Involuntary Termination that occurs on or within twelve (12) months following a Change in Control, and provided the Employee has satisfied the Release requirement provided in Section 4, then subject to the payment timing rules in Section 11(h), the Company will provide the Employee the following severance benefits:

			
	
			
				 (i)
			

			
	
			
			a lump sum severance payment equal to the sum of:

			
	
			
				 (1)
			

			
	
			
			200% of the Employee’s Base Compensation,

			
	
			
				 (2)
			

			
	
			
			200% of the Employee’s annual Target Bonus, and 

			
	
			
				 (3)
			

			
	
			
			$144,000 (which the Employee may, but is not required to, use to obtain continued health insurance coverage); and

			
	
			
				 (ii)
			

			
	
			
			the vesting of each of the Employee’s then-outstanding compensatory equity awards granted under any of the Company’s equity incentive plans such that (A) each of the Employee’s then‐outstanding stock options, stock appreciation rights and similar equity awards will accelerate vesting in full and become exercisable, (B) each of the Employee’s then‐outstanding restricted stock, restricted stock unit awards and similar equity awards will accelerate vesting in full.  For the avoidance of doubt, this Section 3(b)(ii) will be deemed to waive the satisfaction of any performance‐based condition contained in any then‐outstanding compensatory equity award.

		
			 
		

		
			Subject to the payment timing rules in Section 11(h), any severance payments and benefits under Section 3(b) will be paid on the later of (x) ten (10) business days after the effective date of the Release and (y) the date of the Employee’s Involuntary Termination. 
		

		
			Notwithstanding anything in this Agreement to the contrary, if the Employee's employment terminates as a result of an Involuntary Termination prior to the closing of a Change in Control, and the Employee reasonably demonstrates to the satisfaction of the Board that such termination was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in 

		 

 

Control, then for all purposes of this Agreement, such Involuntary Termination shall be deemed to have occurred pursuant to this Section 3(b) and the Employee will be eligible for severance as provided in this Section 3(b) (and not under Section 3(a)).
		

			
	
			
				 (c)
			

			
	
			
			Voluntary Resignation; Termination For Cause.  If the Employee voluntarily resigns from the Company (other than a voluntary resignation for Good Reason), 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 the Employee’s death occurs while the Employee is outside of the Employee’s 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.  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 date of termination of the Employee’s employment.

			
	
			
				 (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 the 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 the Employee had maintained the Employee’s 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. For the avoidance of doubt, this Section 3(e) will be deemed to waive the satisfaction of any performance‐based condition contained in any then‐outstanding compensatory equity award.

			
	
			
				 4.
			

			
	
			
			Release.  In order to be eligible to receive any benefits under Section 3, the Employee (or the Employee’s estate, as applicable) must (i) execute and return a general waiver and release a form provided by the Company and reasonably acceptable to the Employee, of all employment related obligations of and claims and causes of action against the Company (a “Release”), to the Company within the applicable time period set forth therein and (ii) not revoke the Release within the revocation period (if any) set forth therein; provided, however, that in no event may the applicable time period or revocation period extend beyond sixty (60) days following the Employee’s date of termination.  

			
	
			
				 5.
			

			
	
			
			No Duplication of Benefits.  For the avoidance of doubt, in no event will the Employee be entitled to receive duplicate severance benefits under Section 3(a), Section 3(b) and/or Section 3(d).

			
	
			
				 6.
			

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

			
	
			
				 7.
			

			
	
			
			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 the Employee’s existing annual base salary at the time of the Involuntary Termination, but disregarding any reduction in base salary that forms the basis for Good Reason.

			
	
			
				 (b)
			

			
	
			
			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. 

			
	
			
				 (c)
			

			
	
			
			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”)) (an “Exchange Act Person”) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, or (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities; or

			
	
			
				 (ii)
			

			
	
			
			the consummation of the sale or disposition by the Company of all or substantially all of the consolidated assets of the Company and its subsidiaries; or

			
	
			
				 (iii)
			

			
	
			
			the consummation of a merger, consolidation or similar transaction involving the Company, other than a merger or consolidation or similar transaction which would result in the stockholders of the Company immediately prior thereto owning, directly or indirectly, voting securities representing at least sixty percent (60%) of the total voting power of the surviving entity or its parent outstanding immediately after such transaction; 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.

			
	
			
				 (d)
			

			
	
			
			Deferred Payment.   “Deferred Payment” shall mean any severance pay or benefits to be paid or provided to the Employee (or the Employee’s estate or beneficiaries) pursuant to this Agreement and any other severance payments or separation benefits to be paid or provided to the Employee (or the Employee’s estate or beneficiaries), that in each case, when considered together, are considered deferred compensation under Section 409A.

			
	
			
				 (e)
			

			
	
			
			Disability.  “Disability” shall mean that the Employee has been unable to perform the Employee’s Company duties as the result of the Employee’s 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 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 occurrence, without the Employee’s written consent, of any of the following events, but if and only if (x) the Employee has given written notice to the Board within sixty (60) days after the occurrence of the events constituting the basis for Good Reason, (y) the Company has not reasonably corrected the events by the thirtieth (30th) day after receipt of such notice, and (z) the Employee voluntarily resigns from all positions the Employee holds with the Company and the Employee’s separation from service (within the meaning of Section 409A) is effective within thirty (30) after the last day of the Company’s thirty (30) cure period (that is, within 120 days after the occurrence):

			
	
			
				 (i)
			

			
	
			
			a material reduction or other material adverse change in the Employee’s job duties, responsibilities, authority or requirements, including the removal of such job duties, responsibilities, authority or requirements, which shall be deemed to include any change which requires the Employee to report to anyone other than the Board or the board of directors of a successor company, or the board of directors of the parent company where the successor company is a wholly-owned subsidiary of a parent company following a Change in Control;

			
	
			
				 (ii)
			

			
	
			
			any diminution in the Employee’s Base Compensation or Target Bonus;

			
	
			
				 (iii)
			

			
	
			
			the Company requiring the Employee to move the Employee’s principal work location to a location that increases the Employee’s one-way commute by more than 25 miles; or

			
	
			
				 (iv)
			

			
	
			
			the failure of the Company to obtain the assumption, in all material respects, of this Agreement by any successors to the Company. 

			
	
			
				 (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) the 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)
			

			
	
			
			Section 409A.  “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury regulations and formal guidance promulgated thereunder, each as may be amended or modified from time to time.

			
	
			
				 (i)
			

			
	
			
			Section 409A Limit.  “Section 409A Limit” means two (2) times the lesser of: (i) the Employee’s annualized compensation based upon the annual rate of pay paid to the Employee during the Employee’s taxable year preceding the Employee’s taxable year of the termination of the Employee’s employment as determined under, and with such adjustments as are set forth in, Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Covered the Employee’s employment is terminated. 

			
	
			
				 (j)
			

			
	
			
			Target Bonus.  “Target 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.

			
	
			
				 8.
			

			
	
			
			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 8(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 the Employee 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 the Employee to receive such amounts or, if no person is so appointed, to the Employee’s estate.

			
	
			
				 9.
			

			
	
			
			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 the Employee 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.

			
	
			
				 10.
			

			
	
			
			Arbitration.  To ensure the timely and economical resolution of disputes that may arise in connection with the Employee’s employment with the Company, the 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, the Employee’s employment, or the termination of the 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 then applicable JAMS rules. By agreeing to this arbitration procedure, both the 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 the 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 the Employee or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.

			
	
			
				 11.
			

			
	
			
			Miscellaneous Provisions.

			
	
			
				 (a)
			

			
	
			
			No Duty to Mitigate.  The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement (whether by seeking new employment or in any other manner), nor shall any such payment be reduced by any earnings that the Employee may receive from any other source.

			
	
			
				 (b)
			

			
	
			
			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.

			
	
			
				 (c)
			

			
	
			
			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 the Employee on the subjects set forth herein including without limitation the Prior Agreement.  The Agreement may be amended at any time only by mutual written agreement signed by the parties hereto.  Any equity awards granted by the Company to the Employee prior to, on or after the date of this Agreement will be governed in accordance with their terms, except to the extent specifically 

		 

 

	modified by this Agreement.  With respect to any equity awards granted on or after the date of this Agreement, the acceleration of vesting provisions provided herein will apply to such equity awards except to the extent otherwise explicitly provided in the applicable equity award agreement and agreed to in writing by the Employee prior to the grant of the applicable award.  For the avoidance of doubt, nothing in this Agreement supersedes or replaces the terms of the Proprietary Information and Inventions Agreement between the Company and the Employee, the terms of which remain in full force and effect.

			
	
			
				 (d)
			

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

			
	
			
				 (e)
			

			
	
			
			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.

			
	
			
				 (f)
			

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

			
	
			
				 (g)
			

			
	
			
			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.

			
	
			
				 (h)
			

			
	
			
			Section 409A.    

			
	
			
				 (i)
			

			
	
			
			Notwithstanding anything to the contrary in this Agreement, no Deferred Payments will be paid or provided until the Employee has a “separation from service” within the meaning of Section 409A.  Similarly, no severance payable to the Employee under this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A‐1(b)(9) will be payable until the Employee has a “separation from service” within the meaning of Section 409A.

			
	
			
				 (ii)
			

			
	
			
			It is intended that none of the severance payments or benefits under the Agreement will constitute Deferred Payments but rather will be exempt from Section 409A as a payment that would fall within the “short-term deferral period” as described in Section 11(h)(iv) below or resulting from an involuntary separation from service as described in Section 11(h)(v) below.  In no event will the Employee have discretion to determine the taxable year of payment of any Deferred Payment.  Any severance payments or benefits under the Agreement that would be considered Deferred Payments will be paid on the sixtieth (60th) day following the Employee’s separation from service, or if later, such time as required by Section 11(h)(iii).  Further, except as required by Section 11(h)(iii), any severance payments or benefits that, but for the immediately preceding sentence, would have been made to the Employee during the sixty (60) day period immediately following the Employee’s separation from service will be paid to the Employee on the sixtieth (60th) day following the Employee’s separation from service and any remaining payments will be made as provided in the Agreement.

			
	
			
				 (iii)
			

			
	
			
			Notwithstanding anything to the contrary in the Agreement, if the Employee is a “specified employee” within the meaning of Section 409A at the time of the Employee’s separation from service (other than due to death), then the Deferred Payments, if any, that are payable within the first six (6) months following the Employee’s separation from service, will become payable on the date six (6) months and one (1) day following the date of the Employee’s separation from service.  All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, in the event of the Employee’s death following the Employee’s separation from service, but before the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of the Employee’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under the Agreement is intended to constitute a separate payment under Section 1.409A-2(b)(2) of the Treasury Regulations.

		 

 

			
	
			
				 (iv)
			

			
	
			
			Any amount paid under this Plan that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of this Agreement.

			
	
			
				 (v)
			

			
	
			
			Any amount paid under this Plan that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of this Agreement.

			
	
			
				 (vi)
			

			
	
			
			The foregoing provisions are intended to comply with or be exempt from the requirements of Section 409A so that none of the payments and benefits to be provided under the Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities and ambiguous terms herein will be interpreted to so comply or be exempt.  For purposes of the Agreement, to the extent required to be exempt from or comply with Section 409A, references to termination of the Employee’s employment or similar phrases will be references to the Employee’s “separation from service” within the meaning of Section 409A.  The Company and the 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 the Employee under Section 409A.  

		
			 [Signature page follows]
		

		
			 
		

		
			
		

		
			

		 

 

IN WITNESS WHEREOF, each of the parties has executed this Retention 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/ Judi Otteson                            

				
	
					
						 

					
					
						Name: Judi Otteson

				
	
					
						 

					
					
						Date: August 8, 2016

				
	
					
						 

					
					
						 

				
	
					
						EMPLOYEE

					
					
						By:    /s/ Timothy S. Jenks                    

				
	
					
						 

					
					
						Name: Timothy S. Jenks

				
	
					
						 

					
					
						Date: August 8, 2016

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