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Compensation Committee Charter
As of December 2013
Compensation Committee
CHARTER FOR THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Approved December 12, 2013


As permitted by the Bylaws of MRV Communications, Inc. (the "Company"), the Board of Directors ("Board") of the Company has established a standing Compensation Committee ("Committee") whose authority and responsibilities are described by this Charter.

Purposes of Committee

The purpose of the Committee is the assist the Board by:

  • recommending and administering policies governing the Company's compensation programs and recommending to the full board appropriate grants under the Company's equity-based plans;

  • assisting the Board in its oversight of the development, implementation and effectiveness of the Company's policies and strategies relating to human resources;

  • reviewing and recommending to the Board changes (if any) to the compensation of the Company's Chief Executive Officer ("CEO") and other executive officers, including the CEO's direct reports and any other officers who report pursuant to the requirements of Section 16 of the Securities and Exchange Act of 1934, as amended; and

  • preparing any report on executive compensation required by the rules and regulations of the Securities and Exchange Commission (the "SEC"), The Nasdaq Stock Market ("Nasdaq"), and any other applicable regulatory authority.

Membership of the Committee

Appointment and Removal

  • The Board shall annually appoint the Committee's Chair and members, based on the recommendations of the Nomination and Governance Committee. The Committee's members shall serve until a successor is duly appointed or the member is removed or resigns.

  • A member of the Committee shall be automatically removed if (1) the member is no longer a director of the Company, (2) is determined by the Board to no longer be "independent" under the listing standards of Nasdaq or any applicable law, or (3) is ineligible because of other rules or requirements.

  • Committee members may otherwise be removed or replaced by vote of the Board.

Number and Qualifications

  • The Committee will be comprised of at least three directors. The members must be "independent" as that term is defined under the listing standards of Nasdaq, any other applicable law or other rules and regulations of the Securities and Exchange Commission.

Committee Structure and Operations

  • The Committee will be governed by the same rules regarding meetings, actions without meetings, notice, waiver of notice, and quorum and voting requirements that are applicable to the Board. The Committee is authorized to adopt its own rules of procedure so long as such rules are consistent with any provision of this Charter, the Bylaws of the Corporation, or the laws of the State of Delaware.

  • The Committee shall meet, in person or by telephone conference call, as often as its members or its Chair deem necessary or desirable, generally at least twice per year. The affirmative vote of a majority of the members present at a meeting at which a quorum is present shall constitute action of the Committee. The Committee may also act by unanimous written consent in lieu of meeting. The Committee may invite such members of management and other persons to its meetings as it may deem desirable or appropriate. The CEO may not be present during any voting or deliberations of the Committee regarding the CEO's compensation.

  • The Committee shall report regularly to the Board summarizing the Committee's actions and any significant issues considered by the Committee.

Committee Duties and Responsibilities

The Committee shall have the direct responsibility and authority of the Board to perform the following duties:

Compensation

  • In consultation with senior management, to make recommendations to the Board as to the Company's general compensation philosophy and to oversee the development and implementation of compensation programs;

  • To evaluate the performance of the CEO in light of Board approved goals and objectives, and to recommend to the Board the CEO's compensation level based on this evaluation. In making the recommendation regarding the long-term incentive component of CEO compensation, the Committee shall consider, among other factors, the Company's performance and relative shareholder return, the value of similar incentive awards to chief executive officers at the Company's competitors and other comparable companies, and the awards given to the CEO in past years;

  • To make recommendations to the Board regarding the compensation (including any new compensation programs) of the other executive officers, following its review of performance evaluations of the other executive officers; and

  • To review and make recommendations to the Board with respect to the Company's incentive compensation plans and equity-based plans. To oversee these plans (including guidelines for the issuance of options and other forms of equity‑based compensation to all employees of the Company other than the Company's CEO and the other executive officers), and to discharge any responsibilities imposed on the Committee by these plans.

  • Approve issuances under, or any material amendment of, any tax qualified, non-discriminatory employee benefit plan or parallel nonqualified plan pursuant to which a director, officer, employee or consultant will acquire stock or options.

  • Approve issuances under, or any material amendment of, any stock option or other similar plan pursuant to which a person not previously an employee or director of the Company, as an inducement material to the individual's entering into employment with the Company, will acquire stock or options.

Benefits, Perquisites, Agreements and Other

To periodically review, as it deems appropriate:

  • Benefits and perquisites provided to the Company's CEO and the other executive officers; and

  • Employment agreements, severance arrangements and change in control agreements and provisions relating to any current or former executive officer of the Company.

Management Discussions

To discuss with management periodically, as it deems appropriate:

  • Reports from management regarding the development, implementation and effectiveness of the Company's policies and strategies relating to human resources; and

  • Reports from management regarding the Company's regulatory compliance with respect to compensation matters[including overseeing the Company's policies on structuring compensation programs to preserve tax deductibility, and, as and when required, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code.

Committee Reports

The Committee shall produce the following reports and provide them to the Board:

  • An annual report of the Committee on executive compensation for inclusion in the Company's annual proxy statement in accordance with applicable SEC rules and regulations.

  • An annual performance evaluation of the Committee, which evaluation shall compare the performance of the Committee with the requirements of this Charter. The performance evaluation shall also include a review of the adequacy of this Charter and shall recommend to the Board any revisions the Committee deems necessary or desirable, although the Board shall have the sole authority to amend this Charter. The performance evaluation shall be conducted in such manner as the Committee deems appropriate. The report to the Board may take the form of an oral report by the chairperson of the Committee or any other member of the Committee designated by the Committee to make this report.


Other Duties

To perform any other activities required by applicable law, rules or regulations, including the rules of the SEC and any stock exchange or market on which the Company's securities may be listed from time to time, and perform such other activities that are consistent with this Charter, the Company's Bylaws and other governing instruments of the Company, as the Committee or the Board deem necessary or appropriate.


Resources and Authority of the Committee

The Committee shall have the authority, in its sole discretion, to retain, compensate, direct, oversee and terminate, on behalf of the Company, any compensation consultant, legal counsel, accounting and other advisors as appropriate to assist in the performance of its duties and responsibilities, and to approve the fees and other retention terms for any such advisor. The Company shall provide appropriate funding, as determined by the Committee, to support the Committee's activities, including payment of compensation to any compensation consultant or other advisors retained by the Committee and of ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. The Committee shall consider factors affecting independence before selecting any compensation consultant or other advisor (independence to be determined taking into consideration factors identified by the rules of the Securities and Exchange Commission and in accordance with any applicable NASDAQ Listing Rules and applicable law). The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant or other advisor so retained.

Delegation to Subcommittee

The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities, other than its duties and responsibilities pertaining to the granting of any stock options, to a subcommittee of the Committee consisting of one or more members. In particular, the Committee may delegate the approval of certain transactions, other than approvals related to the granting of any stock options, to a subcommittee consisting solely of members of the Committee who are (i) "Non-Employee Directors" for the purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as in effect from time to time, and (ii) "outside directors" for the purposes of Section 162(m) of the Internal Revenue Code, as in effect from time to time.


Miscellaneous

Nothing contained in this Charter is intended to expand applicable standards of liability under statutory or regulatory requirements for the directors of the Company or members of the Committee. The purposes and responsibilities outlined in this Charter are meant to serve as guidelines rather than as inflexible rules and the Committee is encouraged to adopt such additional procedures and standards as it deems necessary from time to time to fulfill its responsibilities. This Charter, and any amendments thereto, shall be displayed on the Company's website and a printed copy of such shall be made available to any shareholder of the Company who requests it.

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