Stratos International, Inc. Management Retention Agreement
Exhibit 10.1
Stratos International, Inc.
Management Retention Agreement
Management Retention Agreement
This
Management Retention Agreement (the “Agreement”) is entered
into as of
2006 by
and between Stratos International, Inc., a Delaware corporation (the “Company”) and
(“Executive”). Certain capitalized terms used in this Agreement are defined in
Section 4 below.
R E C I T A L S:
The Company considers it in the best interests of the Company and its stockholders that its
key management personnel (including Executive) be encouraged to remain with the Company and to
continue to devote their efforts to the Company’s business. In connection with Executive’s
agreement to serve as of the Company, the Company has agreed to
pay certain severance amounts to Executive, to the extent set forth in, and subject to the terms
and conditions of, this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Term.
This Agreement shall terminate upon the third anniversary of the date of
this Agreement; provided, that, if a Change of Control occurs on or
prior to the third anniversary of the date of this Agreement, then
this Agreement shall terminate upon the date that all obligations of the
parties hereto with respect to this Agreement have been satisfied.
Notwithstanding the foregoing, the provisions of Section 5 of this
Agreement shall survive the termination of this Agreement if
Executive's employment is terminated for any reason during the term
of this Agreement.
2. At-Will Employment. The Company and Executive acknowledge and agree that
Executive’s employment is and shall continue to be at-will, as defined under applicable law, and
may be terminated by either party at any time, with or without cause or notice. If Executive’s
employment terminates for any reason, Executive shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company’s established employee plans or pursuant to other written
agreements with the Company.
3. Severance Benefits.
(a) Right
to Severance Benefits. If Executive’s employment is
terminated within two years following the
occurrence of a Change of Control: (i) by the Company other than for Cause, or (ii) by Executive
for Good Reason, then Executive shall be entitled to receive a lump-sum cash payment, payable
within ten (10) days after the termination of Executive’s employment, equal to the sum of (x) one
hundred percent (100%) of the Executive’s annual base salary as of the date upon which employment
terminates, plus (y) Executive’s target bonus for the fiscal year in which employment terminates,
times a percentage equal to the number of days during such year prior to the employment termination
date divided by 365.
(b) Voluntary Resignation; Termination for Cause. If (i) Executive’s employment
terminates prior to the occurrence of a Change of Control, or (ii) Executive’s employment
terminates following the occurrence of a Change of Control for any reason other than Executive’s
resignation for Good Reason or termination by the Company other than for Cause, then Executive
shall not be entitled to receive severance or other benefits except for those, if any, as may then
be established under the Company’s then existing severance and benefits plans or pursuant to other
written agreements with the Company.
4. Definitions. The following terms referred to in this Agreement shall have the
following meanings:
(a) “Cause” shall mean (i) an act of personal dishonesty taken by the Executive in
connection with his responsibilities as an employee and intended to result in personal enrichment
of Executive, (ii) Executive being convicted of a felony, (iii) a willful act by Executive which
constitutes gross misconduct and which is injurious to the Company, and (iv) the willful and
continued failure by Executive to substantially perform his duties with the Company after a demand
for substantial performance is delivered to him by the Board of Directors of the Company which
specifically identifies the basis for the Board’s belief that Executive has not substantially
performed his
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duties. For the purposes of this paragraph, no act or failure to act on Executive’s
part will be considered “willful” if Executive acted (or failed to act) in good faith or in the
reasonable belief that his act or omission was in the best interests of the Company.
(b) | “Change of 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) becomes the “beneficial owner” (as defined in Rule
13d-3 under said Act), directly or indirectly, of Company securities representing
fifty percent (50%) or more of the total voting power represented by the Company’s
then outstanding voting securities; or
(ii) The consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets; or
(iii) The consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Company’s voting securities outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least sixty percent (60%) of
the total voting power represented by the Company’s voting securities or such
surviving entity or its parent outstanding immediately after such merger or
consolidation; or
(iv) A change in the composition of the Board occurring within a two-year period, as
a result of which less 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) above, or in connection with an actual or threatened
proxy contest relating to the election of directors to the Company.
(c) | “Good Reason” shall mean the occurrence of any of the below following a Change of Control: |
(i) without Executive’s written consent, a significant reduction in the nature or
scope of Executive’s duties, authority or responsibilities, relative to Executive’s
duties, authority or responsibilities as in effect immediately prior to such change;
(ii) a reduction in excess of 10% by the Company in Executive’s base salary as in
effect immediately prior to the Change of Control;
(iii) Executive’s relocation to a facility or a location more than sixty (60) miles
from Executive’s location prior to the Change of Control, without Executive’s
written consent; or
(iv) any act or set of facts or circumstances which would, under Illinois case law
or statutes constitute a constructive termination of Executive.
5. Non-Solicitation. In consideration for the severance benefits Executive is to
receive herein, if any, Executive agrees that he or she will not, at any time during the three (3)
years following his termination date, directly or indirectly solicit any individuals to leave
employment with the Company’s (or any of its subsidiaries’) for any reason or interfere in any
other manner with the employment relationships at the time existing between the Company (or any of
its subsidiaries) and its employees or prospective employees.
6. Successors.
(a) Company’s Successors. Any successor to the Company (whether direct or indirect and
whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all
of the Company’s business and/or assets shall 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
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obligations in the absence of a succession. For
all purposes under this Agreement, the term “Company” shall include any such successor to the
Company’s business and/or assets.
(b) Executive’s Successors. The terms of this Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.
7. Notices.
(a) General. 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 one day
following mailing via overnight courier service. In the case of Executive, mailed notices shall be
addressed to him at the home address which he most recently communicated to the Company in writing.
In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination of employment by the Company for Cause or
by Executive for Good Reason following a Change of Control shall be communicated by a notice of
termination to the other party hereto given in accordance with Section 7(a) of this Agreement. Such
notice shall indicate the specific termination provision in this Agreement relied upon, shall set
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination
under the provision so indicated, and shall specify the termination date (which shall be not more
than 30 days after the giving of such notice). The failure by Executive to include in the notice
any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of
Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his
rights hereunder.
8. Miscellaneous Provisions.
(a) No Duty to Mitigate. Executive shall not be required to mitigate the value of any
benefits contemplated by this Agreement, nor shall any such benefits be reduced by any earnings or
benefits that Executive may receive from any other source.
(b) Amendment and Waiver. No provision of this Agreement shall be amended, modified,
waived or discharged unless such amendment, modification, waiver or discharge is agreed to in
writing and signed by Executive and an authorized officer of the Company (other than Executive). 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) Entire Agreement. No agreements, representations or understandings, whether oral
or written and whether express or implied, which are not expressly set forth in this Agreement have
been made or entered into by either party with respect to the subject matter hereof. This Agreement
represents the entire understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior arrangements and understandings regarding same.
(d) Severability. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision hereof, which
shall remain in full force and effect.
(e) Headings. All section headings herein are for convenience of reference only and
are not part of this Agreement, and no construction or reference shall be derived therefrom.
(f) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
(g) Governing Law. This Agreement shall be governed and construed in accordance with
the laws of the State of Illinois, without regard to any applicable conflicts of law principles.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.
Stratos International, Inc. |
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By: | Xxxxxx X. Xxxxxx | |||
Its: Chief Executive Officer | ||||
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