STRATOS INTERNATIONAL INC. RESTRICTED STOCK AWARD AGREEMENT
Exhibit 99.4
This agreement dated as of December 15, 2004, as amended and restated as of September 14, 2005
(the “Award Agreement”), is entered into by and between Stratos International Inc., a Delaware
corporation (the “Company”), and Xxxxxx X. Xxxxxx (the “Grantee”). All capitalized terms used and
not otherwise defined herein shall have the meanings ascribed to them by the Stratos Lightwave,
Inc. 2003 Stock Plan (the “Plan”).
1. General. The purpose of the Plan is to provide selected officers, directors,
employees and others performing services to the Company or any Subsidiary or Affiliate with
additional incentive to promote the success of the Company’s business, encourage such persons to
remain in the service of the Company and enable such persons to acquire proprietary interests in
the Company. Shares of Restricted Stock are granted under this Award Agreement as of December 15,
2004 (the “Award Date”) subject to all of the terms of this Award Agreement and pursuant to and
subject to all of the provisions of the Plan applicable to Restricted Stock granted pursuant to
Article 8 of the Plan, which provisions are, unless otherwise provided herein, incorporated by
reference and made a part hereof to the same extent as if set forth in their entirety herein, and
to such other terms necessary or appropriate to the grant hereof having been made. A copy of the
Plan is on file in the offices of the Company.
2. Grant. Effective as of the Award Date, the Company hereby grants to the Grantee a
total of 100,000 shares of Restricted Stock (the “Restricted Shares”), subject to the restrictions
set forth in Section 3 hereof and the Plan.
3. Restrictions.
| (a) | None of the Restricted Shares may be sold, transferred, pledged, hypothecated or otherwise encumbered or disposed of until they have vested in accordance with Section 6 of this Award Agreement. | ||
| (b) | Any Restricted Shares that are not vested shall be forfeited to the Company immediately upon termination of the later of the Grantee’s employment with the Company and all of its Subsidiaries and Affiliates and Grantee’s service on the Stratos Board of Directors (the “Board”). |
4. Stock Certificates. Each stock certificate evidencing any Restricted Shares shall
contain such legends and stock transfer instructions or limitations as may be determined or
authorized by the Committee in its sole discretion; and the Company may, in its sole discretion,
retain custody of any such certificate throughout the period during which any restrictions are in
effect and require, as a condition to issuing any such certificate, that the Grantee tender to the
Company a stock power duly executed in blank relating thereto.
5. Rights as Stockholder. The Grantee shall have no rights as a stockholder with
respect to any Restricted Shares until a stock certificate for the shares is issued in Grantee’s
name. Once any such stock certificate is issued in Grantee’s name, the Grantee shall be entitled
to all rights associated with ownership of the Restricted Shares, except that the Restricted Shares
will remain subject to the restrictions set forth in Section 3 hereof and if any additional shares
of Common Stock become issuable on the basis of such Restricted Shares (e.g., a stock dividend),
any such additional shares shall be subject to the same restrictions as the shares of Restricted
Shares to which they relate.
6. Vesting. Except as otherwise provided in Sections 6(a), 6(b), 6(c) and 6(d), the
Restricted Shares granted hereunder shall become vested on the fifth anniversary of the Award Date
if the Grantee continues to be employed by the Company (or a Subsidiary or Affiliate thereof) or
serve on the Board through such date.
| (a) | Up to fifty percent (50%) of the Restricted Shares shall become vested prior to the fifth anniversary of the Award Date based on the extent to which the Company’s Revenue for a fiscal year exceeds the Company’s Revenue for its 2004 fiscal year. If the Grantee continues to be employed by the Company (or a Subsidiary or Affiliate thereof) or serve on the Board through the last day of a fiscal year ending after the Company’s 2004 fiscal year and the Revenue reported by the Company for such fiscal year exceeds the Company’s Revenue for its 2004 fiscal year, then the Restricted Shares shall thereupon become immediately vested pursuant to the following schedule: |
| Fiscal Year Revenue as a | ||||
| Percentage of 2004 Fiscal Year | Percentage of Restricted Shares | |||
| Revenue | Subject to Accelerated Vesting | |||
100% or less |
0 | % | ||
110% |
10 | % | ||
120% |
20 | % | ||
130% |
30 | % | ||
140% |
40 | % | ||
150% or more |
50 | % | ||
If the actual Revenue for a fiscal year is more than 100% and less than 150% of the
Company’s Revenue for its 2004 fiscal year and is not set forth above, the
percentage of Restricted Shares subject to accelerated vesting shall be determined
by interpolating the percentages set forth above. For purposes of the Plan, the
Company’s “Revenue” shall mean the Company’s gross revenue as determined by the
Committee and set forth in the audited consolidated financial statements of the
Company, prepared in accordance with generally accepted accounting principles
(“GAAP”). The Committee, in its sole discretion, may adjust the Revenue targets
set forth herein to take into account any unusual or nonrecurring events affecting
the Company or any Subsidiary or Affiliate or the financial statements of the
Company or any Subsidiary or Affiliate,
including without limitation any acquisitions or dispositions, and any changes in
applicable laws, regulations or accounting principles.
| (b) | Up to fifty percent (50%) of the Restricted Shares shall become vested prior to the fifth anniversary of the Award Date based on the extent to which EBIT goals set forth herein are achieved after the Company’s 2004 fiscal year. If the Grantee continues to be employed by the Company (or a Subsidiary or Affiliate thereof) or serve on the Board through the last day of the first fiscal year for which the Company reports positive EBIT for the full fiscal year (the “Base Year”), then twenty percent (20%) of the Restricted Shares shall thereupon become immediately vested. If the Grantee continues to be employed by the Company (or a Subsidiary or Affiliate thereof) through the last day of any subsequent fiscal year for which the Company reports EBIT that exceeds the EBIT for the Base Year, the Restricted Shares shall thereupon become immediately vested pursuant to the following schedule: |
| Excess of Fiscal Year EBIT | Percentage of Restricted Shares | |||
| Over Base Year EBIT | Subject to Accelerated Vesting | |||
$0 |
0 | % | ||
$1 million |
10 | % | ||
$2 million |
20 | % | ||
$3 million or more |
30 | % | ||
If the actual EBIT for a fiscal year exceeds the EBIT for the Base Year by more
than $1 million and less than $3 million and is not set forth above, the percentage
of Restricted Shares subject to accelerated vesting shall be determined by
interpolating the percentages set forth above. For purposes of this Agreement,
“EBIT” shall mean the consolidated earnings before interest and taxes of the
Company as a whole, as determined by the Committee in accordance with the audited
financial statements of the Company, prepared in accordance with GAAP. The
Committee, in its sole discretion, may adjust the EBIT targets set forth herein to
take into account any unusual or nonrecurring events affecting the Company or any
Subsidiary or Affiliate or the financial statements of the Company or any
Subsidiary or Affiliate, including without limitation any acquisitions or
dispositions, and any changes in applicable laws, regulations or accounting
principles.
| (c) | All Restricted Shares shall become immediately vested upon a Change of Control, as defined in the Plan, that occurs after December 15, 2005. In addition, 25% of the Restricted Shares shall become immediately vested upon a Change of Control, as defined in the Plan, that occurs on or prior to December 15, 2005. |
| (d) | All Restricted Shares shall become immediately vested (i) if the Grantee’s employment with the Company and all of its Subsidiaries and Affiliates is terminated due to: (A) retirement on or after Grantee’s fifty-fifth birthday with the consent of the Company; (B) retirement at any age on account of total and permanent disability as determined by the Company; or (C) death, or (ii) if the Grantee’s service on the Board shall terminate for any reason other than (A) voluntary resignation other than due to the Grantee’s total and permanent disability as determined by the Committee or (B) removal for Cause. |
7. Other Terms and Conditions. The Committee shall have the discretion to determine
such other terms and provisions hereof as stated in the Plan.
8. Applicable Law. The validity, construction, interpretation and enforceability of
this Award Agreement shall be determined and governed by the laws of the State of Illinois without
regard to any conflicts or choice of law rules or principles that might otherwise refer
construction or interpretation of this Award Agreement to the substantive law of another
jurisdiction, and any litigation arising out of this Award Agreement shall be brought in the
Circuit Court of the State of Illinois or the United States District Court of the Eastern Division
of the Northern District of Illinois and the Grantee consents to the jurisdiction and venue of
those courts.
9. Severability. The provisions of this Award Agreement are severable and if any one
or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part,
the remaining provisions, and any partially unenforceable provision to the extent enforceable in
any jurisdiction, shall nevertheless be binding and enforceable.
10. Waiver. The waiver by the Company of a breach of any provision of this Award
Agreement by Grantee shall not operate or be construed as a waiver of any subsequent breach by
Grantee.
11. Binding Effect. The provisions of this Award Agreement shall be binding upon the
parties hereto, their successors and assigns, including, without limitation, the Company, its
successors or assigns, the estate of the Grantee and the executors, administrators or trustees of
such estate and any receiver, trustee in bankruptcy or representative of the creditors of the
Grantee.
12. Withholding. Grantee agrees, as a condition of this grant, to make acceptable
arrangements to pay any withholding or other taxes that may be due as a result of the vesting of
the Restricted Shares acquired under this grant. In the event that the Company determines that any
federal, state, local or foreign tax or withholding payment is required relating to the vesting of
shares arising from this grant, the Company shall have the right to require such payments from
Grantee, or withhold such amounts from other payments due Grantee from the Company or any
Subsidiary or Affiliate.
13. Section 83(b) Election. Under Section 83 of the Internal Revenue Code of 1986, as
amended (the “Code”), the difference between the purchase price paid by the Grantee for the
Restricted Shares, if any, and their fair market value on the date Restricted Shares vest they will
be reportable as ordinary income at that time. The parties acknowledge and agree that Grantee did
not elect to be taxed on the Award Date with respect to Restricted Shares (rather than on the date
when such shares vest) by filing an election under Section 83(b) of the Code with the Internal
Revenue Service within 30 days after the Award Date. As a result, Grantee may recognize ordinary
income as the forfeiture restrictions lapse and the Restricted Shares vest.
14. No Retention Rights. Nothing herein contained shall confer on the Grantee any
right with respect to continuation of employment by the Company or its Subsidiaries or Affiliates,
or interfere with the right of the Company or its Subsidiaries or Affiliates to terminate at any
time the employment of the Grantee.
15. Construction. This Award Agreement is subject to and shall be construed in
accordance with the Plan, the terms of which are explicitly made applicable hereto. Unless
otherwise defined herein, capitalized terms in this Award Agreement shall have the same definitions
as set forth in the Plan. Except as otherwise specifically set forth in the Award Agreement, the
provisions of the Plan shall govern.
16. Prior Agreement. This Agreement amends and restates and supersedes in its
entirety the prior agreement evidencing the grant of the Restricted Shares, dated as of December
15, 2004.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
GRANTEE
|
Stratos International Inc. | |||
Xxxxxx X. Xxxxxx
|
Xxxxx Xxxxxxxxxxxxx, Chief Financial Officer |
