Document:

exv10w20

 

Exhibit 10.20

Salary Continuation Agreement

     This Salary Continuation Agreement (the “Agreement”) is made as of the
10th day of August, 2004 (the “Effective Date”), by and between Trompeter
Electronics, Inc., a Delaware corporation (“Employer”), a wholly-owned
subsidiary of Stratos International, Inc. (“Parent”), and the employee whose
name appears on the signature page of this Agreement (“Employee”).

     WHEREAS, Employee is currently a valued key employee of Employer and/or
its affiliates, and Employer recognizes Employee’s contribution to the growth
and success of Employer;

     WHEREAS, Employee and Employer are currently parties to that certain
Salary Continuation Agreement dated as of October 18, 2000, as amended (the
“Prior Continuation Agreement”) and that certain Confidentiality and Noncompete
Agreement, effective as of November 3, 1997 (the “Employment Agreement”);

     WHEREAS, Employer recognizes that, in the event of a change of control of
Employer, uncertainty and questions could arise among Employer’s key employees
and could result in the departure or distraction of key personnel to the
detriment of Employer. Employer believes it is important to diminish the
inevitable distraction of Employee by virtue of the personal uncertainties and
risks created by a pending or threatened change of control, to encourage
Employee’s full attention and dedication to Employer currently and in the event
of any threatened or pending change of control of Parent;

     WHEREAS, Employer considers it essential to the best interests of Employer
and its affiliates to foster the continued employment of key personnel, such as
Employee, by providing for certain payments such as that set forth in this
Agreement; and

     NOW, THEREFORE, the parties agree as follows:

     1. Salary Continuation.

          (a) If a Change of Control (as defined below) occurs and Employee’s
employment with Employer or its successors, assigns or affiliates is terminated
by the Employer and its successors, assigns and affiliates in anticipation of
or within 12 months after the consummation of the Change of Control, then
Employer agrees to continue to pay Employee his or her base salary (as of the
consummation of the Change of Control) for the period commencing on the Change
of Control and continuing until the one-year anniversary of the Change of
Control (such payments, the “Severance Payments”). Any Severance Payments by
Employer pursuant to this Section 1 shall be paid on Employer’s regular salary
payment dates or such earlier date as Employer shall determine.

 

 

          (b) If Employee dies following a Change of Control, Employee’s estate or
heirs will be entitled to receive any payments that would otherwise have been
paid to Employee pursuant to this Section 1 upon termination of Employee’s
employment by Employer.

          (c) For purposes of this Agreement, The term “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 Parent securities representing fifty percent
(50%) or more of the total voting power represented by Parent’s then
outstanding voting securities; or (ii) The consummation of the sale or
disposition by Parent of all or substantially all Parent’s assets; or (iii) The
consummation of a merger or consolidation of Parent with any other corporation,
other than a merger or consolidation which would result in Parent’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 fifty percent (50%) of the
total voting power represented by Parent’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 of Directors of
Parent occurring within a two-year period, 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 Parent as of the date hereof,
or (B) are elected, or nominated for election, to the Board of Directors of
Parent 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
Parent.

          (d) The parties agree that none of this Agreement, the Prior Continuation
Agreement and the Employment Agreement shall be deemed to be a ‘management
retention agreement’ under the terms of Parent’s Severance Plan effective
November 15, 2002, as amended (the “Plan”), and that Employee shall be an
Eligible Employee (as defined in the Plan) entitled to benefits under the Plan
with respect to any Change of Control occurring after the date of this
Agreement. Employee shall be considered a “Class I Eligible Employee” for
purposes of the Plan with respect to any Change of Control (as defined in the
Plan) occurring after the date of this Agreement. The benefits of this
Agreement are intended to be in addition to the benefits Employee to which
Employee may be entitled to under the Plan.

          (e) Any severance payments to Employee under the Employment Agreement
shall be deducted from payments otherwise due pursuant to this Section 1.

     2. At-Will Employment. Employee and Employer acknowledge that, except as
otherwise provided under any other written agreement between Employee and
Employer, the employment of Employee by Employer or its affiliates is “at will”
and Employee’s employment may be terminated by either Employee or Employer (or,
if applicable, Employer’s affiliates) at any time. Except as otherwise provided
in this

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Agreement, this Agreement is not intended to alter materially the
compensation and benefits to which the Employee is entitled, or may become
entitled, in respect of Employee’s employment by Employer and/or its
affiliates.

     3. Termination. This Agreement shall terminate immediately without the
need for any notice or amendment if Employee ceases to be employed by Employer
or its affiliates at any time prior to the consummation of the Change of
Control, regardless of whether such termination is attributable to death,
disability, discharge, resignation, retirement or otherwise. This Agreement
shall terminate five years from the date of this Agreement unless sooner
terminated in accordance with the foregoing provisions. Notwithstanding
anything in this Agreement to the contrary, if Employee’s employment with
Employer or its affiliates is terminated during the 180 day period prior to the
date on which the Change of Control occurs, and if Employee reasonably
demonstrates that such termination of employment (i) was at the request of the
purchaser or any other third party who had at the time taken steps reasonably
calculated to effect a Change of Control or (ii) otherwise arose in connection
with or anticipation of a Change of Control, then Employee shall be entitled to
receive the full Severance Payments he or she would otherwise have been
entitled to receive had Executive remained employed by Employer or its
affiliates until the occurrence of the Change of Control.

     4. Notice. Any notice provided in this Agreement must be in writing and
must be either personally delivered, delivered by overnight courier or mailed
by first class mail to Employer at the address set forth below:

	 	 	 
	 	Trompeter
Electronics, Inc.

31194 La Baya	 	 
	

	Westlake Village, CA 91362
	

	Attention: President

and to Employee at the address set forth in the records of Employer or at such
other address or to the attention of such other person as the recipient party
shall have specified by prior written notice to the sending party. Any notice
under this Agreement will be deemed to have been given when so delivered or
five days after being mailed.

     5. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained in this Agreement.

     6. Complete Agreement. This Agreement, the Prior Continuation Agreement,
the Employment Agreement and other documents delivered in connection with this
Agreement embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations
by or

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among the parties, written or oral, which may have related to the subject
matter of this Agreement in any way.

     7. Counterparts. This Agreement may be executed on separate counterparts,
each of which shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.

     8. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit and be enforceable by the parties to this Agreement and their
respective successors and permitted assigns.

     9. Choice of Law. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the internal law, and not
the law of conflicts, of Arizona.

     10. Amendments and Waivers. Any provision of this Agreement may be
amended or waived only with the prior written consents of each of the parties.

Signature Page Follow

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

	 	 	 
	EMPLOYEE: Joe Norwood	 	
EMPLOYER: Trompeter Electronics, Inc.
	 
	 
	/s/ Joe Norwood

Signature

Joe Norwood	 	
By: /s/ Donald D. Meyers

Donald D. Meyers, Secretaryexv10w21

 

	 	 	 	 	 

Exhibit 10.21

AMENDMENT TO

MANAGEMENT RETENTION AGREEMENT

          WHEREAS, Stratos International, Inc., a Delaware corporation (the
“Corporation”) and James W. McGinley (“Executive”) entered into a Management
Retention Agreement on or about October 17, 2002, as amended (the “Agreement”);

          WHEREAS, the Corporation and the Executive wish to amend the Agreement as
set forth below; and

          WHEREAS, Section 9(b) of the Agreement provides that it can be amended at
any time by a written agreement executed by the Executive and an authorized
officer of the Corporation.

          NOW, THEREFORE, BE IT RESOLVED, that the Agreement be and it hereby is
amended as follows, effective immediately:

          1. The introductory language to Section 3(a) of the Agreement is hereby
amended and restated to add a new clause (iii), to read as follows:

“If, within thirty-six (36) months following a Change of Control,
Executive’s employment is terminated: (i) involuntarily by the Company
other than for Cause, death or Disability, (ii) voluntarily by Executive
for Good Reason, or (iii) by Executive for any reason (or no reason) at
any time after the earlier of (A) the substantial conclusion of the
Company’s exploration of various strategic alternatives to maximize
shareholder value, including any sale of the Company or other change of
control transaction (as described in the Company’s press release dated
May 19, 2004) and (B) January 1, 2005 (provided, however, that if the
Company signs a bona fide definitive agreement to effectuate the
transactions described in clause (A) before January 1, 2005, then the
January 1, 2005 date shall be extended until the closing or termination
of such definitive agreement), then Executive shall be entitled to the
following benefits:”

2. Section 3(b) is amended and restated to read as follows:

“Except as otherwise provided in Section 3(a), if Executive’s employment
terminates by reason of Executive’s voluntary resignation and is not for
Good Reason, or if Executive is terminated 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.”

3. A new Section 9(i) is hereby added to the Agreement, to read as
follows:

"(i) During employment, Executive will continue to endeavor to perform
the duties and responsibilities reasonably requested of him by the Board,
including facilitating the transaction described in clause (iii)(A) of
the introductory language of Section 3(a) and working well with all of
the members of the management team. Executive will report to Board and
be evaluated like other key executives.”

4. A new Section 9(j) is hereby added to the Agreement, to read as
follows:

 

 

"(j) Executive agrees that he will resign as a director of the
Company promptly upon termination of Executive’s employment by the
Company.”

5. A new Section 9(k) is hereby added to the Agreement, to read as
follows:

"(l) Executive will not make any disclosure, issue any public statements
or otherwise cause to be disclosed any information which is designed,
intended, or is reasonably anticipated to disparage the Company or the
Company’s officers, directors, employees, business or prospects. The
provisions of this Section 9(k) shall not be deemed to prohibit Executive
from competing with the Company to the extent Executive is not prohibited
from competing with the Company pursuant to Section 11 of this
Agreement. The Company will not make, and will not permit its officers,
directors or employees to make, any disclosure, issue any public
statements or otherwise cause to be disclosed any information which is
designed, intended or is reasonably anticipated to disparage Executive or
Executive’s performance during the period Executive was employed by the
Company. The foregoing provisions of this Section 9(k) shall not apply
in any litigation or dispute resolution procedure selected or utilized by
either party.”

6. A new Section 10 is hereby added to the Agreement, to read as
follows:

“10. Release.

          (a) Definition of Released Subject Matters. The term “Released
Subject Matters” means and includes any and all matters relating or
pertaining to or arising out of any agreement, arrangement, understanding
or relationship between Executive and the Company, including
specifically, but not by way of limitation, matters which may arise at
common law, whether negligent or intentional, or under federal, state or
local statutes, including without limitation the Fair Labor Standards
Act, the Employee Retirement Income Security Act, the National Labor
Relations Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act (“ADEA”), the Rehabilitation Act of
1973, the Equal Pay Act, the Americans with Disabilities Act, applicable
civil rights acts and applicable labor and employment statutes; provided,
that the term Released Subject Matters shall not include the obligations
imposed by this Agreement, any matters arising after the date of this
Agreement, and any rights of Executive to indemnification, insurance or
exculpation in connection with Executive’s service as a director or
officer of the Company.

          (b) Release by the Company. The Company and its successors and
assigns hereby irrevocably and unconditionally releases, acquits and
forever discharges Executive and his present and former heirs,
representatives and attorneys (the “Executive Released Parties”), from
any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action,
suits, rights, demands, costs, losses, debts and expenses (including
attorneys’ fees and costs actually incurred) of any nature whatsoever,
known or unknown, suspected or unsuspected, which have arisen out of, or
which may arise with respect to, the Released Subject Matters, including,
but not limited to (yet subject to the proviso in Section 10(a) above),
claims arising out of alleged violations of any contracts, express or
implied, any covenant of good faith and fair dealing, express or implied,
or any tort, or the violation of any federal, state or other governmental
statute, regulation, or ordinance, which the Company and its successors
and assigns at any time hereinafter may have, own or hold, or claim to
have, own or hold against each or any of the Executive Released Parties.

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          (c) Release by Executive. Executive, on behalf of himself, his
heirs, successors and assigns, hereby irrevocably and unconditionally
releases, acquits and forever discharges the Company and each of the
Company’s present and former agents, directors, officers, employees,
representatives, attorneys, parents and subsidiaries, and all persons
acting by, through, under or in concert with the Company (the “Company
Released Parties”), from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses, debts
and expenses (including attorneys’ fees and costs actually incurred) of
any nature whatsoever, known or unknown, suspected or unsuspected, which
have arisen out of, or which may arise with respect to, the Released
Subject Matters, including, but not limited to(yet subject to the proviso
in Section 10(a) above), claims arising out of alleged violations of any
contracts, express or implied, any covenant of good faith and fair
dealing, express or implied, or any tort, or the violation of any
federal, state or other governmental statute, regulation, or ordinance,
which Executive and his heirs, successors or assigns at any time
hereinafter may have, own or hold, or claim to have, own or hold against
each or any of the Company Released Parties. Executive understands that
he is waiving any claims for age discrimination under the ADEA for all
claims arising on or prior to the date of this Agreement. Executive
understands that he has 21 days to consider this Agreement and if he
signs this Agreement before the lapse of the 21 day period, his decision
to accept such shortening of time is knowing and voluntary, and without
coercion. Executive understands that under the ADEA he has 7 days from
the execution of this Agreement to revoke this Agreement and this
Agreement will not become effective or enforceable until the 7-day
revocation period has expired.

          (d) Covenants Not to Sue. From and after the date of this
Agreement, the Company covenants not to institute, either on its own
behalf or on behalf of any other person or entity, any action or suit at
law or in equity, nor to institute, to prosecute or in any way to aid in
the institution or prosecution of any claim, demand, action, or cause of
action for damages, costs, expenses, or compensation for or on account of
any damage, loss or injury either to person or property, or both, whether
developed or undeveloped, resulting or to result, known or unknown, past,
present or future, against the Executive Released Parties arising out of
the Released Subject Matters. From and after the date of this Agreement,
Executive covenants not to institute, either in his individual capacity
or on behalf of any other person or entity, any action or suit at law or
in equity, nor to institute, to prosecute or in any way to aid in the
institution or prosecution of any claim, demand, action, or cause of
action for damages, costs, expenses, or compensation for or on account of
any damage, loss or injury either to person or property, or both, whether
developed or undeveloped, resulting or to result, known or unknown, past,
present or future, against the Company Released Parties arising out of
the Released Subject Matters.”

7. A new Section 11 is hereby added to the Agreement, to read as
follows:

“11. Noncompete.

          (a) Noncompete Agreement. Executive acknowledges that the Company
conducts a broad and evolving range of businesses and because of the
nature of the Company’s businesses, the Company operates on a global
basis. Executive also understand that the nature of his duties for the
Company exposes him to the Company’s proprietary trade secrets and
know-how as well as all information related to the Company’s businesses,
strategies, operations, technology, systems, processes, financial
affairs, management, and organizational and personnel matters that is not
generally known outside of the Company, and that this information is the
key to the Company’s competitive advantage. If between August 27, 2004
and January 1, 2005 the Company signs a bona fide definitive agreement to
effectuate a Change of Control and such

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Change of Control is consummated (whether before or after January 1,
2005), Executive agrees that he will not, directly or indirectly, in any
capacity during employment and during the six months following the
termination of his employment, within the Geographic Scope, engage in any
Competitive Activity. For purposes of this Agreement, “Geographic Scope”
means the United States and “Competitive Activity” means the design,
development, manufacture and sale of active or passive optical
subsystems, optoelectronic subsystems, and Rf microwave and interconnect
products to original equipment manufacturers for use in the telecom,
enterprise, military and video markets. Executive understands and agrees
that the covenants in this Section 11 are an integral component of the
consideration for this Agreement, and that, to the extent the provisions
of this Section 11 may limit his ability to earn a livelihood in a
business similar to the Company’s business for a period of time (which
Executive understands may be the case), this limitation is reasonable and
necessary to protect the legitimate business interests of the Company.

          (b) General. Executive acknowledges that the scope, location and
duration of the restrictions on his activities under this Agreement are
reasonable and necessary to protect the legitimate business interests of
the Company, and that the Company would not have entered into this
Agreement unless Executive agreed to such restrictions. If a court,
mediator or arbitration tribunal determines that any provision contained
in this Agreement is unenforceable, then the effect of such provision
will be limited and restricted so as to permit the provision to be
enforceable or, if that is not possible, such provision will be removed
from this Agreement. In either case, this Agreement should be
interpreted (even if modified) to achieve the intent expressed, and the
other provisions of this Agreement will remain in force and unmodified.
Because money damages (i.e., damages “at law”) for the breach or
threatened breach of Executive’s obligations under this Agreement would
be inadequate to properly compensate for losses resulting from my breach,
the Company may seek injunctive relief or specific performance or other
remedies “in equity” for such a breach or threatened breach, without
first being obligated to post any bond or to show actual damages. No
equitable remedy will be the exclusive remedy for any breach. In
addition, the Company may also obtain any other remedies available at
law, in equity or under this Agreement. However, nothing in this
Agreement will prevent Executive from defending any claim on its merits.
In the event of any dispute relating to this Agreement, Executive
consents to the personal jurisdiction of the state and federal courts
located in Cook County, Illinois. This Agreement does not negatively
affect any rights or protections that the Company may have under statute
or common law regarding any matters described in this Agreement.”

8. A new Section 12 is hereby added to the Agreement, to read as
follows:

“12. Additional Payments. The Company agrees that, if between August 27,
2004 and January 1, 2005 the Company signs a bona fide definitive
agreement to effectuate a Change of Control and consummates such Change
of Control (whether before or after January 1, 2005), then within ten
(10) days after the consummation of such Change of Control, Executive
will receive the amount in cash set forth in the table below:

	 	 	 
	Price Per Share Received by Company	 	 
	Stockholders in the Change of Control Transaction
	 	Payment Amount

	$5.54 or below
	 	$0
	$5.55 to $6.10
	 	$100,000
	$6.11 to $6.71
	 	$140,238
	$6.72 to $7.38
	 	$184,499
	$7.39 to $8.12
	 	$233,186
	$8.13 to $8.93
	 	$286,742
	$8.94 to $9.82
	 	$345,654
	$9.83 to $10.81
	 	$410,457
	$10.82 to $11.89
	 	$481,740
	$11.90 to $13.08
	 	$560,152
	$13.08 to $14.39
	 	$646,404
	$14.40 to $15.82
	 	$741,282
	$15.83 to $17.41
	 	$845,648
	$17.42 to $19.15
	 	$960,450
	$19.16 to $21.07
	 	$1,086,733
	$21.08 to $23.17
	 	$1,225,643
	$23.18 or above
	 	$1,378,445

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     All references to this Agreement shall mean the Agreement as amended by
this Amendment. The parties hereby agree to all of the provisions of this
Amendment. Except as amended hereby, the Agreement does and shall remain in
full force and effect.

     IN WITNESS WHEREOF, each of the parties has executed this Amendment, in
the case of the Company by its duly authorized officer, as of August 27, 2004.

	 	 	 
	STRATOS INTERNATIONAL, INC.	 	
EXECUTIVE
	By: /s/ David A. Slack

Name:   David A. Slack

Title:   Chief Financial Officer	 	
/s/ James W. McGinley

James W. McGinley

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