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Exhibit 10.1
 
THIRD AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO SECURITY AGREEMENT
 
 
THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO SECURITY AGREEMENT (this “Amendment”), dated as of February 9, 2011, is entered into by and among WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company formerly known as Wells Fargo Foothill, LLC, as administrative agent (in such capacity, “Agent”) for the Lenders (as defined below), FINISAR CORPORATION, a Delaware corporation (“Parent”), OPTIUM CORPORATION, a Delaware corporation, (“Optium” and Parent, each individually a “Borrower”, and individually and collectively, jointly and severally, the “Borrowers”) and the Lenders.
RECITALS
A.    Borrowers, the lenders party thereto from time to time (the “Lenders”) and Agent, have previously entered into that certain Credit Agreement dated as of October 2, 2009 (as the same may be modified, supplemented or amended from time to time, the “Credit Agreement”), pursuant to which the Lenders have made certain loans and financial accommodations available to Borrowers.  Terms used herein without definition shall have the meanings ascribed to them in the Credit Agreement.
B.    Borrowers, certain of Borrowers' subsidiaries identified on the signature pages thereof (such subsidiaries together with Borrowers, collectively, "Grantors") and Agent have previously entered into that certain Security Agreement dated as of October 2, 2009 (as the same may be modified, supplemented or amended from time to time, the “Security Agreement”).
C.    Borrowers have requested that Agent and the Lenders amend the Credit Agreement, and Grantors have requested that Agent and the Lenders amend the Security Agreement, all of which Agent and the Lenders are willing to do pursuant to the terms and conditions set forth herein.
D.    Borrowers and Grantors are entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of Agent's or any Lender's rights or remedies as set forth in the Credit Agreement or the Security Agreement are being waived or modified by the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
1.Amendments to Credit Agreement.
(a)Schedule E-1 of the Credit Agreement is hereby deleted in its entirety.
(b)The following definitions are hereby added to Schedule 1.1 of the Credit Agreement in alphabetical order:
" 'Acquired Indebtedness' means Indebtedness of a Person whose assets or Stock is acquired by Parent or its Subsidiaries in a Permitted Acquisition; provided, however, that such Indebtedness (a) is either Purchase Money Indebtedness or a Capital Lease with respect to Equipment or mortgage financing with respect to Real Property, (b) was in existence prior to the date of such Permitted Acquisition, and (c) was not incurred in connection with, or in contemplation of, such Permitted Acquisition." 
" 'Acquisition' means (a) the purchase or other acquisition by a Person or its Subsidiaries of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the 

 

 

purchase or other acquisition (whether by means of a merger, consolidation, or otherwise) by a Person or its Subsidiaries of all or substantially all of the Stock of any other Person."
" 'Covenant Testing Trigger Date' means the first day after the Third Amendment Effective Date that Excess Availability is less than $25,000,000." 
" 'Permitted Acquisition' means any Acquisition so long as: 
(a)    no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition and the proposed Acquisition is consensual, 
(b)    no Indebtedness will be incurred, assumed, or would exist with respect to Parent or its Subsidiaries as a result of such Acquisition, other than Indebtedness permitted under clause (n) of the definition of Permitted Indebtedness and no Liens will be incurred, assumed, or would exist with respect to the assets of Parent or its Subsidiaries as a result or such Acquisition other than Permitted Liens,
(c)    Borrowers have provided Agent with written confirmation, supported by reasonably detailed calculations, that on a pro forma basis (including pro forma adjustments arising out of events which are directly attributable to such proposed Acquisition, are factually supportable, and are expected to have a continuing impact, in each case, determined as if the combination had been accomplished at the beginning of the relevant period; such eliminations and inclusions to be mutually and reasonably agreed upon by Borrowers and Agent) created by adding the historical combined financial statements of Parent and its Subsidiaries (including the combined financial statements of any other Person or assets that were the subject of a prior Permitted Acquisition during the relevant period) to the historical consolidated financial statements of the Person to be acquired (or the historical financial statements related to the assets to be acquired) pursuant to the proposed Acquisition, Parent and its Subsidiaries (i) would have had a Fixed Charge Coverage Ratio of at least 1.1 to 1.0 for the 4 fiscal quarter period ended immediately prior to the proposed date of consummation of such proposed Acquisition, and (ii) are projected to have a Fixed Charge Coverage Ratio of at least 1.1 to 1.0 for the 4 fiscal quarter period ended one year after the proposed date of consummation of such proposed Acquisition,
(d)    Borrowers have provided Agent with their due diligence package relative to the proposed Acquisition, including forecasted balance sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all prepared on a basis consistent with such Person's (or assets') historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the 1 year period following the date of the proposed Acquisition, on a quarter by quarter basis), in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Agent,
(e)    Borrowers shall have (i) Excess Availability plus Qualified Cash in an amount equal to or greater than $50,000,000 and (ii) Excess Availability in an amount equal to or greater than $35,000,000 immediately after giving effect to the consummation of the proposed Acquisition,
(f)    Borrowers have provided Agent with written notice of the proposed Acquisition at least 15 Business Days prior to the anticipated closing date of the proposed Acquisition and, not later than 5 Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and other material documents relative to the proposed Acquisition, which agreement and documents must be reasonably acceptable to Agent,
(g)    the assets being acquired (other than a de minimis amount of assets in relation to Parent's and its Subsidiaries' total assets), or the Person whose Stock is being acquired, are useful in or engaged in, as applicable, the business of Parent and its Subsidiaries or a business reasonably 

 

 

related thereto, 
(h)    the subject assets or Stock, as applicable, are being acquired directly by a Borrower or one of its Subsidiaries that is a Loan Party, and, in connection therewith, such Borrower or the applicable Loan Party shall have complied with Section 5.11 or 5.12, as applicable, of the Agreement and, in the case of an acquisition of Stock, such Borrower or the applicable Loan Party shall have demonstrated to Agent that the new Loan Parties have received consideration sufficient to make the joinder documents binding and enforceable against such new Loan Parties, and
(i)    the purchase consideration payable in respect of all Permitted Acquisitions (including the proposed Acquisition and including any Acquired Indebtedness and deferred payment obligations) shall not exceed, together with the purchase consideration payable in respect of all Investments permitted under clause (n) of the definition of Permitted Investments, $75,000,000 in the aggregate; provided, however, that the purchase consideration payable in respect of any single Acquisition or series of related Acquisitions shall not exceed $50,000,000 in the aggregate. 
Notwithstanding anything contained herein to the contrary, in no event will assets acquired pursuant to a Permitted Acquisition constitute assets eligible for inclusion in the Borrowing Base prior to completion of a field examination and other due diligence acceptable to Agent in its Permitted Discretion (which field examination may be conducted prior to the closing of such Permitted Acquisition)."
" 'Third Amendment Effective Date' means February 9, 2011." 
(c)The definition of “Base LIBOR Rate” set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
" 'Base LIBOR Rate' means the rate per annum rate appearing on Bloomberg L.P.'s (the “Service”) Page BBAM1/(Official BBA USD Dollar Libor Fixings) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) 2 Business Days prior to the commencement of the requested Interest Period, for a term and in an amount comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Administrative Borrower in accordance with the Agreement, which determination shall be conclusive in the absence of manifest error."
(d)The definition of “Base Rate” set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
" 'Base Rate' means the greatest of (a) the Federal Funds Rate plus 1⁄2%, (b) the Base LIBOR Rate (which rate shall be calculated based upon an Interest Period of 3 months and shall be determined on a daily basis), plus 1 percentage point, and (c) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo's base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate."
(e)The definition of “Base Rate Margin” set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
" 'Base Rate Margin' means 1.75 percentage points." 
(f)The definition of “Borrowing Base” set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
" 'Borrowing Base' means, as of any date of determination, the result of:
(a)    85% of the amount of Eligible Accounts, less the amount, if any, of the Dilution Reserve, plus

 

 

(b)    80% of the amount of Eligible Investment Grade Accounts, less the amount, if any, of the Dilution Reserve, plus
(c)    the lesser of 
(i) $40,000,000, and
(ii) 80% of the amount of Eligible Credit Insured Accounts, less the amount, if any, of the Dilution Reserve, plus 
(d)    the lowest of 
(i) $10,000,000,
(ii) 80% of the amount of Eligible Specified Accounts, less the amount, if any, of the Dilution Reserve, minus
(e)    the sum of (i) the Bank Product Reserve, (ii) the Credit Insurance Reserve, and (iii) the aggregate amount of reserves, if any, established by Agent under Section 2.1(c) of the Agreement."
(g)The definition of “LIBOR Rate Margin” set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
" 'LIBOR Rate Margin' means 2.75 percentage points." 
(h)Clauses (a) and (m) of the definition of “Permitted Dispositions” set forth in Schedule 1.1 of the Credit Agreement are hereby amended and restated in their entirety to read as follows:
"(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, obsolete or no longer used in the ordinary course of business,"
"(m) so long as no Event of Default has occurred and is continuing, dispositions of assets (other than Accounts, intellectual property, licenses, Stock of Subsidiaries of Parent, or Material Contracts) not otherwise permitted in clauses (a) through (l) above so long as made at fair market value and the aggregate fair market value of all assets disposed of in all such dispositions in any fiscal year (including the proposed disposition) would not exceed $3,000,000."
(i)Clause (l) of the definition of “Permitted Indebtedness” set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“(l)     the Permitted Convertible Note Debt so long as Parent receives Net Cash Proceeds therefrom in an amount not less than $60,000,000 at the time such Indebtedness is incurred; provided, however, that no cash payments shall be made by Parent or any of its Subsidiaries on account of such Indebtedness prior to the Payoff Date unless (i) both before and after giving effect to any such cash payment, Borrowers have (A) Excess Availability plus Qualified Cash in an amount equal to or greater than $50,000,000 and (B) Excess Availability in an amount equal to or greater than $35,000,000, (ii) such cash payment is permitted by applicable law and the Indenture governing the Permitted Convertible Note Debt, and (iii) no Default or Event of Default shall have occurred and be continuing or would result therefrom; and”
(j)The definition of “Permitted Indebtedness” set forth in Schedule 1.1 of the Credit Agreement is hereby amended by: (i) deleting the "." immediately after clause (m) of such definition and inserting a "," in lieu thereof, and (ii) adding the following clauses immediately after clause (m) of such definition:
"(n)  Acquired Indebtedness in an amount not to exceed $15,000,000 outstanding at any one time, and
(o) unsecured Indebtedness incurred by Loan Parties in an aggregate amount not to exceed 

 

 

$20,000,000." 
(k)Clauses (l) through (o) of the definition of “Permitted Investments” set forth in Schedule 1.1 of the Credit Agreement are hereby amended and restated in their entirety to read as follows:
"(l) [Reserved],
(m) Permitted Acquisitions,
(n)  so long as (i) no Event of Default has occurred and is continuing or would result therefrom, and (ii) Borrowers have (x) Excess Availability plus Qualified Cash in an amount equal to or greater than $50,000,000 and (y) Excess Availability in an amount equal to or greater than $35,000,000 both before and after giving effect to any such Investment, any other Investments (other than Acquisitions) in an aggregate amount not to exceed, together with all purchase consideration payable in respect of all Permitted Acquisitions (including all Acquired Indebtedness and deferred payment obligations), $75,000,000 during the term of the Agreement, and
(o)  so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $5,000,000 in the aggregate amount outstanding at any time;"
(l)The following definitions are hereby deleted from Schedule 1.1 of the Credit Agreement in their entirety:
"Eligible Equipment ", 
"Eligible Equipment Sublimit",
"Eligible Inventory", 
"Net Orderly Liquidation Value", and
"Unused Line Margin".
(m)Schedule 5.2 of the Credit Agreement is hereby amended and replaced with Schedule 5.2 attached hereto.
(n)Section 2.10(b) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
"(b)  for the ratable account of those Lenders with Revolver Commitments, on the first day of each month from and after the Closing Date up to the first day of the month prior to the Payoff Date and on the Payoff Date, an unused line fee in an amount equal to 0.50% per annum times the result of (i) the Maximum Revolver Amount, less (ii) the average Daily Balance of the Revolver Usage during the immediately preceding month (or portion thereof)."
(o)Section 4.26 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
"4.26    [Reserved]"
(p)Section 4.27 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
"4.27    [Reserved]"
(q)Section 6.7(a)(i) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 
“(i) optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of Parent or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, and (B) Permitted Intercompany Advances; provided, however, that Parent and its Subsidiaries may optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of Parent or its Subsidiaries if not otherwise prohibited by the terms hereunder and if both before and after giving effect thereto (x) no Default or Event of Default has occurred and is continuing, (y) Excess 

 

 

Availability plus Qualified Cash is equal to or greater than $50,000,000, and (z) Excess Availability is equal to or greater than $35,000,000,”
(r)Section 6.11(b)(iii) of the Credit Agreement through and including the “;” thereafter is hereby amended and restated in its entirety to read as follows:
"(iii) in the case of Subsidiaries of Parent that are CFCs, an aggregate amount of not more than $50,000,000 at any one time (in each case, calculated at current exchange rates);"
(s)Section 7 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
"FINANCIAL COVENANTS.  Each Borrower covenants and agrees that, until termination of all of the Revolver Commitments and payment in full of the Obligations, commencing on the Covenant Testing Trigger Date, Parent and its Subsidiaries will have a Fixed Charge Coverage Ratio of at least 1.1 to 1.0, calculated on a trailing four quarter basis as of: (a) the end of the last fiscal quarter immediately preceding the Covenant Testing Trigger Date for which financial statements have most recently been delivered pursuant to Section 5.1 of this Agreement, and (b) the end of each fiscal quarter thereafter for which financial statements are delivered pursuant to Section 5.1 of this Agreement." 
(t)Section 14.1(a)(xi) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
"(xi)    change the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Investment Grade Account and Eligible Credit Insured Account) that are used in such definition to the extent that any such change results in more credit being made available to Borrowers based upon the Borrowing Base, but not otherwise, or the definitions of Maximum Revolver Amount,"
2.Amendments to Security Agreement.
(a)The following definitions are hereby added to Section 1 of the Security Agreement in alphabetical order:
" 'Activation Instruction' has the meaning specified therefor in Section 6(k)."
" 'Triggering Event' means, as of any date of determination, that (a) an Event of Default has occurred as of such date, or (b) Excess Availability is less than $25,000,000 as of such date." 
(b)Section 6(k)(ii)(C) of the Security Agreement amended and restated in its entirety to read as follows:
"(C) upon the instruction of Agent (an “Activation Instruction”), the Controlled Account Bank will forward by daily sweep all amounts in the applicable Controlled Account to the Agent's Account.  Agent agrees not to issue an Activation Instruction with respect to the Controlled Accounts unless a Triggering Event has occurred and is continuing at the time such Activation Instruction is issued.  Agent agrees to use commercially reasonable efforts to rescind an Activation Instruction (the “Rescission”) if: (1) the Triggering Event upon which such Activation Instruction was issued has been waived in writing in accordance with the terms of the Credit Agreement, and (2) no additional Triggering Event has occurred and is continuing prior to the date of the Rescission or is reasonably expected to occur on or immediately after the date of the Rescission."
3.Conditions Precedent to Effectiveness of this Amendment.  This Amendment shall not become effective until all of the following conditions precedent shall have been satisfied in the sole discretion of Agent or waived by Agent:
(a)Amendment.  Agent shall have received this Amendment fully executed in a sufficient number of counterparts for distribution to all parties.
(b)Representations and Warranties.  The representations and warranties set forth herein, in the Credit Agreement and in the Security Agreement (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) must be true and correct.
(c)Other Required Documentation.  Agent shall have received all other documents and legal 

 

 

matters in connection with the transactions contemplated by this Amendment and such documents shall have been delivered or executed or recorded and shall be in form and substance satisfactory to Agent.
4.Representations and Warranties.  Each Borrower and each Grantors represents and warrants as follows:
(a)Authority.  Each Borrower and each Grantor has the requisite corporate power and authority to execute and deliver this Amendment, and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party.  The execution, delivery and performance by each Borrower and each Grantor of this Amendment have been duly approved by all necessary corporate action, have received all necessary governmental approval, if any, and do not contravene any law or any contractual restriction binding on any Borrower or any Grantor.  No other corporate proceedings are necessary to consummate such transactions.
(b)Enforceability.  This Amendment has been duly executed and delivered by each Borrower and each Grantor.  This Amendment and each Loan Document (as amended or modified hereby) is the legal, valid and binding obligation of each Borrower and each Grantor, enforceable against each Borrower and each Grantor in accordance with its terms, and is in full force and effect.
(c)Representations and Warranties.  The representations and warranties contained in each Loan Document (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct on and as of the date hereof as though made on and as of the date hereof.
(d)No Default.  No event has occurred and is continuing that constitutes a Default or Event of Default.
5.Choice of Law.  The validity of this Amendment, the construction, interpretation, and enforcement hereof, and the rights of the parties hereto with respect to all matters arising hereunder or related hereto shall be determined under, governed by, and construed in accordance with the laws of the State of California.
6.Counterparts.  This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile shall be effective as delivery of a manually executed counterpart of this Amendment.
7.Reference to and Effect on the Loan Documents.
(a)Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.  Upon and after the effectiveness of this Amendment, each reference in the Security Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Security Agreement, and each reference in the other Loan Documents to “the Security Agreement”, “thereof” or words of like import referring to the Security Agreement, shall mean and be a reference to the Security Agreement as modified and amended hereby
(b)Except as specifically set forth in this Amendment, the Credit Agreement, the Security Agreement and all other Loan Documents, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations of Borrowers and Grantors to Agent and Lenders without defense, offset, claim or contribution.
(c)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
8.Ratification.  Each Borrower and each Grantor hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement, as amended hereby, and the Loan Documents effective as of the date hereof.
9.Estoppel.  To induce Agent and Lenders to enter into this Amendment and to induce Agent and Lenders to continue to make advances to Borrowers under the Credit Agreement, each Borrower hereby acknowledges and agrees that, after giving effect to this Amendment, as of the date hereof, there exists no Default or Event of Default and no right of offset, defense, counterclaim or objection in favor of any Borrower as against Agent or any Lender with respect to the Obligations.
10.Integration.  This Amendment, together with the other Loan Documents, incorporates all 

 

 

negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.
11.Severability.  In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
12.Submission of Amendment.  The submission of this Amendment to the parties or their agents or attorneys for review or signature does not constitute a commitment by Agent or any Lender to waive any of their respective rights and remedies under the Loan Documents, and this Amendment shall have no binding force or effect until all of the conditions to the effectiveness of this Amendment have been satisfied as set forth herein.
[Remainder of Page Left Intentionally Blank]
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.
 

 

 

		
	 
	FINISAR CORPORATION, 
a Delaware corporation

	 
	 

	 
	By: /s/ Kurt Adzema

	 
	Name: Kurt Adzema

	 
	Title: Senior Vice President and Chief Financial Officer

	 
	 

	 
	 

	 
	OPTIUM CORPORATION, 
a Delaware corporation

	 
	 

	 
	By: /s/ Kurt Adzema

	 
	Name: Kurt Adzema

	 
	Title: Senior Vice President and Chief Financial Officer

	 
	 

	 
	 

	 
	AZNA, LLC,
a Delaware limited liability company

	 
	 

	 
	By: /s/ Kurt Adzema

	 
	Name: Kurt Adzema

	 
	Title: Senior Vice President and Chief Financial Officer

	 
	 

	 
	 

	 
	FINISAR SALES INC.,
a Delaware corporation

	 
	 

	 
	By: /s/ Kurt Adzema

	 
	Name: Kurt Adzema

	 
	Title: Senior Vice President and Chief Financial Officer

	 
	 

	 
	 

	 
	KAILIGHT PHOTONICS, INC.,
a Delaware corporation

	 
	 

	 
	By: /s/ Kurt Adzema

	 
	Name: Kurt Adzema

	 
	Title: Senior Vice President and Chief Financial Officer

	 
	 

	 
	 

 

 

 

		
	 
	WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent and as a Lender

	 
	 

	 
	By: /s/ Patrick McCormack

	 
	Name:Patrick McCormack

	 
	Title:Vice President

	 
	 

	 
	 

	 
	BANK OF AMERICA, N.A., 
a national banking association, as a Lender

	 
	 

	 
	By: /s/ Nima Rassouli

	 
	Name: Nima Rassouli

	 
	Title: Assistant Vice President

 
 
 

 

 

 
Schedule 5.2
Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the documents set forth below at the following times in form satisfactory to Agent:
 
		
	Immediately upon occurrence or receipt of
	any decrease or termination of insurance coverage on any credit insured account,  
any claim for payment under any credit insurance policy, and
copies of all reports as required under any credit insurance policy. 

	Commencing on the first day after the Third Amendment Effective Date that Excess Availability is less than $25,000,000, weekly, and before such date, monthly (no later than the 15th day after the end of each month), or more frequently as Agent may request in its Permitted Discretion
	an Account roll-forward with supporting details supplied from sales journals, collection journals, credit registers and any other records,
a detailed aging, by total, of Borrowers' Accounts, together with a reconciliation and supporting documentation for any reconciling items noted (delivered electronically in an acceptable format), 
a detailed report regarding Parent's and its Subsidiaries' cash and Cash Equivalents, including an indication of which amounts constitute Qualified Cash, and
a Borrowing Base Certificate.

	Monthly (no later than the 15th day of each month)
	notice of all claims, offsets, or disputes asserted by Account Debtors with respect to each Borrower's and its Subsidiaries' Accounts, 
a monthly Account roll-forward, in a format acceptable to Agent in its discretion, tied to the beginning and ending account receivable balances of each Borrower's general ledger, and
a summary aging, by vendor, of each Borrower's and its Subsidiaries' accounts payable and any book overdraft, and accrued expenses, together with a reconciliation to each Borrower's general ledger accounts (delivered electronically in an acceptable format), and an aging, by vendor, of any held checks.

	Monthly (no later than the 30th day of each month)
	a reconciliation of Accounts and trade accounts payable of each Borrower's general ledger accounts to its monthly financial statements including any book reserves related to each category.

	Quarterly
	 a report regarding Parent's and its Subsidiaries' accrued, but unpaid, ad valorem taxes, and
a detailed report of each Borrower's and its Subsidiaries' deemed dividend tax liability.

	Annually
	a detailed list of Parent's and its Subsidiaries' customers, with address and contact information.

	Upon request by Agent
	copies of invoices together with corresponding shipping and delivery documents, and credit memos together with corresponding supporting documentation, with respect to invoices and credit memos, and 
any other information or reports as to the Collateral or the financial condition of Parent or its Subsidiaries, as Agent may reasonably request.WebFilings | EDGAR view

 

 
 
Exhibit 10.2
 
 
 
FINISAR CORPORATION
EXECUTIVE RETENTION AND SEVERANCE PLAN
AS AMENDED AND RESTATED EFFECTIVE MARCH 07, 2011
		
	1.    
	ESTABLISHMENT AND PURPOSE

1.ESTABLISHMENT. The Finisar Corporation Executive Retention and Severance Plan (the “PLAN”) was established by the Compensation Committee of the Board of Directors of Finisar Corporation, effective February 25, 2003 (the “EFFECTIVE DATE”).  The Plan was amended and restated effective January 1, 2009 to bring the provisions of the Plan into documentary compliance with the applicable requirements of Section 409A of the Internal Revenue Code, as amended (the “Code”) and the Treasury Regulations issued thereunder.  The Plan is further amended and restated to clarify certain payment provisions under the Plan effective as of March 07, 2011.
2.PURPOSE. The Company draws upon the knowledge, experience and advice of its Officers and Key Employees in order to manage its business for the benefit of the Company's stockholders. Due to the widespread awareness of the possibility of mergers, acquisitions and other strategic alliances in the Company's industry, the topic of compensation and other employee benefits in the event of a Change in Control is an issue in competitive recruitment and retention efforts. The Committee recognizes that the possibility or pending occurrence of a Change in Control could lead to uncertainty regarding the consequences of such an event and could adversely affect the Company's ability to attract, retain and motivate its Officers and Key Employees. The Committee has therefore determined that it is in the best interests of the Company and its stockholders to provide for the continued dedication of its Officers and Key Employees notwithstanding the possibility or occurrence of a Change in Control by establishing this Plan to provide designated Officers and Key Employees with enhanced financial security in the event of a Change in Control. The purpose of this Plan is to provide its Participants with specified compensation and benefits in the event of termination of employment under circumstances specified herein upon or following a Change in Control.
2.DEFINITIONS AND CONSTRUCTION
1.DEFINITIONS. Whenever used in this Plan, the following terms shall have the meanings set forth below:
(a)“BASE SALARY RATE” means a Participant's monthly base salary determined at the greater of (1) the Participant's monthly base salary rate in effect immediately prior to the Participant's Termination Upon a Change in Control or (2) the Participant's monthly base salary rate in effect immediately prior to the applicable Change in Control. For this purpose, base salary does not include any bonuses, commissions, fringe benefits, car allowances, other irregular payments or any other compensation except base salary.
(b)“BENEFIT PERIOD” means (1) with respect to a Participant who is an Executive Officer a period of twenty-four (24) months and (2) with respect to a Participant who is a Key Employee, a period of months determined by the Committee and set forth in the Participant's Participation Agreement.
(c)“BOARD” means the Board of Directors of the Company.
(d)“CAUSE” means the occurrence of any of the following, as determined in good faith by a vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board 

 

 

called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with the Participant's counsel, to be heard before the Board):
(1)the Participant's commission of any act of fraud, embezzlement or dishonesty;
(2)the Participant's unauthorized use or disclosure of confidential information or trade secrets of any member of the Company Group; or
(3)the Participant's intentional misconduct adversely affecting the business or affairs of any member of the Company Group.
(e)“CHANGE IN CONTROL” means, except as otherwise provided in the Participation Agreement applicable to a given Participant, the occurrence of any of the following:
(1)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”)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of (i) the outstanding shares of common stock of the Company or (ii) the total combined voting power of the Company's then-outstanding securities entitled to vote generally in the election of directors;
(2)the Company is party to a merger, consolidation or similar corporate transaction, or series of related transactions, which results in the holders of the voting securities of the Company outstanding immediately prior to such transaction(s) failing to retain immediately after such transaction(s) direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the securities entitled to vote generally in the election of directors of the Company or the surviving entity outstanding immediately after such transaction(s);
(3)the sale or disposition of all or substantially all of the Company's assets or consummation of any transaction, or series of related transactions, having similar effect (other than a sale or disposition to one or more subsidiaries of the Company); or
(4)a change in the composition of the Board within any consecutive two-year period as a result of which fewer than a majority of the directors are Incumbent Directors.
(f)“CHANGE IN CONTROL PERIOD” means a period commencing upon the date of the consummation of a Change in Control and ending on the date occurring eighteen (18) months thereafter.
(g)“COBRA” means the group health plan continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 and any applicable regulations promulgated thereunder.
(h)“CODE” means the Internal Revenue Code of 1986, as amended, or any successor thereto and any applicable regulations promulgated thereunder.
(i)“COMMITTEE” means the Compensation Committee of the Board.
(j)“COMPANY” means Finisar Corporation, a Delaware corporation, and, following a Change in Control, a Successor that agrees to assume all of the terms and provisions of this Plan or a Successor which otherwise becomes bound by operation of law to this Plan.
(k)“COMPANY GROUP” means the group consisting of the Company and each present or future parent and subsidiary corporation or other business entity thereof.
(l)“DISABILITY” means a Participant's permanent and total disability within the meaning of Section 22(e)(3) of the Code.
(m)“EXECUTIVE OFFICER” means an individual appointed by the Board as an executive officer of the Company and serving in such capacity both upon becoming a Participant (unless then serving as a Key Employee) and immediately prior to the consummation of a Change in Control.
(n)“GOOD REASON” means the occurrence of any of the following conditions upon or following a Change in Control, without the Participant's informed written consent, which condition(s) 

 

 

remain(s) in effect thirty (30) days after written notice to the Company from the Participant of such condition(s) delivered to the Company within ninety (90) days following the initial existence of such condition(s):
(1)assignment of the Participant to a position that is not a Substantive Functional Equivalent of the position which the Participant occupied immediately prior to the Change in Control;
(2)a material decrease in the Participant's Base Salary Rate or a material decrease in the Participant's target bonus amount (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned by the Participant);
(3)any material failure by the Company Group to (i) continue to provide the Participant with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Company Group then held by the Participant, in any benefit or compensation plans and programs, including, but not limited to, the Company Group's life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the Participant was participating immediately prior to the date of the Change in Control, or their equivalent, or (ii) provide the Participant with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Company Group then held by the Participant;
(4)the relocation of the Participant's work place for the Company Group to a location that increases the regular commute distance between the Participant's residence and work place by more than fifty (50) miles (one-way), or the imposition of travel requirements substantially more demanding of the Participant than such travel requirements existing immediately prior to the Change in Control; or
(5)any material breach of this Plan by the Company with respect to the Participant.
The existence of Good Reason shall not be affected by the Participant's temporary incapacity due to physical or mental illness not constituting a Disability. The Participant's continued employment shall not constitute consent to, or a waiver of rights with respect to, any condition constituting Good Reason hereunder. For the purposes of any determination regarding the existence of Good Reason hereunder, any claim by the Participant that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board that Good Reason does not exist, and the Board, acting in good faith, affirms such determination by a vote of not less than two-thirds of its entire membership (excluding the Participant if the Participant is a member of the Board).
(o)“INCUMBENT DIRECTOR” means a director who either (1) is a member of the Board as of the Effective Date, or (2) is elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination, but (3) was not elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of the Company.
(p)“KEY EMPLOYEE” means an individual, other than an Executive Officer, who has been designated by the Committee as eligible to participate in the Plan, and who, immediately prior to the consummation of a Change in Control, is employed by the Company Group.
(q)“OPTION” means any option to purchase shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member, whether granted before or after a Change in Control, including any such option which is assumed by, or for which a replacement option is substituted by, the Successor or any other member of the Company Group in connection with the Change in Control.
(r)“PARTICIPANT” means each Executive Officer and Key Employee designated by 

 

 

the Committee to participate in the Plan, provided such individual has executed a Participation Agreement.
(s)“PARTICIPATION AGREEMENT” means an Agreement to Participate in the Finisar Corporation Executive Retention and Severance Plan in the form attached hereto as Exhibit A or in such other form as the Committee may approve from time to time; provided, however, that, after a Participation Agreement has been entered into between a Participant and the Company, it may be modified only by a supplemental written agreement executed by both the Participant and the Company. The terms of such forms of Participation Agreement need not be identical with respect to each Participant. For example, a Participation Agreement may limit the duration of a Participant's participation in the Plan or may modify the definition of “Change in Control” with respect to a Participant, or, in the case of a Key Employee, may specify a Benefit Period that is not identical to the Benefit Period specified for other Participants.
(t)“RELEASE” means a general release of all known and unknown claims against the Company and its affiliates and their stockholders, directors, officers, employees, agents, successors and assigns substantially in the form attached hereto as Exhibit B (“General Release of Claims, Age 40 and Over”) or Exhibit C (“General Release of Claims, Under Age 40”), whichever is applicable, with any modifications thereto determined by legal counsel to the Company to be necessary or advisable to comply with applicable law or to accomplish the intent of Section 8 (Exclusive Remedy) hereof.
(u)“RESTRICTED STOCK” means any shares of the capital stock of the Company or of any other member of the Company Group granted to a Participant by the Company or any other Company Group member or acquired upon the exercise of an Option, whether such shares are granted or acquired before or after a Change in Control, including any shares issued in exchange for any such shares by a Successor or any other member of the Company Group in connection with a Change in Control.
(v)“SUBSTANTIVE FUNCTIONAL EQUIVALENT” means an employment position occupied by a Participant after a Change in Control that:
(1)is in a substantive area of competence (such as, accounting, executive management, finance, human resources, marketing, sales and service, or operations, etc.) that is consistent with the Participant's experience and not materially different from the position occupied by the Participant immediately prior to the Change in Control;
(2)allows the Participant to serve in a role and perform duties that are functionally equivalent to those performed immediately prior to the Change in Control (such as business unit executive with profit and loss responsibility, product line manager, marketing strategist, geographic sales manager, executive officer, etc.); and
(3)does not otherwise constitute a material, adverse change in the Participant's responsibilities or duties, as measured against the Participant's responsibilities or duties prior to the Change in Control, causing it to be of materially lesser rank or responsibility within the Company or an equivalent business unit of its parent.
(w)“SUCCESSOR” means any successor in interest to substantially all of the business and/or assets of the Company.
(x)“TERMINATION UPON A CHANGE IN CONTROL” means the occurrence of any of the following events:
(1)termination by the Company Group of the Participant's employment for any reason other than Cause during a Change in Control Period; or
(2)the Participant's resignation for Good Reason from employment with the Company Group during a the Change in Control Period, which resignation shall be deemed effective upon the expiration of the thirty (30) day period set fort in the definition of Good Reason above;
provided, however, that Termination Upon a Change in Control shall not include any termination of the Participant's employment which is (i) for Cause, (ii) a result of the Participant's death or Disability, or (iii) a result of the Participant's voluntary termination of employment other than for Good Reason.

 

 

2.CONSTRUCTION. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
3.ELIGIBILITY AND PARTICIPATION
The Committee shall designate those Executive Officers and Key Employees who shall be eligible to become Participants in the Plan. To become a Participant, an Executive Officer or Key Employee must execute a Participation Agreement.
		
	4.    
	TREATMENT OF EQUITY AWARDS UPON A CHANGE IN CONTROL

1.OPTIONS AND RESTRICTED STOCK. Notwithstanding any provision to the contrary contained in any plan or agreement evidencing an Option granted to a Participant, the Participant shall be credited effective immediately prior to, but conditioned upon, the consummation of a Change in Control and thereafter, for purposes of determining the extent of the vesting and exercisability of each outstanding Option then held by the Participant and the vesting of any shares of Restricted Stock acquired by the Participant upon the exercise of an Option, with one (1) additional year of employment or service with the Company Group. Furthermore, in the event of a Change in Control in which the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “ACQUIROR”), does not assume the Company's rights and obligations under the then-outstanding Options held by the Participant or substitute for such Options substantially equivalent options for the Acquiror's stock, then the vesting and exercisability of each such Option shall be accelerated in full effective immediately prior to, but conditioned upon, the consummation of the Change in Control.
2.OTHER EQUITY AWARDS. Except as set forth in Section 4.1 above, the treatment of stock-based compensation upon the consummation of a Change in Control shall be determined in accordance with the terms of the plans or agreements providing for such awards.
5.BENEFITS UPON TERMINATION UPON A CHANGE IN CONTROL
In the event of a Participant's Termination Upon a Change in Control, the Participant shall be entitled to receive the compensation and benefits described in this Section 5.
1.ACCRUED OBLIGATIONS. The Participant shall be entitled to receive:
(a)all salary, bonuses, commissions and accrued but unused vacation earned through the date of the Participant's termination of employment;
(b)reimbursement within thirty (30) business days of submission of proper expense reports of all expenses reasonably and necessarily incurred by the Participant in connection with the business of the Company Group prior to his or her termination of employment.  The Participant must submit to the Company receipts and other details of each such expense in the form required by the Company within sixty (60) days after the later of (i) the Participant's incurrence of such expense or (ii) the Participant's receipt of the invoice for such expense.  If such expense qualifies for reimbursement, then the Company shall reimburse the Participant for the expense within thirty (30) days thereafter.  In no event will such expense be reimbursed after the close of the calendar year following the calendar year in which that expense is incurred.  The amount of reimbursements to which the Participant may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year.  The Participant's right to reimbursement cannot be liquidated or exchanged for any other benefit or payment; and
(c)the benefits, if any, under any Company Group retirement plan, nonqualified deferred compensation plan, stock purchase or other stock-based compensation plan or agreement (other than any such plan or agreement pertaining to Options, Restricted Stock or other stock-based compensation whose treatment is prescribed by Section 5.2(c) below), health benefits plan or other 

 

 

Company Group benefit plan to which the Participant may be entitled pursuant to the terms of such plans or agreements, subject to compliance with Code Section 409A.
2.SEVERANCE BENEFITS. Provided that the Participant executes the Release applicable to such Participant within twenty-one (21) days (or forty-five (45) days if such longer period is required by applicable law) following the time of the Participant's Termination Upon a Change in Control and such Release becomes effective in accordance with its terms following any applicable revocation period, and subject to the provisions of Section 6, the Participant shall be entitled to receive the following severance payments and benefits:
(a)CASH SEVERANCE PAYMENT. Subject to Section 7, within sixty (60) days following the Participant's Separation from Service, the Company shall pay to the Participant in a lump sum cash payment an amount equal to the product of (a) the Participant's Base Salary Rate and (b) the number of months in the Benefit Period applicable to the Participant; provided, however, that if such sixty (60)-day period spans two taxable years, then the payment shall be made during the portion of that sixty (60)-day period that occurs during the second taxable year.
(b)HEALTH AND LIFE INSURANCE BENEFITS. For the period commencing immediately following the Participant's termination of employment and continuing for the duration of the Benefit Period applicable to the Participant, the Company shall reimburse the Participant for the costs of obtaining health (including medical and dental) and life insurance benefits for the Participant and his or her dependents substantially similar to those provided to the Participant and his or her dependents immediately prior to the date of such termination of employment (without giving effect to any reduction in such benefits constituting Good Reason).
Such reimbursement with respect to health benefits shall be limited to that portion of the Participant's premiums required under COBRA (or to be paid to any other provider of such health benefits following the termination of the COBRA period) that exceed the amount of premiums that the Participant would have been required to pay for continuing coverage had he or she continued in employment, and such reimbursement with respect to life insurance benefits shall be limited to that portion of the Participant's premium that exceeds the premiums that the Participant would have had to pay for  such coverage for the covered period had the Participant continued coverage under the Company's life insurance plans.  If the Participant and/or the Participant's dependents become eligible to receive any such coverage under another employer's benefit plans during the applicable Benefit Period, the Participant shall report such eligibility to the Company, and the Company's obligations under this subsection shall be secondary to the coverage provided by such other employer's plans. For the balance of any period in excess of the applicable Benefit Period during which the Participant is entitled to continuation coverage under COBRA, the Participant shall be entitled to maintain coverage for himself or herself and the Participant's eligible dependents at the Participant's own expense.  The Participant must submit to the Company receipts and other details of each periodic premium payment in the form required by the Company within sixty (60) days after the payment date and the Company shall reimburse the Participant for that expense within thirty (30) days thereafter.  In no event will such expense be reimbursed after the close of the calendar year following the calendar year in which that expense is incurred.  The amount of reimbursements to which a Participant may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year.  The Participant's right to reimbursement cannot be liquidated or exchanged for any other benefit or payment.
(c)ACCELERATION OF VESTING OF OPTIONS, RESTRICTED STOCK AND OTHER STOCK-BASED COMPENSATION; EXTENSION OF OPTION EXERCISE PERIOD. Notwithstanding any provision to the contrary contained in any agreement evidencing an Option, Restricted Stock or other stock-based compensation award granted to a Participant, the vesting and/or exercisability of each of the Participant's outstanding Options, Restricted Stock and other stock-based compensation awards shall be accelerated in full effective as of the date of the 

 

 

Participant's termination of employment so that each Option, share of Restricted Stock and other stock-based compensation award held by the Participant shall be immediately exercisable and/or fully vested as of such date; provided, however, that such acceleration of vesting and/or exercisability shall not apply to any stock-based compensation award where such acceleration would result in plan disqualification or would otherwise be contrary to applicable law (e.g., an employee stock purchase plan intended to qualify under Section 423 of the Code). Furthermore, each such Option, to the extent unexercised on the date on which the Participant's employment terminated, may be exercised by the Participant (or the Participant's guardian or legal representative) at any time prior to the later of the date specified in the agreement evidencing such Option or the expiration of one (1) year after the date on which the Participant's employment terminated, but in any event no later than the date of expiration of the Option's term as set forth in the agreement evidencing such Option.
3.INDEMNIFICATION; INSURANCE.
(a)In addition to any rights a Participant may have under any indemnification agreement previously entered into between the Company and such Participant (a “PRIOR INDEMNITY AGREEMENT”), from and after the date of the Participant's termination of employment, the Company shall indemnify and hold harmless the Participant against any costs or expenses (including attorneys' fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, by reason of the fact that the Participant is or was a director, officer, employee or agent of the Company Group, or is or was serving at the request of the Company Group as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, whether asserted or claimed prior to, at or after the date of the Participant's termination of employment, to the fullest extent permitted under applicable law, and the Company shall also advance fees and expenses (including attorneys' fees) as incurred by the Participant to the fullest extent permitted under applicable law. In the event of a conflict between the provisions of a Prior Indemnity Agreement and the provisions of this Plan, the Participant may elect which provisions shall govern.
(b)For a period of six (6) years from and after the date of termination of employment of a Participant who was an officer and/or director of the Company at any time prior to such termination of employment, the Company shall maintain a policy of directors' and officers' liability insurance for the benefit of such Participant which provides him or her with coverage no less favorable than that provided for the Company's continuing officers and directors.
6.FEDERAL EXCISE TAX UNDER SECTION 4999 OF THE CODE
1.EXCESS PARACHUTE PAYMENT. In the event that any payment or benefit received or to be received by the Participant pursuant to this Plan or otherwise (collectively, the “PAYMENTS”) would subject the Participant to any excise tax pursuant to Section 4999 of the Code (the “EXCISE TAX”) due to the characterization of such Payments as an excess parachute payment under Section 280G of the Code, then, notwithstanding the other provisions of this Plan, the amount of such Payments will not exceed the amount which produces the greatest after-tax benefit to the Participant.  Should a reduction in benefits be required to satisfy the benefit limit of this Section 6.1, then the portion of any Payment otherwise payable in cash under Section 5.2(a) to the Participant shall be reduced first to the extent necessary to comply with such benefit limit.  Should such benefit limit still be exceeded following such reduction, then the number of shares which would otherwise vest on an accelerated basis under each of the Participant's options or other equity awards (based on the amount of the parachute payment attributable to each such option or equity award under Code Section 280G) shall be reduced to the extent necessary to eliminate such excess, with such reduction to be made in the same chronological order in which those awards were made.
2.DETERMINATION BY ACCOUNTANTS. Upon the occurrence of any event (the “EVENT”) that would give rise to any Payments pursuant to this Plan, the Company shall promptly 

 

 

request a determination in writing by independent public accountants (the “ACCOUNTANTS”) selected by the Company and reasonably acceptable to the Participant of the amount and type of such Payments which would produce the greatest after-tax benefit to the Participant. For the purposes of such determination, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make their required determination. The Company shall bear all fees and expenses charged by the Accountants in connection with their services contemplated by this Section.
7.SECTION 409A
1.This Plan is intended to comply with the requirements of Code Section 409A.  Accordingly, all provisions herein shall be construed and interpreted to comply with Code Section 409A and if necessary, any such provision shall be deemed amended to the extent necessary to comply with Code Section 409A and the regulations thereunder.
2.Notwithstanding any provision to the contrary in this Plan, no payments or benefits to which any Participant becomes entitled under this Plan in connection with the termination of such Participant's employment with the Company shall be made or paid to the Participant prior to the earlier of (i) the first day of the seventh (7th) month following the date of the Participant's Separation from Service due to such termination of employment or (ii) the date of the Participant's death, if the Participant is deemed, pursuant to the procedures established by the Compensation Committee in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all for all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A, to be a “specified  employee” at the time of such Separation from Service and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).  Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section 7.2 shall be paid in a lump sum to the Participant, and any remaining payments due under this Plan shall be paid in accordance with the normal payment dates specified for them herein.
3.The specified employees subject to such a delayed commencement date shall be identified as of December 31 of each calendar year.  If a Participant is so identified as of any such December 31, he or she shall have specified employee status for the twelve (12)-month period beginning on April 1 of the following calendar year.
4.For purposes of this Plan, “Separation from Service” shall mean the date on which the level of the Participant's bona fide services as an Employee (or non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services the Participant rendered as an Employee during the immediately preceding thirty-six (36) months (or any shorter period of such Employee service). Any such determination, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Code Section 409A. In addition to the foregoing, a Separation from Service will not be deemed to have occurred while the Participant is on a sick leave or other bona fide leave of absence if the period of such leave does not exceed six (6) months or any longer period for which the Participant's right to reemployment with the Company is provided by either statute or contract; provided, however, that in the event of a leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and that causes the Participant to be unable to perform his  duties as an Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29) months of such leave.  If the period of the leave exceeds six (6) months (or twenty-nine (29) months in the event of disability as indicated above) and the Participant is not provided with a right to reemployment by either statute or contract, then the Participant will be deemed to have Separated from Service on the first day immediately following the expiration of the applicable six (6)-month or twenty-nine (29)-month period.

 

 

8.CONFLICT IN BENEFITS; NONCUMULATION OF BENEFITS
1.EFFECT OF PLAN. The terms of this Plan, when accepted by a Participant pursuant to an executed Participation Agreement, shall supersede all prior arrangements, whether written or oral, and understandings regarding the subject matter of this Plan and shall be the exclusive agreement for the determination of any payments and benefits due to the Participant upon the events described in Sections 4, 5 and 6.
2.NONCUMULATION OF BENEFITS. Except as expressly provided in a written agreement between a Participant and the Company entered into after the date of such Participant's Participation Agreement and which expressly disclaims this Section 8.2 and is approved by the Board or the Committee, the total amount of payments and benefits that may be received by the Participant as a result of the events described in Sections 4, 5 and 6 pursuant to (a) this Plan, (b) any agreement between the Participant and the Company or (c) any other plan, practice or statutory obligation of the Company, shall not exceed the amount of payments and benefits provided by this Plan upon such events (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), and the aggregate amounts payable under this Plan shall be reduced to the extent of any excess (but not below zero).
9.EXCLUSIVE REMEDY
The payments and benefits provided by Section 5 and Section 6 (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), if applicable, shall constitute the Participant's sole and exclusive remedy for any alleged injury or other damages arising out of the cessation of the employment relationship between the Participant and the Company in the event of the Participant's Termination Upon a Change in Control. The Participant shall be entitled to no other compensation, benefits, or other payments from the Company as a result of any Termination Upon a Change in Control with respect to which the payments and benefits described in Section 5 and Section 6 (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), if applicable, have been provided to the Participant, except as expressly set forth in this Plan or, subject to the provisions of Section 8.2, in a duly executed employment agreement between Company and the Participant.
		
	10.    
	PROPRIETARY AND CONFIDENTIAL INFORMATION

The Participant agrees to continue to abide by the terms and conditions of the confidentiality and/or proprietary rights agreement between the Participant and the Company or any other member of the Company Group.
		
	11.    
	NONSOLICITATION

If the Company performs its obligations to deliver the payments and benefits set forth in Section 5 and Section 6 (plus any payments and benefits provided pursuant to a Prior Indemnity Agreement, as described in Section 5.3(a)), then for a period equal to the Benefit Period applicable to a Participant following the Participant's Termination Upon a Change in Control, the Participant shall not, directly or indirectly, recruit, solicit or invite the solicitation of any employees of the Company to terminate their employment relationship with the Company.
		
	12.    
	NO CONTRACT OF EMPLOYMENT

Neither the establishment of the Plan, nor any amendment thereto, nor the payment of any benefits shall be construed as giving any person the right to be retained by the Company, a Successor or any other member of the Company Group. Except as otherwise established in an employment agreement between the Company and a Participant, the employment relationship between the Participant and the Company is an “at-will” relationship. Accordingly, either the Participant or the Company may terminate the relationship at any time, with or without cause, and with or without notice except as otherwise provided 

 

 

by Section 15. In addition, nothing in this Plan shall in any manner obligate any Successor or other member of the Company Group to offer employment to any Participant or to continue the employment of any Participant which it does hire for any specific duration of time.
		
	13.    
	CLAIMS FOR BENEFITS

1.ERISA PLAN. This Plan is intended to be (a) an employee welfare plan as defined in Section 3(1) of Employee Retirement Income Security Act of 1974 (“ERISA”) and (b) a “top-hat” plan maintained for the benefit of a select group of management or highly compensated employees of the Company Group.
2.APPLICATION FOR BENEFITS. All applications for payments and/or benefits under the Plan (“BENEFITS”) shall be submitted to the Company's General Counsel (the “CLAIMS ADMINISTRATOR”). Applications for Benefits must be in writing on forms acceptable to the Claims Administrator and must be signed by the Participant or beneficiary. The Claims Administrator reserves the right to require the Participant or beneficiary to furnish such other proof of the Participant's expenses, including without limitation, receipts, canceled checks, bills, and invoices as may be required by the Claims Administrator.
3.APPEAL OF DENIAL OF CLAIM.
(a)If a claimant's claim for Benefits is denied, the Claims Administrator shall provide notice to the claimant in writing of the denial within ninety (90) days after its submission. The notice shall be written in a manner calculated to be understood by the claimant and shall include:
(1)The specific reason or reasons for the denial;
(2)Specific references to the Plan provisions on which the denial is based;
(3)A description of any additional material or information necessary for the applicant to perfect the claim and an explanation of why such material or information is necessary; and
(4)An explanation of the Plan's claims review procedures and a statement of claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination.
(b)If special circumstances require an extension of time for processing the initial claim, a written notice of the extension and the reason therefor shall be furnished to the claimant before the end of the initial ninety (90) day period. In no event shall such extension exceed ninety (90) days.
(c)If a claim for Benefits is denied, the claimant, at the claimant's sole expense, may appeal the denial to the Committee (the “APPEALS ADMINISTRATOR”) within sixty (60) days of the receipt of written notice of the denial. In pursuing such appeal the applicant or his duly authorized representative:
(1)may request in writing that the Appeals Administrator review the denial;
(2)may review pertinent documents; and
(3)may submit issues and comments in writing.
(d)The decision on review shall be made within sixty (60) days of receipt of the request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the request for review. If such an extension of time is required, written notice of the extension shall be furnished to the claimant before the end of the original sixty (60) day period. The decision on review shall be made in writing, shall be written in a manner calculated to be understood by the claimant, and, if the decision on review is a denial of the claim for Benefits, shall include:
(1)The specific reason or reasons for the denial;
(2)Specific references to the Plan provisions on which the denial is based;
(3)A description of any additional material or information necessary for the applicant to perfect the claim and an explanation of why such material or information is necessary; and
(4)An explanation of the Plan's claims review procedures and a statement of 

 

 

claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination.
14.DISPUTE RESOLUTION
1.WAIVER OF JURY TRIAL. In the event of any dispute or claim relating to or arising out of this Plan that is not resolved in accordance with procedure described in Section 13, the Company and the Participant, each by executing a Participation Agreement, agree that all such disputes or claims shall be resolved by means of a court trial conducted by the superior or district court in Santa Clara County, California or as otherwise required by ERISA. The Company and the Participant, each by executing a Participation Agreement, irrevocably waive their respective rights to have any such disputes or claims tried by a jury, and agree that such courts will have personal and subject matter jurisdiction over all such claims or disputes. Notwithstanding the foregoing, in the event of any such dispute, the Company and the Participant may agree to mediate or arbitrate the dispute on such terms and conditions as may they may agree in writing.
2.ATTORNEYS' FEES. The prevailing party shall be entitled to recover from the losing party its attorneys' fees and costs incurred in any action brought to enforce any right arising out of this Plan.
15.SUCCESSORS AND ASSIGNS
1.SUCCESSORS OF THE COMPANY. The Company shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, expressly, absolutely and unconditionally to assume and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.
2.ACKNOWLEDGMENT BY COMPANY. If, after a Change in Control, the Company fails to reasonably confirm that it has performed the obligation described in Section 14.1 within thirty (30) days after written notice from the Participant, such failure shall be a material breach of this Plan and shall entitle the Participant to resign for Good Reason and to receive the benefits provided under this Plan in the event of Termination Upon a Change in Control.
3.HEIRS AND REPRESENTATIVES OF PARTICIPANT. This Plan shall inure to the benefit of and be enforceable by the Participant's personal or legal representatives, executors, administrators, successors, heirs, distributees, devises, legatees or other beneficiaries. If the Participant should die while any amount would still be payable to the Participant hereunder (other than amounts which, by their terms, terminate upon the death of the Participant) if the Participant had continued to live, then all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the executors, personal representatives or administrators of the Participant's estate.
16.NOTICES
1.GENERAL. For purposes of this Plan, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States certified mail, return receipt requested, or by overnight courier, postage prepaid, as follows:
(a)if to the Company:
Finisar Corporation
1389 Moffett Park Drive
Sunnyvale, California 94089
Attention: President
 
(b)if to the Participant, at the home address which the Participant most recently communicated to the Company in writing.
Either party may provide the other with notices of change of address, which shall be effective upon receipt.

 

 

2.NOTICE OF TERMINATION. Any termination by the Company of the Participant's employment during the Change in Control Period or any resignation by the Participant during the Change in Control Period shall be communicated by a notice of termination or resignation to the other party hereto given in accordance with Section 16.1. Such notice shall indicate the specific termination provision in this Plan 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.
17.TERMINATION AND AMENDMENT OF PLAN
This Plan and/or any Participation Agreement executed by a Participant may not be terminated with respect to such Participant without the written consent of the Participant and the approval of the Board or the Committee. The Plan and/or any Participation Agreement executed by a Participant may be modified, amended or superseded with respect to such Participant only by a supplemental written agreement between the Participant and the Company approved by the Board or the Committee.
		
	18.    
	MISCELLANEOUS PROVISIONS

1.UNFUNDED OBLIGATION. Any amounts payable to Participants pursuant to the Plan are unfunded obligations. The Company shall not be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Board or the Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant's creditors in any assets of the Company.
2.NO DUTY TO MITIGATE; OBLIGATIONS OF COMPANY. A Participant shall not be required to mitigate the amount of any payment or benefit contemplated by this Plan by seeking employment with a new employer or otherwise, nor shall any such payment or benefit (except for benefits to the extent described in Section 5.2(b)) be reduced by any compensation or benefits that the Participant may receive from employment by another employer. Except as otherwise provided by this Plan, the obligations of the Company to make payments to the Participant and to make the arrangements provided for herein are absolute and unconditional and may not be reduced by any circumstances, including without limitation any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Participant or any third party at any time.
3.NO REPRESENTATIONS. By executing a Participation Agreement, the Participant acknowledges that in becoming a Participant in the Plan, the Participant is not relying and has not relied on any promise, representation or statement made by or on behalf of the Company which is not set forth in this Plan.
4.WAIVER. No waiver by the Participant or the Company of any breach of, or of any lack of compliance with, any condition or provision of this Plan 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.
5.CHOICE OF LAW. The validity, interpretation, construction and performance of this Plan shall be governed by the substantive laws of the State of California, without regard to its conflict of law provisions.
6.VALIDITY. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect.
7.BENEFITS NOT ASSIGNABLE. Except as otherwise provided herein or by law, no right or interest of any Participant under the Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including, without limitation, by execution, levy, garnishment, attachment, pledge or in any other manner, and no attempted transfer or assignment thereof 

 

 

shall be effective. No right or interest of any Participant under the Plan shall be liable for, or subject to, any obligation or liability of such Participant.
8.TAX WITHHOLDING. All payments made pursuant to this Plan will be subject to withholding of applicable income and employment taxes.
9.CONSULTATION WITH LEGAL AND FINANCIAL ADVISORS. By executing a Participation Agreement, the Participant acknowledges that this Plan confers significant legal rights, and may also involve the waiver of rights under other agreements; that the Company has encouraged the Participant to consult with the Participant's personal legal and financial advisors; and that the Participant has had adequate time to consult with the Participant's advisors before executing the Participation Agreement.
10.FURTHER ASSURANCES. From time to time, at the Company's request and without further consideration, the Participant shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to be necessary or desirable to make effective, in the most expeditious manner possible, the terms of the Plan and the Participant's Participation Agreement, Release and Restrictive Covenants Agreement, and to provide adequate assurance of the Participant's due performance thereunder.
19.AGREEMENT
By executing a Participation Agreement, the Participant acknowledges that the Participant has received a copy of this Plan and has read, understands and is familiar with the terms and provisions of this Plan. This Plan shall constitute an agreement between the Company and the Participant executing a Participation Agreement.
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing Plan was duly amended and restated by the Committee on March 07, 2011.
\s\ Christopher Brown
 
 
 

 

 

EXHIBIT A
FORM OF
AGREEMENT TO PARTICIPATE IN THE
FINISAR CORPORATION
EXECUTIVE RETENTION AND SEVERANCE PLAN
 

 

 

AGREEMENT TO PARTICIPATE IN THE
FINISAR CORPORATION
EXECUTIVE RETENTION AND SEVERANCE PLAN
AS AMENDED AND RESTATED EFFECTIVE March 07, 2011
In consideration of the benefits provided by the Finisar Corporation Executive Retention and Severance Plan (the “PLAN”), the undersigned employee of Finisar Corporation (the “COMPANY”) and the Company agree that, as of the date written below, the undersigned shall become a Participant in the Plan and shall be fully bound by and subject to all of its provisions. All references to a “Participant” in the Plan shall be deemed to refer to the undersigned.
[THE UNDERSIGNED IS A “KEY EMPLOYEE” (AS DEFINED BY THE PLAN) AS OF THE DATE OF THIS AGREEMENT. IF THE UNDERSIGNED REMAINS A KEY EMPLOYEE, BUT NOT AN “EXECUTIVE OFFICER,” FOR THE PURPOSE OF DETERMINING ANY SEVERANCE PAYMENTS OR BENEFITS TO WHICH THE UNDERSIGNED MAY BECOME ENTITLED UNDER THE PLAN, THEN THE “BENEFIT PERIOD” APPLICABLE TO THE UNDERSIGNED UNDER THE PLAN SHALL BE PERIODS OF                   MONTHS.]
The undersigned employee acknowledges that the Plan confers significant legal rights and may also constitute a waiver of rights under other agreements with the Company; that the Company has encouraged the undersigned to consult with the undersigned's personal legal and financial advisors; and that the undersigned has had adequate time to consult with the undersigned's advisors before executing this agreement.
The undersigned employee acknowledges that he or she has received a copy of the Plan and has read, understands and is familiar with the terms and provisions of the Plan. The undersigned employee further acknowledges that (1) the undersigned is waiving any right to a jury trial in the event of any dispute arising out of or related to the Plan and (2) except as otherwise established in an employment agreement between the Company and the undersigned, the employment relationship between the undersigned and the Company is an “at-will” relationship.
Executed on ____________________________________

 

 

		
	PARTICIPANT
	FINISAR CORPORATION

	 
	 

	 
	 

	 
	By:

	Signature
	 

	 
	 

	 
	 

	 
	Title:

	Name Printed
	 

	 
	 

	Address
	 

	 
	 

	 
	 

	 
	 

 
 

 

 

EXHIBIT B
FORMS OF
GENERAL RELEASE OF CLAIMS
 

 

 

GENERAL RELEASE OF CLAIMS
[AGE 40 AND OVER]
This Agreement is by and between [EMPLOYEE NAME] (“Employee”) and [FINISAR CORPORATION OR SUCCESSOR THAT AGREES TO ASSUME THE EXECUTIVE RETENTION AND SEVERANCE PLAN FOLLOWING A CHANGE IN CONTROL] (the “Company”). This Agreement will become effective on the eighth (8th) day after it is signed by Employee (the “Effective Date”), provided that the Company has signed this Agreement and Employee has not revoked this Agreement (by written notice to [COMPANY CONTACT NAME] at the Company) prior to that date.
RECITALS
1.Employee was employed by the Company as of                     ,         .
2.Employee and the Company entered into an Agreement to Participate in the Finisar Corporation Executive Retention and Severance Plan (such agreement and plan being referred to herein as the “Plan”) effective as of                   ,           wherein Employee is entitled to receive certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan), provided Employee signs and does not revoke a Release (as defined by the Plan).
3.A Change in Control (as defined by the Plan) has occurred as a result of [BRIEFLY DESCRIBE CHANGE IN CONTROL]
4.Employee's employment is being terminated as a result of a Termination Upon a Change in Control. Employee's last day of work and termination are effective as of                     ,          .  Employee desires to receive the payments and benefits provided by the Plan by executing this Release.
NOW, THEREFORE, the parties agree as follows:
Commencing on the Effective Date, the Company shall provide Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the Company's obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued, unused vacation that Employee earned during his or her employment with the Company.
Employee and Employee's successors release the Company, its respective subsidiaries, stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever directly related to Employee's employment by the Company or the termination of such employment and occurring or existing at any time up to and including the Effective Date, including, but not limited to, any claims of breach of written contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress, or national origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to Section 5.4 of the Plan or pursuant to a Prior Indemnity Agreement (as such term is defined by the Plan).
Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State of California, which states in full:
A general release does not extend to claims which the creditor does not  

 

 

know or suspect to exist in his favor at the time of executing the release,  which if known by him must have materially affected his settlement with the  debtor.
Employee waives any rights that Employee has or may have under Section 1542 and comparable or similar provisions of the laws of other states in the United States to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all known and unknown claims that he or she has or may have against the parties listed above.
Employee and the Company acknowledge and agree that they shall continue to be bound by and comply with the terms and obligations under the following agreements: (i) any proprietary rights or confidentiality agreements between the Company and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee is a party, and (iv) any stock option, stock grant or stock purchase agreements between the Company and Employee.
This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives.
The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement shall be subject to the provisions of Section 12 and Section 13 of the Plan.
The parties agree that any and all disputes that (i) do not arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described shall be resolved by means of a court trial conducted by the superior or district court in Santa Clara County, California. The parties hereby irrevocably waive their respective rights to have any such disputes tried to a jury, and the parties hereby agree that such courts will have personal and subject matter jurisdiction over all such disputes. Notwithstanding the foregoing, in the event of any such dispute, the parties may agree to mediate or arbitrate the dispute on such terms and conditions as may be agreed in writing by the parties. The prevailing party shall be entitled to recover from the losing party its attorneys' fees and costs incurred in any action brought to resolve any such dispute.
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral, with the exception of any agreements described in paragraph 4 of this Agreement. This Agreement may not be modified or amended except by a document signed by an authorized officer of the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.
EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO 45 DAYS TO CONSIDER THIS AGREEMENT, THAT EMPLOYEE MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS AFTER EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY 

 

 

IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.
		
	 
	 

	Dated:
	 

	 
	[Employee Name]

	 
	 

	 
	 

	 
	[Company]

	 
	 

	 
	 

	Dated:
	By:

 
DB2/22198714.2 

 

 

EXHIBIT C
FORMS OF
GENERAL RELEASE OF CLAIMS
[Under Age 40]

 

 

GENERAL RELEASE OF CLAIMS
[UNDER AGE 40]
This Agreement is by and between [EMPLOYEE NAME] (“Employee”) and [FINISAR CORPORATION OR SUCCESSOR THAT AGREES TO ASSUME THE EXECUTIVE RETENTION AND SEVERANCE PLAN FOLLOWING A CHANGE IN CONTROL] (the “Company”). This Agreement is effective on the day it is signed by Employee (the “Effective Date”).
RECITALS
Employee was employed by the Company as of                     ,           .
5.Employee and the Company entered into an Agreement to Participate in the Finisar Corporation Executive Retention and Severance Plan (such agreement and plan being referred to herein as the “Plan”) effective as of                     ,             wherein Employee is entitled to receive certain benefits in the event of a Termination Upon a Change in Control (as defined by the Plan), provided Employee signs a Release (as defined by the Plan).
6.A Change in Control (as defined by the Plan) has occurred as a result of [BRIEFLY DESCRIBE CHANGE IN CONTROL].
7.Employee's employment is being terminated as a result of a Termination Upon a Change in Control. Employee's last day of work and termination are effective as of                     ,            (the “Termination Date”). Employee desires to receive the payments and benefits provided by the Plan by executing this Release.
NOW, THEREFORE, the parties agree as follows:
8.Commencing on the Effective Date, the Company shall provide Employee with the applicable payments and benefits set forth in the Plan in accordance with the terms of the Plan. Employee acknowledges that the payments and benefits made pursuant to this paragraph are made in full satisfaction of the Company's obligations under the Plan. Employee further acknowledges that Employee has been paid all wages and accrued, unused vacation that Employee earned during his or her employment with the Company.
9.Employee and Employee's successors release the Company, its respective subsidiaries, stockholders, investors, directors, officers, employees, agents, attorneys, insurers, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Employee now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever directly related to Employee's employment by the Company or the termination of such employment and occurring or existing at any time up to and including the Termination Date, including, but not limited to, any claims of breach of written contract, wrongful termination, retaliation, fraud, defamation, infliction of emotional distress, or national origin, race, age, sex, sexual orientation, disability or other discrimination or harassment under the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the Americans with Disabilities Act, the Fair Employment and Housing Act or any other applicable law. Notwithstanding the foregoing, this release shall not apply to any right of the Employee pursuant to Sections 5.4 of the Plan or pursuant to a Prior Indemnity Agreement (as such terms are defined by the Plan).
10.Employee acknowledges that he or she has read Section 1542 of the Civil Code of the State of California, which states in full:
A general release does not extend to claims which the creditor does  not 

 

 

know or suspect to exist in his favor at the time of executing the  release, which if known by him must have materially affected his  settlement with the debtor.
Employee waives any rights that Employee has or may have under Section 1542 and comparable or similar provisions of the laws of other states in the United States to the full extent that he or she may lawfully waive such rights pertaining to this general release of claims, and affirms that Employee is releasing all known and unknown claims that he or she has or may have against the parties listed above.
11.Employee and the Company acknowledge and agree that they shall continue to be bound by and comply with the terms and his obligations under the following agreements: (i) any proprietary rights or confidentiality agreements between the Company and Employee, (ii) the Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to which Employee is a party, and (iv) any stock option, stock grant or stock purchase agreements between the Company and Employee.
12.This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives.
13.The parties agree that any and all disputes that both (i) arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement or the interpretation of the terms of this Agreement shall be subject to the provisions of Section 12 and Section 13 of the Plan.
14.The parties agree that any and all disputes that (i) do not arise out of the Plan, the interpretation, validity or enforceability of the Plan or the alleged breach thereof and (ii) relate to the enforceability of this Agreement, the interpretation of the terms of this Agreement or any of the matters herein released or herein described shall be resolved by means of a court trial conducted by the superior or district court in Santa Clara County, California. The parties hereby irrevocably waive their respective rights to have any such disputes tried to a jury, and the parties hereby agree that such courts will have personal and subject matter jurisdiction over all such disputes. Notwithstanding the foregoing, in the event of any such dispute, the parties may agree to mediate or arbitrate the dispute on such terms and conditions as may be agreed in writing by the parties. The prevailing party shall be entitled to recover from the losing party its attorneys' fees and costs incurred in any action brought to resolve any such dispute.
15.This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements, whether written or oral, with the exception of any agreements described in paragraph 4 of this Agreement. This Agreement may not be modified or amended except by a document signed by an authorized officer of the Company and Employee. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.
EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.

 

 

		
	 
	 

	Dated:
	 

	 
	[Employee Name]

	 
	 

	 
	 

	 
	[Company]

	 
	 

	 
	 

	Dated:
	By:

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