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Kelley Gets 1.1M Reasons to Stay

McData is willing to put up nearly $4 million to make sure CEO John Kelley and five other executives stick around until the Brocade deal closes.

Under terms of a retention plan McData disclosed today in a SEC filing, Kelley will receive more than $1.1 million if he remains with the company through completion of the acquisition. COO Todd Oseth is eligible for $740,000, CFO Scott Berman $568,750, engineering senior VP Michael Frendo $495,000, chief legal officer Thomas McGimpsey $495,000, and sales SVP Adrian Jones $410,000.

Brocade disclosed Aug. 8 that it planned to acquire its Fibre Channel switch rival in a stock deal worth $713 million. Brocade has said it expects the deal to close by the end of January. (See Brocade Bags McData For $713M.)

With closing a good three months away, financial analysts believe the retention package is an attempt by the companies to assure McData customers and shareholders of the two firms that there will be an orderly transition.

"This means Brocade thinks they need these six guys to pull off the merger," says an insider with knowledge of the two companies. "They're saying 'Hey, don't get a job just yet,' and they're offering to make it worth their while to wait before finding a new job."

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