EXHIBIT 10.21

 

September 20, 2005

 

Mr. Tony Riley

 

OFFER OF EMPLOYMENT

 

Dear Tony:

 

I am very pleased to extend to you this offer of employment to join Avanex (the
“Company”).

 

The position offered to you is that of Acting Chief Financial Officer. Your
place of work will be at the Company’s offices in Fremont, California and you
will report to Jo Major, President and CEO. This is a full-time, regular, exempt
position of considerable responsibility, integral to our continued business
development and success. In this position you will be expected to devote your
full business time, attention and energies to the performance of your duties
with the Company.

 

The specifics of this offer are as follows:

 

Base Salary: You will be compensated at a bi-weekly rate of $10,000.00, paid
every other Friday, subject to the usual, required withholding in accordance
with the Company’s normal payroll procedures. (This represents an equivalent
annual rate of pay of $260,000.00).

 

Annual Bonus: You will be eligible to participate in the Executive Bonus Plan
for FiscalYear 2006, in accordance with the guidelines as established by the
Compensation Committee of the Board. Under this plan your annual target bonus
amount will be 60% of your base salary.

 

Stock Options: Subject to approval by the Compensation Committee of the Board of
Directors, you will be granted a stock option under the Company’s 1998 Stock
Plan (the “Plan”) to purchase 350,000 shares of the Company’s Common Stock at an
exercise price equal to the then current fair market value on the date of grant,
as determined under the Plan (the “Option”).

 

Employment Terms:

 

  •   In the event that Mr. Riley’s employment is terminated without cause
within six (6) months of the date of commencement of employment, he shall be
entitled to receive restricted stock units for each month of employment with a
value of $10,000 per month of employment.

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Offer of Employment

Page 2

 

  •   In the event that Mr. Riley’s employment is terminated without cause
following six (6) months of the date of commencement of employment, he shall be
entitled to receive severance according to the Company’s standard severance
policy for vice presidents of the company.

 

  •   For this purpose, “cause” is defined as (1) any act of personal dishonesty
taken by you in connection with your responsibilities as an employee and
intended to result in your substantial personal enrichment, (2) your conviction
of a felony that is injurious to Avanex, or (3) a willful act by you that
constitutes gross misconduct and which is injurious to Avanex.

 

  •   The vesting, change in control and acceleration of vesting and
post-termination periods of exercisability for the Option will be determined by
the Company’s standard policies under the 1998 Stock Plan and stock option
agreement between you and the Company, both of which documents are incorporated
by reference.

 

Start Date: September 20, 2005 upon acceptance of this offer.

 

Benefits: As a regular employee, you will be eligible to participate in Avanex’s
benefits plans and programs available to U.S. full time employees, in accordance
with the terms of those plans.

 

At-Will Employment: You should be aware that your employment with the Company
constitutes “at-will” employment. This means that your employment relationship
with the Company may be terminated at any time with or without notice, with or
without good cause or for any or no cause, at either party’s option. You
understand and agree that neither your job performance nor promotions,
commendations, bonuses or the like from the Company give rise to or in any way
serve as the basis for modification, amendment, or extension, by implication or
otherwise, of your at-will employment with the Company.

 

Conflict of Interest: You agree that, during the term of your employment with
the Company, you will not engage in any other employment, occupation, consulting
or other business activity directly related to the business in which the Company
is now involved or becomes involved during the term of your employment, nor will
you engage in any other activities that conflict with your obligations to the
Company.

 

In accepting this offer, you are representing to the Company that (a) you are
not a party to any employment agreement or other contract or arrangement which
prohibits your full-time employment with the Company, (b) you do not know of any
conflict which would restrict your

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Offer of Employment

Page 3

 

employment with the Company and (c) you have not and will not bring with you to
your employment with the Company any documents, records or other confidential
information belonging to former employers. We ask that, if you have not already
done so, you disclose to the Company any and all agreements relating to your
prior employment that may affect your eligibility to be employed by the Company
or limit the manner in which you may be employed.

 

Employment, Confidential Information, and Invention Assignment Agreement: As a
condition of your employment with the Company, you must sign and comply with an
Employment, Confidential Information, and Invention Assignment Agreement which
requires, among other provisions, the assignment of rights to any invention made
during your employment at Avanex and non-disclosure of proprietary information.
As a Company employee, you will be required to sign an acknowledgment that you
have read and understand the Company policies and procedures (as set forth on
the Company’s Outlook “Public Files” system or other similar electronic system
that the Company may designate), and you will be expected to abide by all
Company policies and procedures.

 

Indemnification Agreement: The Company will offer you the opportunity to become
a party to its standard form of indemnification agreement for officers and
directors.

 

Arbitration Agreement: As a condition of your employment, you are also required
to sign and comply with an Arbitration Agreement. Among other provisions, the
Arbitration Agreement provides that in the event of certain disputes or claims
relating to or arising out of our employment relationship, you and the Company
agree that (i) those disputes between you and the Company shall be fully and
finally resolved by binding arbitration, (ii) you are waiving any and all rights
to have such disputes resolved in court by a judge or jury; (iii) the arbitrator
shall have the power to award any remedies available under applicable law,
except attorneys’ fees and costs, which can be awarded to the prevailing party
only if authorized by statute or contract, (iv) such disputes shall be resolved
by a neutral arbitrator, and (v) the Company shall pay for any administrative or
hearing fees charged by the arbitrator. Please note that we must receive your
signed Arbitration Agreement before your first day of employment.

 

Reference and Background Checks: The Company reserves the right to conduct
reference checks and/or background investigations on all of its potential
employees. Your job offer, therefore, is contingent upon a clearance of such a
reference check and/or background investigation.

 

I-9 Employment Eligibility Verification: For purposes of federal immigration
law, you will be required to provide to the Company documentary evidence of your
identity and eligibility for employment in the United States. Such documentation
must be provided to us within three (3) business days of your date of hire, or
our employment relationship with you may be terminated.

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Offer of Employment

Page 4

 

Governing Law: The internal substantive laws, but not the choice of law rules,
of the State of California, shall govern this letter. You hereby agree to
exclusive personal jurisdiction and venue in the state and federal courts of the
state of California.

 

Severability: In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable, or void, this
letter shall continue in full force and effect without such provision.

 

General: This letter, along with the other aforementioned employment-related
agreements and stock option described above, set forth the terms of your
employment with the Company and supersede in their entirety any and all prior
agreements and understandings concerning your employment relationship with the
Company, whether written or oral. The terms of this letter may only be amended,
canceled or discharged in writing signed by an authorized representative of the
Company and by you.

 

We would appreciate a response to this offer no later than September 20, 2005.
To indicate your acceptance of this offer, please sign and date this letter in
the space provided below and return it to Human Resources. A duplicate original
is enclosed for your records.

 

Tony, it is a pleasure extending this offer to you. We are hopeful that you
recognize, as we do, the tremendous opportunity we have ahead of us and we
welcome you to the Avanex team.

 

Sincerely,

AVANEX CORPORATION

/s/ JO MAJOR

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Jo Major

President and CEO

 

Accepted:   

/s/ A. A. Riley

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   Date: 9/20/05

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Offer of Employment

Page 5

 

Enclosures

Duplicate Offer Letter

Employment, Confidential Information, and Invention Assignment Agreement

Indemnification Agreement

Arbitration Agreement