Exhibit 10.13

 

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July 10, 2003

 

Mr. Doug Hall

 

OFFER OF EMPLOYMENT

 

Dear Doug:

 

In anticipation of the closing of the transaction between Avanex and Corning
Incorporated, I am very pleased to extend to you this offer of employment to
join Avanex (the “Company”), effective on the date on which we close this
transaction.

 

The position offered to you is that of Vice President – Avanex, Erwin Park. Your
place of work will be at the Company’s offices in Erwin Park, New York and you
will report to Walter Alessandrini, Chairman, CEO and President. 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 monthly rate of $18,333.33 per month,
paid in accordance with the Company’s payroll procedures and subject to
applicable tax withholding. (This represents an equivalent annual rate of pay of
$220,000.00). Your base salary includes an increase over your most recent base
salary paid by Corning; this increase is provided to offset, in part, the
Corning Goal-sharing Program for which you were eligible.

 

From the Closing Date until the last Corning payroll period of calendar year
2003 you will continue to be paid monthly. Beginning January 1, 2004, we plan to
pay you bi-weekly at the corresponding bi-weekly rate, according to the
Company’s payroll schedule. The first and last payment by the Company to you
will be adjusted, if necessary, to reflect a commencement or termination date
other than the first or last working day of a pay period.

 

Incentive Compensation Plan: As an Avanex employee, you will participate in the
Avanex Incentive Compensation Plan. In combination with your base salary, this
Incentive Compensation Plan is intended to provide you with total compensation
opportunities that meet or

 

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Offer of Employment

July 10, 2003

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exceed the compensation opportunities you received at Corning. We will provide
the details of the Incentive Compensation Plan soon after you begin your
employment with us. In general, the plan is based upon overall corporate goals,
and offers the opportunity to earn up to 40% of your base salary as incentive
compensation.

 

Stock Options: Following the transaction close date, you will be granted a stock
option under the Company’s 1998 Stock Plan (the “Plan”) to purchase 150,000
shares of the Company’s Common Stock at an exercise price equal to the current
fair market value on the date of grant, as determined under the Plan (the
“Option”). The shares subject to the Option shall vest as follows:

 

  1. 12/48th of the shares subject to the Option shall vest twelve (12) months
after the date of commencement of employment and 1/48th of the shares subject to
the Option shall vest monthly thereafter, so that the Option shall be fully
vested and exercisable four (4) years from the date of commencement of
employment, subject to your continued service to the Company on the relevant
vesting dates.

 

  2. If Avanex terminates your employment for any reason except good cause
during the first twelve (12) months after your employment begins, your options
will be treated as having vested beginning with the first full month of
employment at the rate of 1/48th per month, and ending on the day of your
termination. For this purpose, “good 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.

 

  3. If you terminate your employment with Avanex for any reason during the
first twelve (12) months after your employment begins, no shares subject to your
Option will have vested and you will not be entitled to exercise any portion of
your Option.

 

  4. The acceleration of vesting and post-termination periods of exercisability
of your Option will be substantially comparable to those that are contained in
the standard form of option agreement generally applicable to Avanex’s other
vice presidents.

 

  5. In all other respects, the Option shall be subject to the terms,
definitions and provisions of the Plan and the stock option agreement by and
between you and the Company.

 

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Offer of Employment

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Benefits: As a regular employee, your health and welfare benefits will continue
through the Corning health and welfare benefits plans until the end of the
calendar year (i.e., December 31, 2003), with the exception of retiree benefits,
based upon the elections you currently have on file with Corning. By signing
below, you acknowledge and agree that your contributions (if any) to these
benefit programs should continue to be deducted from your pay through the end of
the 2003 calendar year.

 

In addition, through December 31, 2003 you will continue to be reimbursed for
certain benefits expenses, as you have been in the past at Corning. Further,
your deductions for Medical and Dependent Care Flex Spending Accounts (FSA) will
continue (according to your current elections on file with Corning) until
December 31, 2003.

 

As previously communicated by Corning’s Compensation and Benefits group, you
have the opportunity to submit claims for reimbursement until March 31, 2004 for
eligible expenses incurred while you were contributing.

 

At the beginning of 2004, you will be eligible to participate in Avanex’s
benefit plans, in accordance with the terms of those plans, which are being
enhanced and renegotiated with insurance carriers at present. At that time, the
health and welfare benefits provided by Corning will no longer be available. You
will have the opportunity to enroll into Avanex’s plans prior to the end of
2003. We will provide the details of these benefit offerings as soon as they are
finalized following the Closing Date.

 

Lastly, after the Closing Date, you will have the opportunity to enroll in the
Avanex 1999 Employee Stock Purchase Plan (ESPP) and the Avanex 401(k) Plan,
subject to your continued employment with Avanex on the applicable enrollment
dates.

 

Service Credit. As an employee of Avanex, you will receive credit for years of
service you had with Corning for purposes of determining eligibility and benefit
accrual under the benefit plans, programs, policies or other arrangements that
you are eligible to participate in during your employment with Avanex (except
that service will not be credited for purposes of benefit accruals under a
defined benefit type plan if such a plan is ever adopted by Avanex).

 

Severance. In the event that you are involuntarily terminated within two (2)
years following the Closing Date, you may be eligible for severance benefits in
an aggregate amount that is equal to or greater than the severance benefits you
would have received if you were involuntarily terminated from Corning prior to
the Closing Date

 

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Offer of Employment

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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 us 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 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 patent rights to any
invention made during your employment at Avanex and non-disclosure of
proprietary information.

 

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

 

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Offer of Employment

July 10, 2003

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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, if any.

 

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.

 

Governing Law: This letter shall be governed by the internal substantive laws,
but not the choice of law rules, of the State of California. 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.

 

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.

 

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Offer of Employment

July 10, 2003

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Doug, 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 that
you will become part of the Avanex team. Together, we are committed to
unleashing the power of the optical network, and making Avanex a stronger and
stronger player in the industry.

 

Sincerely,

/s/    WALTER ALESSANDRINI         Walter Alessandrini Chairman, CEO and
President

 

Accepted:    /s/    DOUG HALL           Date:     

 

Enclosures

Duplicate Offer Letter

Employment, Confidential Information, and Invention Assignment Agreement

Arbitration Agreement