Exhibit 10.4

 

[AVANEX LETTERHEAD]

 

November 22, 2004

 

Mr. Syrus Madavi

 

Dear Syrus:

 

I am very pleased to extend to you this offer of employment to join Avanex (the
“Company”), effective November 22, 2004 (the “Effective Date”). The position
offered to you is that of Chairman of the Company.

 

The specifics of this offer are as follows:

 

Base Salary: As of the Effective Date, you will be paid an annual salary of
$180,000 as compensation for your services (the “Base Salary”). The Base Salary
will be paid bi-weekly, subject to the usual, required withholding.

 

Board Membership: At the appropriate annual meetings of the Company’s
stockholders, the Company will nominate you for re-election as a member of the
Board. Your service as a member of the Board will be subject to any required
stockholder approval.

 

Stock Options: On November 10, 2004, you were granted a stock option to purchase
500,000 shares of our common stock (the “Initial Option”). The terms of the
Initial Option shall be set forth in the stock option agreement, dated November
10, 2004, between you and the Company (the “Stock Option Agreement”) including
the following: (i) the Initial Option will have a per share exercise price equal
to the per share “Fair Market Value” (as defined in our 1998 Stock Plan, the
“Plan”) on the date of grant, (ii) the Initial Option will vest as to 1/24th of
the covered shares each month following the date of grant, subject to your
continuing status as a “Service Provider” (as defined in the Plan) through each
vesting date (the “Initial Option Vesting Schedule”), and (iii) the Initial
Option will have a maximum ten-year term from the date of the grant. The Initial
Option will be exercisable (to the extent vested) by you and/or your spouse,
heirs and assignees throughout such ten-year term. The Initial Option is
transferable by you to your immediate family members and to trusts for the
benefit of such immediate family members so long as such transferee agrees to
the limitations set forth in the Stock Option Agreement. The Initial Option and
the underlying shares will be covered by an effective registration statement
(such as a Form S-8) filed with the Securities and Exchange Commission (to the
extent reasonably available to the Company). 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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Mr. Madavi

November 22, 2004

Page 2

 

Benefits: During your employment with the Company, you will be eligible to
participate in accordance with the terms of all Company employee benefit plans,
policies, and arrangements that are applicable to other senior executives of the
Company, as such plans, policies, and arrangements may exist from time to time.
The Company shall pay to you an amount equal to the employee contribution
portion of any premium payment due for Company sponsored medical, dental or
vision care health plans in which you enroll, including a gross-up amount to
cover all applicable personal withholding taxes. You shall be responsible for
the cost of all other employee contributions (including the amount of any
co-payments under the Company’s health plans) that are required under the
Company’s employee benefit plans, policies and arrangements.

 

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
us, you will not engage in any other employment, occupation, consulting or other
business activity directly in conflict with the business in which the Company is
now involved with or becomes involved with during the term of your employment.

 

Employment, Confidential Information, and Invention Assignment Agreement: You
agree to execute the Company’s Employment, Confidential Information, and
Invention Assignment Agreement (the “Confidential Information Agreement”).
During the Employment Term, you agree to execute any updated versions of the
Company’s standard form of Employment, Confidential Information, and Invention
Assignment Agreement (any such updated version also referred to as the
“Confidential Information Agreement”) as may be required of substantially all of
the Company’s executive officers.

 

Indemnification Agreement: You will be covered under the Company’s insurance
policies and, subject to applicable law, will be provided indemnification to the
maximum extent permitted by the Company’s bylaws and Certificate of
Incorporation, with such insurance coverage and indemnification to be in
accordance with the Company’s standard practices for senior executive officers
but on terms no less favorable than provided to any other Company senior
executive officer or director.

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Mr. Madavi

November 22, 2004

Page 3

 

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, 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 Agreement will be governed by the laws of the State of
California (with the exception of its conflict of laws provisions).

 

Severability: If any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable, or void, this Agreement
will continue in full force and effect without said 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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Mr. Madavi

November 22, 2004

Page 4

 

Syrus, 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

    

By:

 

/s/ JOE S. MAJOR

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Title:

 

President and CEO

    

Accepted:

 

/s/ S.P. MADAVI

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Date: Nov. 22 2004

SYRUS MADAVI

    

 

Enclosures

 

Duplicate Offer Letter

Employment, Confidential Information, and Invention Assignment Agreement

Arbitration Agreement

Indemnification Agreement