Document:

Offer of Employment between the Registrant and Syrus P. Madavi

 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. 

 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. 

 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. 

 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

	  	 
	 Title:
	 	 President and CEO
	  	 
			
	 Accepted:
	 	 /s/ S.P. MADAVI

	  	 Date: Nov. 22 2004

	 SYRUS MADAVI
	  	 

  
 Enclosures 
  
 Duplicate Offer Letter 
 Employment, Confidential Information, and Invention Assignment Agreement 
 Arbitration Agreement 
 Indemnification AgreementForm of Stock Option Agreement

 Exhibit 10.5 
  
 AVANEX CORPORATION 
  
 1998 STOCK PLAN 
  
 STOCK OPTION AGREEMENT 
  
 Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 
  
 I. NOTICE OF STOCK OPTION GRANT 
  
 [OPTIONEE] 
  
 [OPTIONEE’S ADDRESS] 
  
 You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as
follows: 
  

			
	 Date of Grant
	  	 ________
  

	 Vesting Commencement Date
	  	 ________
  

	 Exercise Price per Share
	  	 $_______
  

	 Total Number of Shares Granted
	  	 ________shares
  

	 Total Exercise Price
	  	 $________
  

	 Type of Option:
	  	 Incentive / Nonstatutory Stock Option
  

	 Term/Expiration Date:
	  	 ________[Ten Years]

  
 Vesting
Schedule: 
  
 This Option may be exercised, in whole or in
part, in accordance with the following schedule: 
  
 1/24th of the Shares subject to the Option shall vest on the same date of each month after the Vesting
Commencement Date provided that the Shares will actually vest on any such date only if the Optionee remains a Service Provider through such date. 

 Termination Period: 
  
 This Option may be exercised by the Optionee or his assignees, and in the event of his death, by his spouse or heirs,
through the Term/Expiration Date. In no event shall this Option be exercised later than the Term/Expiration Date as provided above. 
  
 II. AGREEMENT 
  
 A. Grant of Option. 
  
 The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant attached as Part I of this Agreement (the
“Optionee”) an option (the “Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject to Section 15(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail. 
  
 B. Exercise of
Option. 
  
 (a) Right to Exercise. This Option is
exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement. 
  
 (b) Method of Exercise. This Option is exercisable by the terms and conditions set forth by Company policy. The
exercise may be facilitated by one of the Company’s captive brokers. In such case the broker will facilitate the exercise by providing notification of exercise of the option, the number of Shares in respect of which the Option is being
exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The exercise must be accompanied by payment of the aggregate Exercise Price as to
all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of notification of exercise by one of the Company’s pre-selected captive brokers and accompanied by such aggregate Exercise Price. 
  
 No Shares shall be issued pursuant to the exercise of this Option unless such
issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Exercised Shares.

  

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 C. Method of Payment. 
  
 Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the
Optionee: 
  
 1. cash; or 
  
 2. check; or 
  
 3. consideration received by the Company under a cashless exercise program implemented by the Company in connection with the
Plan; or 
  
 4. surrender of other Shares which (i) in the case of
Shares acquired upon exercise of an option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.  
  
 D. Transferability of Option.

  
 This Option may be assigned by the Optionee to his immediate
family members and to a trust for the benefit of such immediate family members. In addition, the Option may be transferred by will or by the laws of descent or distribution and may be exercised by the Optionee and his assignees, and upon his death,
by the Optionee’s spouse or heirs. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 E. Term of Option. 
  
 This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Option Agreement. 
  
 F. Tax
Consequences. 
  
 Some of the federal tax consequences
relating to this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES. 
  
 G. Exercising the Option.

  
 1. Nonstatutory Stock Option. The Optionee may incur
regular federal income tax liability upon exercise of a NSO. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in 

  

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cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise. 
  
 2. Disposition of Shares. If the Optionee holds NSO Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. 
  
 H. Entire Agreement; Governing Law. 
  
 The Plan is incorporated herein by reference. The Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may
not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California. 
  
 I. NO GUARANTEE OF CONTINUED SERVICE. 
  
 OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
  

 -4- 

 By your signature and the signature of the Company’s representative below, you and the Company agree
that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Option Agreement and fully understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  

			
	OPTIONEE:	 	 AVANEX CORPORATION

	  
  

	 	  

	 Signature
	 	 By

	  
  

	 	  
  

	 Print Name
	 	 Title

	  
  

	 	 
	 Residence Address
	 	 
	  
  

	 	 

  

 -5- 

 EXHIBIT A 
  
 AVANEX CORPORATION 
  
 1998 STOCK PLAN 
  
 EXERCISE NOTICE 
  
 Avanex Corporation 
 40919 Encyclopedia Circle 
 Fremont, CA 94538 
  
 Attention: General Counsel 
  
 1. Exercise of Option. Effective as of today,
                    , or his respective heirs or assigns, the undersigned (“Purchaser”) hereby elects to purchase
                     shares (the “Shares”) of the Common Stock of Avanex Corporation (the “Company”) under and pursuant to
the 1998 Stock Plan (the “Plan”) and the Stock Option Agreement dated,                      (the “Option Agreement”). The
purchase price for the Shares shall be $        , as required by the Option Agreement. 
  
 2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price for the Shares. 
  
 3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
  
 4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 13 of the Plan. 
  
 5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of
the Shares and that Purchaser is not relying on the Company for any tax advice. 

 6. Entire Agreement; Governing Law. The Plan and Option Agreement are incorporated herein by
reference. This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser
with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the
choice of law rules, of California. 
  

			
	 Submitted by:
	  	 Accepted by:

		
	 PURCHASER:
	  	 AVANEX CORPORATION

	  

	  	  

	 Signature
	  	 By

	  
  

	  	  
  

	 Print Name
	  	 Its

	 	  	 
	 Address:
	  	 Address:

		
	  

	  	 AVANEX CORPORATION

		
	  

	  	 40919 Encyclopedia Circle
 Fremont, CA 94538

		
	 	  	  

	 	  	 Date Received

  

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