Exhibit 10.5
AVANEX CORPORATION
1999 DIRECTOR OPTION
PLAN
(as amended and restated
effective November 3, 2006*)
1.
Purposes of the Plan . The purposes of
this 1999 Director Option Plan are to attract and retain the best
available personnel for service as Outside Directors (as defined
herein) of the Company, to provide additional incentive to the
Outside Directors of the Company to serve as Directors, and to
encourage their continued service on the Board.
All options granted hereunder shall
be nonstatutory stock options. Restricted Stock Units may also be
granted under the Plan.
2. Definitions . As used
herein, the following definitions shall apply:
(a) “ Award ”
means, individually or collectively, a grant under the Plan of
Options or Restricted Stock Units.
(b) “ Award Agreement
” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the
Plan. The Award Agreement is subject to the terms and conditions of
the Plan.
(c) “ Awarded Stock
” means the Common Stock subject to an Award.
(d) “ Beneficial Owner
” shall mean a “beneficial owner” (as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of the Company
representing 1% or more of the total voting power represented by
the Company’s outstanding voting securities on the date of
any grant hereunder.
(e) “ Board ”
means the Board of Directors of the Company.
(f) “ Change of Control
” means the occurrence of any of the following
events:
(i) Any “person” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company’s
then outstanding voting securities who is not already such as of
the Effective Date; or
(ii) The consummation of the sale or
disposition by the Company of all or substantially all the
Company’s assets; or
(iii) The consummation of a merger
or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining out-standing or by
being converted into voting securities of the surviving entity or
its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such
merger or consolidation; or
(iv) A change in the composition of
the Board occurring within a two-year period, as a result of which
fewer than a majority of the directors are Incumbent Directors.
“Incumbent Directors” shall mean directors who either
(A) are directors of the Company as of the Effective Date, or
(B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of those directors
whose election or nomination was not in connection with any
transaction described in subsections (i), (ii), or
(iii) above, or in connection with an actual or threatened
proxy contest relating to the election of directors to the Company.
Notwithstanding the foregoing, in no event shall the initial public
offering of the Company’s securities pursuant to a
registration statement filed under Section 12 of the Exchange
Act constitute a Change of Control.
(g) “ Code ”
means the Internal Revenue Code of 1986, as amended.
(h) “ Common Stock
” means the common stock of the Company or, in the case of
certain Restricted Stock Units, the cash equivalent
thereof.
(i) “ Company ”
means Avanex Corporation, a Delaware corporation.
(j) “ Director ”
means a member of the Board.
(k) “ Disability
” means total and permanent disability as defined in section
22(e)(3) of the Code.
(l) “ Employee ”
means any person, including officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. The payment of
a Director’s fee by the Company shall not be sufficient in
and of itself to constitute “employment” by the
Company.
(m) “ Exchange Act
” means the Securities Exchange Act of 1934, as
amended.
(n) “ Fair Market Value
” means, as of any date, the value of Common Stock determined
as follows:
(i) If the Common Stock is listed on
any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange
or system for the last market trading day prior to the time of
determination as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is
regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices
for the Common Stock for the last market trading day prior to the
time of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable;
or
(iii) In the absence of an
established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Board.
(o) “ Inside Director
” means a Director who is an Employee.
(p) “ Option ”
means a stock option granted pursuant to the Plan.
(q) “ Optionee ”
means a Director who holds an Option.
|
*
|
Following the
close of market on August 12, 2008, Avanex Corporation effected a
fifteen-for-one reverse stock split of its common stock.
Accordingly, each fifteen shares of issued and outstanding Avanex
common stock and equivalents as of the close of market on August
12, 2008 was converted into one share of common stock, and the
reverse stock split was reflected in the trading price of
Avanex’s common stock at the opening of market on August 13,
2008. All share amounts and per share prices appearing in this 1999
Director Option Plan reflect the reverse stock split.
|
(r) “ Outside Director
” means a Director who is not an Employee and who is not
the Beneficial Owner.
(s) “ Parent ”
means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(t) “ Participant
” means a Director who holds of an outstanding Award granted
under the Plan.
(u) “ Plan ”
means this 1999 Director Option Plan, as it may be amended from
time to time.
(v) “ Restricted Stock
Unit ” means a bookkeeping entry representing an amount
equal to the Fair Market Value of one Share, granted pursuant to
the Plan Each (and therefore shall be the equivalent of one Share
for purposes of determining the number of Shares subject to an
Award). Each Restricted Stock Unit represents an unfunded and
unsecured obligation of the Company.
(w) “ Share ”
means a share of the Common Stock, as adjusted in accordance with
Section 10 of the Plan.
(x) “ Subsidiary
” means a “subsidiary corporation,” whether now
or hereafter existing, as defined in Section 424(f) of the
Internal Revenue Code of 1986.
3.
Stock Subject to the Plan . Subject
to the provisions of Section 10 of the Plan, the maximum
aggregate number of Shares which may be awarded and sold under the
Plan is 20,000 Shares (the “Pool”), plus an annual
increase to be added on the first day of the Company’s fiscal
year beginning on January 1, 2001, equal to the lesser of
(i) 10,000 shares, (ii) 1
/
4 of 1% of the outstanding shares
on such date or (iii) a lesser amount determined by the Board.
The Shares may be authorized, but unissued, or reacquired Common
Stock.
If an Award expires or becomes
unexercisable without having been exercised in full, or, with
respect to Restricted Stock Units, is forfeited back to or
repurchased by the Company, the unpurchased, forfeited or
repurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan
has terminated). Shares that have actually been issued under the
Plan shall not be returned to the Plan and shall not become
available for future distribution under the Plan.
4. Administration and Grants
of Awards under the Plan .
(a) Procedure for Grants
. All grants of Awards to Outside Directors under this Plan
shall be automatic and nondiscretionary and shall be made strictly
in accordance with the following provisions:
(i) No person shall have any
discretion to select which Outside Directors shall be granted
Awards or to determine the number of Shares to be covered by
Awards.
(ii) Each Outside Director shall be
automatically granted an Option to purchase 5,333 Shares (the
“First Option”) on the date on which the later of the
following events occurs: (A) the effective date of this Plan,
as determined in accordance with Section 6 hereof, or
(B) the date on which such person first becomes an Outside
Director, whether through election by the shareholders of the
Company or appointment by the Board to fill a vacancy; provided,
however, that an Inside Director or Beneficial Owner who ceases to
be an Inside Director or Beneficial Owner but who remains a
Director shall not receive a First Option.
(iii) Each Outside Director shall be
automatically granted an Option to purchase 1,333 Shares (a
“Subsequent Option”) on the date of the Company’s
annual stockholder’s meeting each year provided he or she is
then an Outside Director and if as of such date, he or she shall
have served on the Board for at least the preceding six
(6) months.
(iv) Notwithstanding the provisions
of subsections (ii) and (iii) hereof, any exercise of an
Option granted before the Company has obtained shareholder approval
of the Plan in accordance with Section 16 hereof shall be
conditioned upon obtaining such shareholder approval of the Plan in
accordance with Section 16 hereof.
(v) The terms of a First Option
granted hereunder shall be as follows:
(1) the term of the First Option
shall be ten (10) years.
(2) the First Option shall be
exercisable only while the Outside Director remains a Director of
the Company, except as set forth in Sections 8 and 10
hereof.
(3) the exercise price per Share
shall be 100% of the Fair Market Value per Share on the date of
grant of the First Option.
(4) subject to Section 10
hereof, the First Option shall vest and become exercisable as to
twenty-five percent (25%) of the Shares subject to the First
Option on each anniversary of its date of grant, provided that the
Optionee co
