FORM OF STOCK OPTION AGREEMENT
BETWEEN AVANEX AND CERTAIN OF ITS EXECUTIVE OFFICERS
Unless
otherwise defined herein, the terms defined in the 1998 Stock Plan,
as amended (the “Plan”) shall have the same defined
meanings in this Option Agreement.
I. NOTICE
OF STOCK OPTION GRANT
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:
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[___]
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Vesting
Commencement Date
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[___]
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$[___]
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Total Number of
Shares Granted
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[___]
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$[___]
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___Incentive
Stock Option
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___Nonstatutory
Stock Option
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[___]
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Exercise and
Vesting Schedule:
Subject to
accelerated vesting as set forth below, this Option may be
exercised, in whole or in part, in accordance to the following
vesting schedule:
25% of the
Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/48 of the Shares subject to the
Option shall vest each month thereafter on the same day of the
month as the Vesting Commencement Date, subject to the Optionee
continuing to be a Service Provider on such dates.
Acceleration
Upon a Change of Control . Notwithstanding the foregoing, upon a Change
of Control, as defined below, that occurs while Optionee provides
services to the Company, this Option shall become vested and
exercisable as to fifty percent (50%) of the shares subject to this
Option on the date the event constituting a Change of Control is
consummated. The balance of the shares subject to this Option shall
continue to vest on the same schedule (i.e., the same number of
shares shall vest each month) as existed prior to the Change of
Control. For example, if a Change of Control occurs on a date when
25% of Optionee’s shares have vested, then an additional 25%
of the shares shall be vested pursuant to this paragraph. The
remaining 50% of the shares subject to this Option shall vest at
the rate of 1/48th of the shares per month thereafter, such that
all shares are fully vested after an additional 24-month period. If
a Change of Control occurs on a date where more than 50% of
Optionee’s shares have already vested, then no additional
Shares shall vest pursuant to this paragraph.
Acceleration
Upon a Change of Control and Termination of Employment
. Notwithstanding the foregoing, in
the event the Optionee’s employment with the Company
terminates as a result of an Involuntary Termination other than for
Cause upon or within 12 months after a Change of Control, this
Option shall be fully (i.e. 100%) vested and this Option may be
exercised, in whole or in part, upon the date of such
termination.
Acceleration
Following Involuntary Termination without Cause
. Notwithstanding the foregoing, in
the event the Optionee’s employment with the Company
terminates as a result of an Involuntary Termination without Cause
upon or within 12 months after the commencement of
Optionee’s employment with the Company, but prior to a Change
of Control, this Option shall vest as to 1/48th of the Shares
subject to the Option for each full month from the Vesting
Commencement Date until the date of Optionee’s Involuntary
Termination.
The following
terms referred to in this Agreement shall have the following
meanings:
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(i)
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Cause. “Cause” shall
mean (i) any act of personal dishonesty taken by the Optionee
in connection with his responsibilities as an employee and intended
to result in substantial personal enrichment of the Optionee,
(ii) conviction of a felony that is injurious to the Company,
and (iii) a willful act by the Optionee which constitutes
gross misconduct and which is injurious to the Company.
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(ii)
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Change of Control. “Change of
Control” shall mean the occurrence of any of the following
events:
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Any
“person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or
becomes the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the
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Company representing 50% or more of
the total voting power represented by the Company’s then
outstanding voting securities other than in a private financing
transaction approved by the Board of Directors;
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the
direct or indirect sale or exchange by the stockholders of the
Company of all or substantially all of the stock of the
Company;
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a
merger or consolidation in which the Company is a party and in
which the stockholders of the Company before such merger or
consolidation do not retain, directly or indirectly, at a least
majority of the beneficial interest in the voting stock of the
Company after such transaction; or
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the
sale or disposition by the Company of all or substantially all the
Company’s assets.
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(iii)
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Disability. “Disability”
shall mean that the Optionee has been unable to substantially
perform his duties as the result of his incapacity due to physical
or mental illness, and such inability, at least 26 weeks after
its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
the Optionee or the Optionee’s legal representative (such
agreement as to acceptability not to be unreasonably
withheld).
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(iv)
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Involuntary Termination.
“Involuntary Termination” shall mean (i) without
the Optionee’s express written consent, the significant
reduction of the Optionee’s duties or responsibilities
relative to the Optionee’s duties or responsibilities in
effect immediately prior to such reduction; provided, however, that
a reduction in duties or responsibilities solely by virtue of the
Company being acquired and made part of a larger entity (as, for
example, when the Chief Financial Officer of Company remains as
such following a Change of Control and is not made the Chief
Financial Officer of the acquiring corporation) shall not
constitute an “Involuntary Termination”;
(ii) without the Optionee’s express written consent, a
substantial reduction, without good business reasons, of the
facilities and perquisites (including office space and location)
available to the Optionee immediately prior to such reduction;
(iii) without the Optionee’s express written consent, a
material reduction by the Company in the base compensation of the
Optionee as in effect immediately prior to such reduction, or the
ineligibility of the Optionee to continue to participate in any
long-term incentive plan of the Company; (iv) a material
reduction by the Company in the kind or level of employee benefits
to which the Optionee is entitled immediately prior to such
reduction with the result that the Optionee’s overall
benefits package is significantly reduced; (v) the relocation of
the Optionee to a facility or a location more than 50 miles from
the Optionee’s then present location, without the
Optionee’s express written consent; (vi) any purported
termination of the Optionee by the Company which is not effected
for death or Disability or for Cause, or any purported termination
for which the grounds relied upon are not valid; or (vii) the
failure of the Company to obtain the assumption of this agreement
by any successors contemplated in Section I.(ii)
above.
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This Option may
be exercised for three months after Optionee ceases to be a Service
Provider. Upon the death or Disability of the Optionee, this Option
may be exercised for twelve months after Optionee ceases to be a
Service Provider. In no event shall this Option be exercised later
than the Term/Expiration Date as provided above.
In addition,
upon an Involuntary Termination of the Optionee’s employment
other than for Cause upon or within 12 months after a Change
of Control, this Option may be exercised for twenty-four months
after Optionee ceases to be a Service Provider.
The Plan
Administrator of the Company hereby grants to the Optionee named in
the
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