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EXHIBIT 10.8.7
AVANEX CORPORATION
1998 STOCK PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
Unless otherwise defined herein, the terms defined in the 1998 Stock Plan
shall have the same defined meanings in this Restricted Stock Purchase Agreement
(the "Agreement").
I. NOTICE OF GRANT OF STOCK PURCHASE RIGHT
XXXXXXX XXXXXXXX
You have been granted the right to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Agreement, as follows:
Date of Grant November 19, 1999
Vesting Commencement Date: November 15, 1999
Exercise Price Per Share $3.50
Total Number of Shares Subject 130,000
to This Stock Purchase Right
Total Exercise Price: $455,000.00
Expiration Date February 18, 2000
YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION DATE OR
IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES.
Non-Transferability of Stock Purchase Right.
This Stock Purchase Right may not be transferred in any manner otherwise
than by will or by the laws of descent or distribution and may be exercised
during the lifetime of Optionee only by Optionee. The terms of the Plan and this
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
II. AGREEMENT
1. Sale of Stock. The Company hereby agrees to sell to the individual named
in the Notice of Grant of Stock Purchase Right (the "Purchaser"), and the
Purchaser hereby agrees to purchase the number of Shares set forth in the Notice
of Grant of Stock Purchase Right, at the
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exercise price per share set forth in the Notice of Grant of Stock Purchase
Right (the "Exercise Price"), and subject to the terms and conditions of the
Plan, which is incorporated herein by reference. Subject to 14(c) of the Plan,
in the event of a conflict between the terms and conditions of the Plan and this
Agreement, the terms and conditions of the Plan shall prevail.
2. Payment of Purchase Price. Purchaser herewith delivers to the Company
the aggregate Exercise Price for the Shares by cash or check or promissory note
in the form of Exhibit C secured by the shares pursuant to a Security Agreement
in the form of Exhibit D.
3. Purchaser's Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Stock
Purchase Right is exercised, the Optionee shall, if required by the Company,
concurrently with the exercise of all or any portion of this Stock Purchase
Right, deliver to the Company his or her Investment Representation Statement in
the form attached hereto as Exhibit B.
4. Repurchase Option.
(a) In the event the Purchaser's continuous status as a Service
Provider terminates for any or no reason (including death or Disability), the
Company shall, upon the date of such termination (as reasonably fixed and
determined by the Company), have an irrevocable, exclusive option for a period
of ninety (90) days from such date to repurchase up to that number of shares
which constitute the Unreleased Shares (as defined in Section 5) at the Exercise
Price per share (the "Repurchase Price") (the "Repurchase Option").
(b) The Repurchase Option shall be exercised by the Company by
delivering written notice to the Purchaser or the Purchaser's executor (with a
copy to the Escrow Holder (as defined in Section 7)) AND, at the Company's
option, (i) by delivering to the Purchaser or the Purchaser's executor a check
in the amount of the aggregate Repurchase Price, or (ii) by the Company
canceling an amount of the Purchaser's indebtedness to the Company equal to the
aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so that
the combined payment and cancellation of indebtedness equals such aggregate
Repurchase Price. Upon delivery of such notice and the payment of the aggregate
Repurchase Price in any of the ways described above, the Company shall become
the legal and beneficial owner of the Unreleased Shares being repurchased and
all rights and interests therein or relating thereto, and the Company shall have
the right to retain and transfer to its own name the number of Unreleased Shares
being repurchased by the Company.
(c) Whenever the Company shall have the right to repurchase the
Unreleased Shares hereunder, the Company may designate and assign one or more
employees, officers, directors or shareholders of the Company or other persons
or organizations to exercise all or a part of the Company's Repurchase Option to
purchase all or a part of the Unreleased Shares. If the Fair Market Value of the
Unreleased Shares to be repurchased on the date of such designation or
assignment (the "Repurchase FMV") exceeds the aggregate Repurchase Price of the
Unreleased Shares, then each
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such designee or assignee shall pay the Company cash equal to the difference
between the Repurchase FMV and the aggregate Repurchase Price of Unreleased
Shares to be purchased.
(d) If the Company or its assignee does not elect to exercise the
Repurchase Option conferred above by giving the requisite notice within ninety
(90) days following Purchaser's termination as a Service Provider, the
Repurchase Option shall terminate.
5. Release of Shares From Repurchase Option.
(a) As of the date of this Agreement, all of the Shares shall be
subject to the Company's Repurchase Option. The Shares shall be released from
the Repurchase Option as follows:
(i) One quarter (1/4) of the Shares shall be released from the
Repurchase Option on November 14, 2000; and
(ii) One forty-eighth (1/48) shall be released from the
Repurchase Option each full calendar month elapsing thereafter during all of
which Purchaser was a full time employee of the Company.
(b) Any of the Shares which, from time to time, have not yet been
released from the Repurchase Option are referred to herein as "Unreleased
Shares."
(c) The Shares which have been released from the Repurchase Option
shall be delivered to the Purchaser at the Purchaser's request (see Section 7).
(d) Notwithstanding the foregoing, upon a Change of Control, as
defined below, for any reason that occurs while Purchaser is an employee of the
Company, that number of Unreleased Shares, if any, which, when aggregated with
any Shares previously released from the Repurchase Option, are required to equal
fifty percent (50%) of the Shares shall be released from the Repurchase Option
on the date the event constituting a Change of Control is consummated. The
balance of the Shares subject to the Repurchase Option shall continue to be
released from the Repurchase Option 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 where 25% of Purchaser's Shares
have been released from the Company's Purchase Option, then an additional 25% of
the Shares shall be released from the Purchase Option pursuant hereto. The
remaining 50% of the Shares 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
Purchaser's Shares have already been released from the Company's Purchase
Option, then no additional Shares shall be released from the Purchase Option.
For the purposes of the foregoing, a Change of Control shall mean the
occurrence of any of the following events:
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(i) 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 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;
(ii) the direct or indirect sale or exchange by the shareholders
of the Company of all or substantially all of the stock of the Company;
(iii) a merger or consolidation in which the Company is a party
and in which the shareholders 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
(iv) the sale or disposition by the Company of all or
substantially all the Company's assets.
(e) Acceleration Upon Termination of Employment. In addition to the
Shares released from the Company's Repurchase Option pursuant to Section 4(d)
above, in the event the Purchaser's employment terminates as a result of an
Involuntary Termination other than for Cause upon or within 12 months after a
Change of Control, all Unreleased Shares shall be released from the Company's
Purchase Option upon the date of such termination.
For the purposes of this Section 5(e), the following terms
referred to in this Agreement shall have the following meanings:
(i) Cause. "Cause" shall mean (i) any act of personal dishonesty
taken by the Purchaser in connection with his responsibilities as an employee
and intended to result in substantial personal enrichment of the Purchaser, (ii)
conviction of a felony that is injurious to the Company, and (iii) a willful act
by the Purchaser which constitutes gross misconduct and which is injurious to
the Company.
(ii) Disability. "Disability" shall mean that the Purchaser 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 Purchaser or the
Purchaser's legal representative (such agreement as to acceptability not to be
unreasonably withheld).
(iii) Involuntary Termination. "Involuntary Termination" shall
mean (i) without the Purchaser's express written consent, the significant
reduction of the Purchaser's duties or responsibilities relative to the
Purchaser's duties or responsibilities in effect immediately prior to such
reduction; provided, however, that a reduction in duties or responsibilities
solely by virtue of
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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
Purchaser's express written consent, a substantial reduction, without good
business reasons, of the facilities and perquisites (including office space and
location) available to the Purchaser immediately prior to such reduction; (iii)
without the Purchaser's express written consent, a material reduction by the
Company in the base compensation of the Purchaser as in effect immediately prior
to such reduction, or the ineligibility of the Purchaser 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
Purchaser is entitled immediately prior to such reduction with the result that
the Purchaser's overall benefits package is significantly reduced; (v) the
relocation of the Purchaser to a facility or a location more than 50 miles from
the Purchaser's then present location, without the Purchaser's express written
consent; (vi) any purported termination of the Purchaser 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 4(f) below.
(f) The Shares which have been released from the Company's
Repurchase Option shall be delivered to the Purchaser at the Purchaser's
request.
6. Restriction on Transfer. Except for the escrow described in Section 7
or transfer of the Shares to the Company or its assignees contemplated by this
Agreement, none of the Shares or any beneficial interest therein shall be
transferred, encumbered or otherwise disposed of in any way until the release of
such Shares from the Company's Repurchase Option in accordance with the
provisions of this Agreement, other than by will or the laws of descent and
distribution.
7. Escrow of Shares.
(a) To ensure the availability for delivery of the Purchaser's
Unreleased Shares upon exercise of the Repurchase Option by the Company, the
Purchaser shall, upon execution of this Agreement, deliver and deposit with an
escrow holder designated by the Company (the "Escrow Holder") the share
certificates representing the Unreleased Shares, together with the Assignment
Separate from Certificate (the "Stock Assignment") duly endorsed in blank,
attached hereto as Exhibit A-1. The Unreleased Shares and Stock Assignment shall
be held by the Escrow Holder, pursuant to the Joint Escrow Instructions of the
Company and Purchaser attached as Exhibit A-2 hereto, until such time as the
Company's Repurchase Option expires. As a further condition to the Company's
obligations under this Agreement, the spouse of Purchaser, if any, shall execute
and deliver to the Company the Consent of Spouse attached hereto as Exhibit A-3.
(b) The Escrow Holder shall not be liable for any act it may do
or omit to do with respect to holding the Unreleased Shares in escrow and while
acting in good faith and in the exercise
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of its judgment and the Company shall hold Escrow Holder harmless from any and
all such liability, including attorney's fees and other expenses of defending
against the assertion of any such claim.
(c) If the Company or any assignee exercises its Repurchase
Option hereunder, the Escrow Holder, upon receipt of written notice of such
option exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.
(d) When the Repurchase Option has been exercised or expires
unexercised or a portion of the Shares has been released from such Repurchase
Option, upon Purchaser's request the Escrow Holder shall promptly cause a new
certificate to be issued for such released Shares and shall deliver such
certificate to the Company or the Purchaser, as the case may be.
(e) Subject to the terms hereof, the Purchaser shall have all the
rights of a shareholder with respect to such Shares while they are held in
escrow, including without limitation, the right to vote the Shares and receive
any cash dividends declared thereon. If, from time to time during the term of
the Company's Repurchase Option, there is (i) any stock dividend, stock split or
other change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of the Purchaser's ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and included thereafter as
"Shares" for purposes of this Agreement and the Company's Repurchase Option.
8. Company's Right of First Refusal. Before any Shares held by Purchaser or
any transferee (either being sometimes referred to herein as the "Holder") may
be sold or otherwise transferred (including transfer by gift or operation of
law), the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this (the "Right of
First Refusal").
(a) Notice of Proposed Transfer. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares
at the Offered Price to the Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty (30)
days after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.
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(c) Purchase Price. The purchase price ("Purchase Price") for the
Shares purchased by the Company or its assignee(s) under this Section shall be
(i) the Offered Price in the case of Shares that are not Unreleased Shares, or
(ii) in the case of Shares that are Unreleased Shares, the lower of the Offered
Price or the Repurchase Price as defined in Section 4(a) hereof. If the Offered
Price includes consideration other than cash, the cash equivalent value of the
non-cash consideration shall be determined by the Board of Directors of the
Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), (i) by cash or check, (ii) by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or (iii) by any combination thereof within thirty (30) days after receipt of the
Notice or in the manner and at the times set forth in the Notice.
(e) Xxxxxx's Right to Transfer. If all of the Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within one hundred twenty (120) days after the date of the Notice
and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this Section shall continue to apply to
the Shares in the hands of such Proposed Transferee. If the Shares described in
the Notice are not transferred to the Proposed Transferee within such period, a
new Notice shall be given to the Company, and the Company and/or its assignees
shall again be offered the Right of First Refusal before any Shares held by the
Holder may be sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the contrary
contained in this Section notwithstanding, the transfer of any or all of the
Shares during the Purchaser's lifetime or on the Purchaser's death by will or
intestacy to the Purchaser's immediate family or a trust for the benefit of the
Purchaser's immediate family shall be exempt from the provisions of this
Section, provided that the Purchaser notifies the Company in writing within
thirty (30) days of said transfer. "Immediate Family" as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Agreement, including but not
limited to this Section and Section 4, and there shall be no further transfer of
such Shares except in accordance with the terms of this Section.
(g) Termination of Right of First Refusal. The Right of First Refusal
shall terminate as to any Shares upon the date of the first sale of Common Stock
of the Company to the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission under the
1933 Act.
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9. Restrictive Legends; Stop-Transfer Orders; Refusal to Transfer.
(a) Purchaser understands and agrees that the Company shall cause the
legends set forth below or legends substantially equivalent thereto, to be
placed upon any certificate(s) evidencing ownership of the Shares together with
any other legends that may be required by the Company or by applicable state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, A RIGHT OF FIRST REFUSAL, AND A REPURCHASE
OPTION HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT
OF FIRST REFUSAL AND REPURCHASE OPTION ARE BINDING ON TRANSFEREES OF
THESE SHARES.
(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
10. Lock-Up Period. Purchaser hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Purchaser shall not sell or otherwise transfer
any Shares or other securities of the Company during the 180-day
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period (or such other period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the "Market Standoff
Period") following the effective date of a registration statement of the Company
filed under the Securities Act. Such restriction shall apply only to the first
registration statement of the Company to become effective under the Securities
Act that includes securities to be sold on behalf of the Company to the public
in an underwritten public offering under the Securities Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such Market Standoff Period.
11. Tax Consequences. Set forth below is a brief summary as of the date of
grant of this Stock Purchase Right of some of the federal tax consequences of
exercise of this Stock Purchase Right and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE.
(a) Exercise of Stock Purchase Right. Generally, no income will be
recognized by Purchaser in connection with the exercise of the stock purchaser
right for shares subject to the Repurchase Option, unless an election under
Section 83(b) of the Code is filed with the Internal Revenue Service within 30
days of the date of exercise of the right to purchase stock. The form for making
this election is attached as Exhibit A-4 hereto. Otherwise, as the Company's
repurchase right lapses, Purchaser will recognize compensation income in an
amount equal to the difference between the Fair Market Value of the stock at the
time the Company's repurchase right lapses and the amount paid for the stock, if
any (the "Spread"). If Purchaser is an Employee or former Employee, the Spread
will be subject to tax withholding by the Company, and the Company will be
entitled to a tax deduction in the amount at the time the Purchaser recognizes
ordinary income with respect to a Stock Purchase Right.
(b) Disposition of Shares. Upon disposition of the Shares, any gain or
loss is treated as capital gain or loss. If the Shares are held 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. Long-term capital gains
are grouped and netted by holding periods. Net capital gains on assets held for
more than 12 months is capped at 20%. Capital losses are allowed in full against
capital gains, and up to $3,000 against other income.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF
THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.
12. No Guarantee of Continued Service. PURCHASER ACKNOWLEDGES AND AGREES
THAT THE RELEASE OF SHARES FROM THE REPURCHASE OPTION OF THE COMPANY PURSUANT TO
SECTION 5 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS SERVICE PROVIDER AT THE
WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES
HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
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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 PURCHASER'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
PURCHASER'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
13. Notices. Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the
other in writing.
Any notice to the Escrow Holder shall be sent to the Company's address with
a copy to the other party not sending the notice.
14. No Waiver. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party from thereafter
enforcing each and every other provision of this Agreement. The rights granted
both parties herein are cumulative and shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.
15. Successors and Assigns. The Company may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Purchaser and his or her heirs, executors, administrators, successors and
assigns.
16. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Purchaser or by the Company forthwith to the
Administrator which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Administrator shall be final and binding on
all parties.
17. Governing Law; Severability. This Agreement is governed by the internal
substantive laws but not the choice of law rules, of California.
18. Entire Agreement. The Plan is incorporated herein by reference. This
Agreement (including the exhibits referenced herein), the Plan, and the
Investment Representation Statement 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.
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By Xxxxxxxxx's signature below, Purchaser represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Purchaser has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Purchaser further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant of Stock Purchase Right.
PURCHASER: AVANEX CORPORATION
/s/ XXXXXXX X. XXXXXXXX By: /s/ XXXXX XXXX
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Signature
XXXXXXX X. XXXXXXXX Title: CFO
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Print Name
Date: November 19, 1999
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EXHIBIT A-1
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, Xxxxxxx Xxxxxxxx, hereby sell, assign and transfer
unto _________________________ (__________) shares of the Common Stock of Avanex
Corporation standing in my name of the books of said corporation represented by
Certificate No. _____ herewith and do hereby irrevocably constitute and appoint
____________________________ to transfer the said stock on the books of the
within named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between Avanex Corporation and the undersigned dated
November 19, 1999.
Dated: _______________, _____ Signature: /s/ XXXXXXX XXXXXXXX
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INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
Repurchase Option as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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EXHIBIT A-2
JOINT ESCROW INSTRUCTIONS
November 19, 1999
Corporate Secretary
Avanex Corporation
00000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Dear Sirs:
As Escrow Agent for both Avanex Corporation, a California corporation (the
"Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Purchase
Agreement ("Agreement") between the Company and the undersigned, in accordance
with the following instructions:
1. In the event the Company and/or any assignee of the Company (referred to
collectively for convenience herein as the "Company") exercises the Company's
repurchase option set forth in the Agreement (the "Repurchase Option"), the
Company shall give to Purchaser and you a written notice specifying the number
of shares of stock to be purchased, the purchase price, and the time for a
closing hereunder at the principal office of the Company. Purchaser and the
Company hereby irrevocably authorize and direct you to close the transaction
contemplated by such notice in accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's Repurchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a shareholder of the Company while the
stock is held by you.
14
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's Repurchase Option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's Repurchase Option.
Within ninety (90) days after cessation of Purchaser's continuous employment by
or services to the Company, or any parent or subsidiary of the Company, you will
deliver to Purchaser a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not purchased by
the Company or its assignees pursuant to exercise of the Company's Repurchase
Option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked only
by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree, you shall not
be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other experts as
you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
2
15
12. Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer or agent of the Company or if you shall resign by
written notice to each party. In the event of any such termination, the Company
shall appoint a successor Xxxxxx Agent.
13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
(10) days' advance written notice to each of the other parties hereto.
COMPANY: Avanex Corporation
00000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
PURCHASER: Xxxxxxx Xxxxxxxx
_____________________
_____________________
ESCROW AGENT: Corporate Secretary
Avanex Corporation
00000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
16. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.
18. The Restricted Stock Purchase Agreement is incorporated herein by
reference. These Joint Escrow Instructions, the 1998 Stock Plan, and the
Restricted Stock Purchase Agreement (including the exhibits referenced therein)
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 Escrow Agent, the Purchaser and the Company with respect
3
16
to the subject matter hereof, and may not be modified except by means of a
writing signed by the Escrow Agent, the Purchaser and the Company.
19. These Joint Escrow Instructions shall be governed by, and construed and
enforced in accordance with, the laws of the State of California.
Very truly yours,
AVANEX CORPORATION
By: /s/ XXXXX XXXX
------------------------------------
Title: CFO
----------------------------------
PURCHASER
/s/ XXXXXXX X. XXXXXXXX
----------------------------------------
(Signature)
Xxxxxxx X. Xxxxxxxx
----------------------------------------
(Typed or Printed Name)
ESCROW AGENT:
/s/ XXXXXX X. X'XXXXX
----------------------------------------
Corporate Secretary
4
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EXHIBIT A-3
CONSENT OF SPOUSE
I, _________________________, spouse of Xxxxxxx Xxxxxxxx, have read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement"). In
consideration of granting of the right to my spouse to purchase shares of Avanex
Corporation, as set forth in the Agreement, I hereby appoint my spouse as my
attorney-in-fact in respect to the exercise of any rights under the Agreement
and agree to be bound by the provisions of the Agreement insofar as I may have
any rights in said Agreement or any shares issued pursuant thereto under the
community property laws or similar laws relating to marital property in effect
in the state of our residence as of the date of the signing of the foregoing
Agreement.
Dated: _______________, 1999 Signature: /s/ XXXX XXXXXXXX
--------------------------
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EXHIBIT A-4
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Internal Revenue Code of
1986, to include in his gross income for the current taxable year, the amount of
any compensation taxable to him in connection with his receipt of the property
described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
TAXPAYER SPOUSE
-------- ------
NAME: Xxxxxxx Xxxxxxxx
---------------------------------------- --------------------------------------
ADDRESS: 00 XXXXXXXXXX XXXXXX XXXXXXXXXX XX 00000
---------------------------------------- --------------------------------------
IDENTIFICATION NO.
---------------------------------------- --------------------------------------
TAXABLE YEAR: 1999 1999
---------------------------------------- --------------------------------------
2. The property with respect to which the election is made is described as
follows:
3. The date on which the property was transferred is: ________ shares of
Common Stock of Avanex Corporation
4. The property is subject to the following restrictions:
The Shares may not be transferred and are subject to forfeiture under the
terms of an agreement between the taxpayer and the Company. These
restrictions lapse upon the satisfaction of certain conditions contained in
such agreement.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is: $__________.
6. The amount (if any) paid for such property: $__________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated: November 19, 1999 /s/ XXXXXXX XXXXXXXX
----------------- ----------------------------------------
Taxpayer Signature
The undersigned spouse of taxpayer joins in this election.
Dated: November 19, 1999 /s/ XXXX X. XXXXXXXX
----------------- ----------------------------------------
Spouse of Taxpayer Signature
6
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: XXXXXXX XXXXXXXX
COMPANY: AVANEX CORPORATION
SECURITY: COMMON STOCK
AMOUNT: 130,000 SHARES
DATE: NOVEMBER 19, 1999
In connection with the purchase of the above-listed Securities, the
undersigned Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to
(b) reach an informed and knowledgeable decision to acquire the Securities.
Purchaser is acquiring these Securities for investment for Purchaser's own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").
(c) Purchaser acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein. In this connection, Purchaser understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Purchaser's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one (1) year or any other fixed period in the future. Purchaser
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser further acknowledges and understands that
the Company is under no obligation to register the Securities.
(d) Purchaser is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. Rule 701 provides that if the issuer qualifies under Rule
701 at the time of the grant of the Stock Purchase Right to the Purchaser, the
exercise will be exempt from registration under the Securities Act. In the event
the Company becomes subject to the reporting
20
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter (or such longer period as any market stand-off
agreement may require) the Securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and, in the case of
an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three (3) month
period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time
of grant of the Stock Purchase Right, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one (1) year after the later of the
date the Securities were sold by the Company or the date the Securities were
sold by an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two (2) years, the satisfaction of
the conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(e) Purchaser further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Purchaser understands that no assurances can be given that
any such other registration exemption will be available in such event.
Signature of Purchaser:
/s/ XXXXXXX XXXXXXXX
----------------------------------------
Date: ________________, ____
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21
SECURITY AGREEMENT
This Security Agreement is made as of November 19, 1999 between Avanex
Corporation ("Pledgee"), Xxxxxxx Xxxxxxxx ("Pledgor") and the Secretary of
Pledgee as "Pledgeholder."
Recitals
A. Pledgor has incurred payment obligations (the "Payment
Obligations") to Pledgee set forth in a Promissory Note of even date herewith.
B. Pledgor desires to provide a security interest in all of the
Pledgor's shares of Common
Stock of the Pledgee, all options, and similar rights to acquire such
capital stock or interests, and all rights to receive profits or surplus or
other dividends or distributions from the Pledgee to its shareholders, in each
case whether now owned or existing or hereafter acquired or arising, wherever
located, together with all substitutions, replacements, (the "Shares") to secure
performance by Pledgor of the Payment Obligations, all as more specifically set
forth in this Pledge Agreement.
NOW, THEREFORE, it is agreed as follows:
(1) Creation and Description of Security Interest. In consideration of the
transfer of the Shares to Pledgor under the Stock Purchase Agreement (the
"Agreement"), Pledgor, pursuant to the California Commercial Code, hereby
pledges all of such Shares (herein sometimes referred to as the "Collateral")
represented by certificate number __, duly endorsed in blank or with executed
stock powers, and herewith delivers said certificate to the Secretary of Pledgee
("Pledgeholder"), who shall hold said certificate subject to the terms and
conditions of this Security Agreement.
The pledged stock (together with an executed blank stock assignment
for use in transferring all or a portion of the Shares to Pledgee if, as and
when required pursuant to this Security Agreement) shall be held by the
Pledgeholder as security for the repayment of the Note, and any extensions or
renewals thereof, to be executed by Pledgor pursuant to the terms of the
Agreement, and the Pledgeholder shall not encumber or dispose of such Shares
except in accordance with the provisions of this Security Agreement.
22
(2) Pledgor's Representations and Covenants. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
(a) Payment of Indebtedness. Pledgor will pay the principal sum of the
Note secured hereby, together with interest thereon, at the time and
in the manner provided in the Note.
(b) Encumbrances. The Shares are free of all other encumbrances,
defenses and liens, and Pledgor will not further encumber the Shares
without the prior written consent of Pledgee.
(c) Margin Regulations. In the event that Pledgee's Common Stock is
now or later becomes margin-listed by the Federal Reserve Board and
Pledgee is classified as a "lender" within the meaning of the
regulations under Part 207 of Title 12 of the Code of Federal
Regulations ("Regulation G"), Pledgor agrees to cooperate with Pledgee
in making any amendments to the Note or providing any additional
collateral as may be necessary to comply with such regulations.
(3) Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
(4) Stock Adjustments. In the event that during the term of the pledge any
stock dividend, reclassification, readjustment or other changes are declared or
made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
(5) Options and Rights. In the event that, during the term of this pledge,
subscription Options or other rights or options shall be issued in connection
with the pledged Shares, such rights, Options and options shall be the property
of Pledgor and, if exercised by Pledgor, all new stock or other securities so
acquired by Pledgor as it relates to the pledged Shares then held by
Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
-2-
23
(6) Default. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
a. Payment of principal or interest on the Note shall be delinquent
for a period of 10 days or more; or
b. Pledgor fails to perform any of the covenants set forth in the
Agreement or contained in this Security Agreement for a period of 10 days after
written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the California
Commercial Code.
(7) Release of Collateral. Subject to any applicable contrary rules under
Regulation G, there shall be released from this pledge a portion of the pledged
Shares held by Pledgeholder hereunder upon payments of the principal of the
Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
(8) Withdrawal or Substitution of Collateral. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
(9) Term. The within pledge of Shares shall continue until the payment of
all indebtedness secured hereby, at which time the remaining pledged stock shall
be promptly delivered to Pledgor, subject to the provisions for prior release of
a portion of the Collateral as provided in paragraph 7 above.
(10) Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Xxxxxxx makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
(11) Pledgeholder Liability. In the absence of willful or gross negligence,
Pledgeholder shall not be liable to any party for any of his acts, or omissions
to act, as Pledgeholder.
(12) Invalidity of Particular Provisions. Pledgor and Pledgee agree that
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
(13) Successors or Assigns. Pledgor and Pledgee agree that all of the terms
of this Security Agreement shall be binding on their respective successors and
assigns, and that the term
-3-
24
"Pledgor" and the term "Pledgee" as used herein shall be deemed to include, for
all purposes, the respective designees, successors, assigns, heirs, executors
and administrators.
(14) Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"PLEDGOR" By: /s/ XXXXXXX XXXXXXXX
-------------------------------------
Address:
"PLEDGEE" Avanex Corporation
By: /s/ XXXXX XXXX
------------------------------------
Xxxxx Xxxx, Chief Financial Officer
"PLEDGEHOLDER" /s/ XXXXXX X. X'XXXXX
----------------------------------------
Secretary of Avanex Corporation
-4-
25
PROMISSORY NOTE
$455,000.00 NOVEMBER 19, 1999
FOR VALUE RECEIVED, Xxxxxxx Xxxxxxxx ("Borrower") promises to pay to Avanex
Corporation (the "Company"), or order, the principal sum of Four Hundred
Fifty-Five Thousand and 00/100 dollars, together with interest on the unpaid
principal hereof from the date hereof at the rate of 5.99% per annum, compounded
semiannually.
Principal and interest shall be due and payable on November 19, 2004.
Should the undersigned fail to make full payment of principal or interest for a
period of 10 days or more after the due date thereof, the whole unpaid balance
on this Note of principal and interest shall become immediately due at the
option of the holder of this Note. Payments of principal and interest shall be
made in lawful money of the United States of America.
The undersigned may at any time prepay all or any portion of the principal
or interest owing hereunder.
This Note is subject to the terms of the Stock Purchase Agreement between
Borrower and the Company and dated as of November 19, 1999. This Note is secured
in part by a pledge of the Company's Common Stock under the terms of a Security
Agreement of even date herewith and is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the undersigned,
and shall not be required to proceed against the collateral securing this Note
in the event of default.
In the event the undersigned shall cease to be an employee or consultant of
the Company for any reason, this Note shall, at the option of the Company, be
accelerated, and the whole unpaid balance on this Note of principal and accrued
interest shall be due and payable thirty days after the date of such
termination.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
/s/ XXXXXXX XXXXXXXX
----------------------------------------
Xxxxxxx Xxxxxxxx
