EXHIBIT 10.5
D:\xxxxxx.doc
May 26, 1998
Xx. Xxxxxx X. Xxxxxxx
[Address]
Dear Xxxx,
E-Tek Dynamics (the "Company") is very pleased to offer you a position as
Vice President of Engineering with responsibility for the Company's research,
development and engineering, on the terms set forth in this letter agreement,
effective upon your acceptance by execution of a counterpart copy of this letter
where indicated below.
1. Reporting Duties and Responsibilities: Employment at Will. In this position
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you will report to the President and Chief Executive Officer of the
Company. This letter is for a full time position, located at the offices of
the Company, except as reasonable travel to other locations may be
necessary to fulfill your responsibilities. Your employment with the
Company is on an "at will" basis, and either you or the Company may
terminate your employment with the Company at any time, for any or no
reason.
2. Severance Payments upon Termination. If the Company terminates your
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employment (i) for any reason other than Cause; or (ii) you resign for
"Good Reason", (A) the Company will pay you an agreed upon severance in an
amount equal to your then base salary for the lesser of (i) twelve months;
or (ii) the number of months before you obtain a position with another firm
and (B) the vesting for all options held by you shall be accelerated by
twelve months as of such termination of employment.
"Cause" shall mean (i) gross negligence or willful misconduct in the
performance of duties to the Company after one written warning detailing
the concerns and offering you opportunities to cure; (ii) material and
willful violation of any federal or state law; (iii) commission of any act
of fraud with respect to the Company; (iv) commission of a felony or a
crime causing material harm to the standing and reputation of the Company;
or (v) intentional and improper disclosure of the Company's confidential or
proprietary information.
Resignation for "Good Reason" shall occur if you voluntarily resign from
employment because of (i) a material adverse change in your position with
the Company which materially reduces your responsibility, without Cause and
without your written consent; (ii) a material reduction in your
compensation without your written consent; or (iii) a relocation of your
place of employment outside of the seven (7) Bay Area counties, without
your written consent.
Xxxxxx X. Xxxxxxx
May 26, 1998
Page 2 of 4
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You agree that the payments set forth in this offer letter constitute all
payments that you shall be entitled to, and under any theory, in the event
of any termination of employment.
3. Salary; Bonus; Benefits and Vacation. Your initial and minimum base salary
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will be $13,333 per month, subject to annual review in good faith by the
Company's President and Chief Executive Officer, payable in accordance with
the Company's customary payroll practice as in effect from time to time.
You will also be eligible to earn an annual target bonus in the amount of
30% of your salary ($48,000) based on the achievement of certain
engineering, business and financial objectives that you and the Company's
President and Chief Executive Officer will mutually determine in good
faith. The objectives for your first year will be determined promptly after
your acceptance of this letter; objectives for future years will be
determined promptly after the beginning of each fiscal year of the Company.
You will also receive the Company's standard employee benefits package
(including directors' and officers' insurance and medical and life
insurance), and will be subject to the Company's vacation policy, as such
package and policy are in effect from time to time.
4. Relocation & Signing Bonus. You will receive a signing bonus of $50,000
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payable within thirty (30) days of your first month of employment. This
bonus will be the full and entire compensation for temporary living
expenses, flights and any and all relocation expenses. Our offer, & this
bonus, is based on your permanent relocation to the San Xxxx area in
California within nine (9) months.
5. Stock Option. You will be granted a stock option, subject to Board
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approval, to purchase up to 250,000 shares of the Company Common Stock
pursuant to the Company's Stock Option Plan. The option will have an
exercise price equal to the then-current fair market value of the Company
Common Stock when approved by the Board. The option will be immediately
exercisable, subject to an optional repurchase by the Company (at your
original purchase price) on termination of employment that will lapse over
a four-year vesting schedule with a twelve (12) month cliff vesting at the
rate of 62,500 shares vesting at the end of your first twelve months of
service and 5,208 shares vesting in each of the next succeeding
36 months, at the close of each such month during which you remain employed
with the Company.
Xxxxxx X. Xxxxxxx
May 26, 1998
Page 3 of 4
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6. Confidential Information. As an employee of the Company, you will have
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access to certain Company confidential information and you may, during the
course of your employment, develop certain information or inventions that
will be the property of the Company. To protect the interest of the
Company, you will need to sign the Company's standard "Employee Proprietary
and Inventions Agreement" as a condition of your employment. We wish to
impress upon you that we do not wish you to bring with you any confidential
or proprietary material of any former employer or to violate any other
obligation to your former employers.
7. At-Will Employment. While we look forward to a long and profitable
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relationship, should you decide to accept our offer, you will be an at-will
employee of the Company, which means the employment relationship can be
terminated by either of us for any reason at any time, with or without
cause or advance notice. Any statements or representations to the contrary
(and, indeed, any statements contradicting any provision in this letter)
should be regarded by you as ineffective. Further, your participation in
any stock option or benefit program is not to be regarded as assuring you
of continuing employment for any particular period time.
8. Authorization to Work. Because of Federal regulations adopted in the
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Immigration Reform and Control Act of 1986, you will need to present
documentation demonstrating that you have authorization to work in the
United States. If you have any questions about this requirement, which
applies to U.S. citizens and non-U.S. citizens alike, please contact our
human resources department.
9. Term of Offer. This offer will remain open until June 5, 1998. If you
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decide to accept our offer, and I hope that you will, please sign the
enclosed copy of this letter in the space indicated and return to me. Upon
your signature below, this will become our binding agreement with respect
to the subject matter of this letter, superseding in their entirety all
other or prior written or oral agreements by you with the Company as to the
specific subjects of this letter, and will be binding upon and inure to the
benefit of our respective successors and assigns, and your heirs,
administrators and executors, will be governed by California law, and may
only be amended in a writing signed by you and the Company.
Xxxxxx X. Xxxxxxx
May 26, 1998
Page 4 of 4
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10. Dispute Resolution. If a legal action or other proceeding is brought for
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enforcement of this Agreement because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be entitled to
recover reasonable attorney's fees and costs incurred, both before and
after judgment, in addition to any other relief to which they may be
entitled.
We are very excited to have you join us at E-Tek Dynamics and look forward
to working with you.
Sincerely,
E-TEK DYNAMICS
/s/ Xxxxxxx X. Xxxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxxx
President and Chief Executive Officer
Acknowledged, Accepted and Agreed
/s/ Xxxxxx X. Xxxxxxx
______________________________
Xxxxxx X. Xxxxxxx
Date:
