Exhibit 10.1

 

LOGO [g868154snap1.jpg]

FABRINET USA, Inc.

3637 Fallon Road, Suite 428

Dublin, CA 94568

February 5, 2015

Harpal Gill

650 Pickering Avenue

Fremont, CA 94536

Dear Harpal,

This letter is intended to amend and restate your offer letter dated May 1, 2005
and subsequently amended on February 14, 2007, and December 29, 2008. We
previously extended an offer of employment to you, which you accepted, for the
position of Senior Vice President of Operations of Fabrinet USA, Inc. (“FUSA” or
“Fabrinet” or the “Company”), effective May 1, 2005. You have since been
promoted to President and Chief Operating Officer of Fabrinet. You will report
to Mr. David T. Mitchell, Chief Executive Officer (CEO) of Fabrinet.

Your duties will generally consist of those associated with continuously
improving Manufacturing and Operation excellences. As the President and Chief
Operating Officer of Fabrinet, you will devote substantially all of your
business time and efforts to the performance of your duties and use your best
efforts in such endeavors. Acceptance of this offer constitutes your
representation that your execution of this agreement and performance of the
requirements of this position will not be in violation of any other agreement to
which you are a party, including but not limited to any current non-solicit
agreements.

Your annual base salary will be $750,000.00 to be paid on a semi-monthly basis
on or about the 15th and 30th of each month in accordance with FUSA’s payroll
policy, subject to applicable U.S. tax withholdings. Your base salary will be
subject to review and adjustment by the Company from time to time, in its sole
discretion. Subject to the Board’s approval, you will be eligible to participate
in Fabrinet’s Executive Incentive Plan, with a target bonus of Ninety Five
percent (95%) of your base salary. Any target bonus, or portion thereof, will be
paid as soon as practicable after the Compensation Committee of the Board of
Directors determines that the target bonus (or relevant portion thereof) has
been earned, but in no event shall any such target bonus be paid later than
sixty (60) days following the end of the applicable target bonus performance
period.

Additionally, you will be eligible to participate in FUSA’s Employee Benefits
Plan, which includes two hundred forty (240) hours paid time off (PTO), health
care (medical, dental & vision for you and your eligible dependents), 401(k),
and Group Term Life. Reasonable business-related travel and other expenses will
be reimbursable via monthly expense reporting pursuant to the Company’s policies
and procedures, but in no event will any reimbursement

--------------------------------------------------------------------------------

occur later than the fifteenth (15) day of the third month following the later
of (i) the close of the Company’s fiscal year in which such expenses are
incurred or (ii) the calendar year in which such expenses are incurred. You will
be eligible to receive a car allowance of $1,000 per month, provided that you
are an employee of FUSA on the date the car allowance is paid to you each month.
The Company may modify or terminate its benefits programs and arrangements from
time to time as necessary or appropriate. The Company has the right to withhold
from any payments or benefits under this letter all applicable federal, state
and local taxes required to be withheld and any other required payroll
deductions.

Upon commencement of your employment, you were awarded a long-term incentive
equity award of an option to purchase ordinary shares of Fabrinet at $1.75 per
share and pursuant to the terms of the Company’s stock option plan then in
effect. The options became fully vested and exercisable over a four year period
immediately following the option grant date.

This offer is not considered a contract guaranteeing employment for any specific
duration. Employment with FUSA is on an at-will basis. Thus you are free to
terminate your employment for any reason at any time with or without prior
notice. Similarly, FUSA may terminate the employment relationship with or
without cause or notice. However, in the event your employment is terminated
prior to the Transition Date (as defined below): 1) by FUSA without good cause,
or 2) by you for good reason, you will (A) be eligible to receive a lump sum
payment payable on the sixtieth (60) day following your termination date equal
to the sum of (i) twelve (12) months of your then present base salary, and
(ii) any earned but unpaid bonus as of the date of your termination of
employment; (B) be eligible to receive a lump sum payment payable on the
sixtieth (60) day following your termination date equal to two times your cost
of COBRA coverage for twelve months under the FUSA health plans then in effect
for you and your covered dependents; (C) become 100% vested immediately prior to
your termination date in any outstanding stock options, restricted stock,
restricted stock units, stock appreciation rights, phantom stock or other equity
based awards granted to you by FUSA, which have not previously fully vested; and
(D) receive continued tax equalization benefits under FUSA’s expatriate policy,
as in effect on the date of your termination, for the calendar year in which
your termination date occurs, and the following calendar year, with such
benefits being payable as soon as practicable following the year the
compensation subject to the tax equalization payment relates was paid, and in no
event later than the end of your second taxable year beginning after your
taxable year in which your U.S. Federal income tax return is required to be
filed (including any extensions) for the year to which the compensation subject
to the tax equalization payment relates, or, if later, your second taxable year
beginning after the latest such taxable year in which your foreign tax return or
payment is required to be filed or made for the year to which the compensation
subject to the tax equalization payment relates.

In the event your employment is terminated by you on May 7, 2018 (the
“Transition Date”) or within ten (10) calendar days after the Transition Date,
you will be eligible to receive (1) a lump sum payment payable on the sixtieth
(60) day following your termination date equal to the product of one month’s
base salary multiplied by the total number of full and fractional

 

- 2 -

--------------------------------------------------------------------------------

years of your employment with FUSA as of your termination date, and (2) all of
the payments and benefits described in subsections (B), (C) and (D) of the
preceding paragraph (collectively, the “Retention Benefits”). In the event your
employment is terminated prior to the Transition Date or more than ten
(10) calendar days after the Transition Date, no Retention Benefits shall be
due, owed, or paid to you. Prior to the Transition Date, you shall use your best
efforts to recruit and train a successor so that a successor to your position
assumes your position that is satisfactory to the Company’s board of directors
upon or prior to the Transition Date.

In the event your employment is terminated on account of your death or
disability prior to the Transition Date, you will become 100% vested immediately
prior to your termination date in any outstanding stock options, restricted
stock, restricted stock units, stock appreciation rights, phantom stock or other
equity based awards granted to you by FUSA, which have not previously fully
vested.

Any payments or benefits due to you under the preceding three paragraphs shall
be conditioned upon your execution of a general release of claims in such form
as provided to you by FUSA within five (5) calendar days following your
termination date that becomes irrevocable within 60 days of your termination
date. If the foregoing release is executed and delivered and no longer subject
to revocation as provided in the preceding sentence, then such payments or
benefits shall be made or commence upon the sixtieth (60) day following your
termination date. The first such cash payment shall include payment of all
amounts that otherwise would have been due prior thereto under the terms of your
offer letter had such payments commenced immediately upon your termination date,
and any payments made thereafter shall continue as provided herein. The delayed
payments or benefits shall in any event expire at the time such benefits would
have expired had such benefits commenced immediately following your termination
date.

In the event your employment is terminated for any reason, you shall be under no
obligation to seek other employment and there shall be no offset against any
amounts due to you under this offer letter on account of any remuneration
attributable to any subsequent employment that you may obtain. Any amounts due
under the preceding four paragraphs are in the nature of severance payments, or
liquidated damages, or both, and are not in the nature of a penalty.

Anything in this offer letter to the contrary notwithstanding, all payments
required to be made by FUSA hereunder to you or your estate or beneficiaries
shall be subject to the withholding of such amounts relating to taxes as FUSA
may reasonably determine it should withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts, in whole or in part, FUSA may,
in its sole discretion, accept other provisions for payment of taxes and
withholding as required by law, provided it is satisfied that all requirements
of law affecting its responsibilities to withhold have been satisfied.

For purposes of this offer letter, “good cause” means (i) an act of dishonesty
made by you in connection with your responsibilities as an employee; (ii) your
conviction of or plea of nolo contendere to a felony, or any crime involving
fraud, embezzlement or any other act of moral turpitude; (iii) your gross
misconduct; (iv) your unauthorized use or disclosure of any proprietary

 

- 3 -

--------------------------------------------------------------------------------

information or trade secrets of the Company or any other party to whom you owe
an obligation of nondisclosure as a result of your relationship with the
Company; (v) your willful breach of any obligations under any written agreement
or covenant with the Company; or (vi) your continued failure to perform your
employment duties after you have received a written demand of performance from
the Company which specifically sets forth the factual basis for the Company’s
belief that you have not substantially performed your duties and have failed to
cure such nonperformance to the Company’s satisfaction within thirty (30) days
after receipt of such notice.

For purposes of this offer letter, “good reason” means the occurrence of any of
the following events, without your consent: (i) a material diminution in your
base compensation; (ii) a material diminution in your authority, duties, or
responsibilities; (iii) a material change in the geographic location at which
you must perform the services for the Company; or (iv) any other action or
inaction that constitutes a material breach by the Company of any written
agreement or covenant with the Company. Good reason shall not be deemed to exist
unless your termination of employment for good reason occurs within two years
following the initial existence of one of the conditions specified in clauses
(i) through (iv) above, you provide the Company with written notice of the
existence of such condition within 90 days after the initial existence of the
condition, and the Company fails to remedy the condition within 30 days after
its receipt of such notice.

Notwithstanding anything to the contrary in this offer letter, no Deferred
Compensation Separation Benefits (as defined below) will be considered due or
payable until you have incurred a “separation from service” within the meaning
of Section 409A of the Internal Revenue Code of 1986, as amended, and the final
regulations and any guidance promulgated thereunder (together, “Section 409A”).

In addition, if FUSA, Fabrinet (Cayman) or affiliates of either continues to be
a public company with its securities listed on a stock exchange at the time of
your termination of employment, and at the time of such termination it is
determined that you are a “specified employee” within the meaning of
Section 409A, the amounts payable to you, pursuant to this letter, when
considered together with any other severance payments or separation benefits
that are considered deferred compensation under Section 409A (together, the
“Deferred Compensation Separation Benefits”) that are payable within the first
six (6) months following your termination of employment, will become payable on
the first payroll date that occurs on or

 

- 4 -

--------------------------------------------------------------------------------

after the date six (6) months and one (1) day following the date of your
termination of employment. Any amount paid under this letter that satisfies the
requirements of the “short-term deferral” rule set forth in
Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred
Compensation Separation Benefits for purposes of this paragraph. In addition,
any amount paid under this letter that qualifies as a payment made as a result
of an involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the
specified limit in Section 1.409A-1(b)(9)(iii)(A) of the Treasury Regulations
will not constitute Deferred Compensation Separation Benefits for purposes of
this paragraph.

Each payment and benefit payable under this letter is intended to constitute a
separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations. The foregoing provisions are intended to comply with the
requirements of Section 409A so that none of the payments and benefits to be
provided hereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply. In no
event will the Company reimburse you for any taxes that may be imposed on you
under Section 409A or any other provision of the Code with respect to any
payments or benefits you may receive from the Company under this letter or under
any other agreement or arrangement. The parties to this letter agree to work
together in good faith to consider amendments to this letter, if required, and
to take such reasonable actions, which are necessary, appropriate or desirable
to avoid imposition of any additional tax or income recognition prior to actual
payment to you under Section 409A.

During the term of your employment and for a one-year period immediately
following the termination of your employment, you shall not, without FUSA’s
prior written consent:

(i) solicit or encourage to leave the employment or other service of FUSA,
Fabrinet (Cayman) or the affiliates of either, any employee or independent
contractor thereof or hire (on behalf of yourself or any other person or entity)
any employee or independent contractor who has left the employment or other
service of FUSA, Fabrinet (Cayman) or the affiliates of either within the
one-year period which follows the termination of such employee’s or independent
contractor’s employment or other service with FUSA, Fabrinet (Cayman) and the
affiliates of either; or

(ii) whether for your own account or for the account of any other person, firm,
corporation or other business organization, intentionally interfere with FUSA’s,
Fabrinet (Cayman)’s or any of their affiliates’ relationship with, or endeavor
to entice away from FUSA, Fabrinet (Cayman) or the affiliates of either, any
person who during the term of your employment or the one-year period following
the expiration of the term of your employment is or was a customer or client of
FUSA, Fabrinet (Cayman) or the affiliates of either.

You were previously provided additional information about general employment
conditions including Company policies, benefits programs, and completion of
employment forms. To fulfill federal identification requirements, you will need
to provide documentation to

 

- 5 -

--------------------------------------------------------------------------------

support your identity and eligibility to work in the United States. The types of
acceptable documentation are listed on Form I-9 of the U.S. Citizenship and
Immigration Services. Also, please be advised that it is the policy of FUSA to
maintain a workplace that is free of drugs and alcohol.

Should you have questions or require additional information about any benefits,
terms or conditions of your employment, please do not hesitate to contact our US
Human Resources Director, Jennifer Predmore by phone at (215) 428-1797 or email
at jennifer.predmore@fabrinet.com.

If you are in agreement with the provisions of this letter detailing the terms
of your employment with FUSA, please indicate your acceptance by signing below.

We look forward to your continuing with our organization.

 

Sincerely,

/s/ Toh-Seng Ng, Chief Financial Officer

Fabrinet USA, Inc.

 

- 6 -

--------------------------------------------------------------------------------

I accept the offer of employment with FUSA under the terms described in this
letter. I acknowledge that this letter is the complete agreement concerning my
employment and supersedes all prior or concurrent agreements and representations
and may not be modified in any way except in a writing executed by an authorized
agent of FUSA.

 

/s/ Harpal Gill

Harpal Gill

2/8/2015

Date

 

- 7 -