Exhibit 10.1

 

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401 River Oaks Parkway

San Jose, CA 95134

 

Nov. 16, 2004

 

Mr. Ephraim Kwok

 

Dear Ephraim:

 

We are pleased to offer you a position with WJ Communications Inc. (the Company)
as Senior Vice President and Chief Financial Officer (CFO). Your starting salary
will be $200,000, annualized and you will report directly to myself. Your
responsibilities will include the financial management, financial processes
(including SOX 404) and financial reports of the Company, interaction with the
Audit Committee and board of directors on financial matters, supervision of the
WJ Finance and Human Resources groups, coordination of work activities with our
outside legal firm, Shumaker, Loop, Kendrick, LLP and various other activities
and responsibilities that the CEO and Board of Directors may assign to you from
time to time. You will also be a member of the Company’s Senior Management Staff
and you will directly participate in the weekly, senior management business
staff meetings and decision making processes.  Also you will participate in and
have annual performance and salary review and your yearly salary may be
increased as a result of such reviews but not decreased.

 

As an additional component of your compensation program, you will be eligible to
receive a bonus, calculated and paid quarterly. When earned this bonus is to be
paid as soon as practicable after each fiscal quarter, but not later than one
hundred twenty (120) days after the end of each such fiscal quarter. In order to
determine the amount of such bonus, the Company shall determine appropriate
business and financial targets and certain individual objectives for you for
each fiscal quarter, and your bonus for each such fiscal quarter shall be based
upon the extent to which the Company and you attain such business and financial
targets and objectives. Your maximum total annual bonus shall be 50% of your
Annual Base Salary. The determination of appropriate business targets with
respect to each fiscal quarter shall take place not later than thirty (30) days
following the receipt by the Board of Directors of the Company from the
Company’s senior management of the Company’s operating budget with respect to
such fiscal period.

 

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You will receive an initial WJ Stock Option grant upon your employment of
600,000 options. The vesting will be 25% annually over four years with no
vesting occurring until the end of the first year of employment. In the future,
you will also be eligible for possible additional option grants based upon the
company’s and your individual performance as approved by the WJ board of
directors. Also you will be eligible to participate in the WJ Restricted Stock
Incentive Program, which rewards exceptional performance with grants of WJ
restricted stock.

 

In addition to your base salary, you will be eligible to participate in our
employee benefits program, which includes a 401(k) plan with company matching
contributions of up to 3%.  Also, the company’s benefits program includes
medical, dental, life and ADD insurance coverage, and Paid Time Off, earned at
the rate of 10 days your first year and 15 days per year after one year of
service. As part of the senior management team, you will also be eligible for
the Executive Medical Reimbursement Program, which supplements the standard
health plan available to WJ Communications Employees and provides for payment of
up to $5000 per year for yourself and your family.

 

The Company requests that you complete the enclosed “Employee Agreement” as a
condition of employment. In part, this Agreement requests that a departing
employee refrain from using or disclosing the Company’s Confidential Information
(as defined in the Agreement) in any manner that might be detrimental to or
conflict with the business interests of the Company or its employees.  This
Agreement does not prevent a former employee from using his or her general
knowledge and experience — no matter when or how gained — in any new field or
position.

 

For purposes of federal immigration law, you will be required to provide the
Company documentary evidence of your identity and eligibility for employment in
the United States.  Such documentation must be provided to us within three
business days of your date of hire, or our employment relationship will be
terminated.

 

Please understand that this offer is contingent upon successful passage of a
pre-employment drug screening test and background check, which are required by
WJ Policy, copies of which are available through our Human Resources Department.

 

We hope that you and the Company will find mutual satisfaction with your
employment.  All of us at WJ Communications are very excited about your joining
our team and look forward to a beneficial and fruitful relationship. 
Nevertheless, employees have the right to terminate their employment at any time
with or without cause or notice, and the Company reserves for itself an equal
right.  Nothing in this letter is intended to modify this “at will” employment
relationship.

 

It is our understanding that you will be able to start at WJ no later than Jan.
2, 2005 and this employment offer is contingent on that happening. It may
however be advantageous if you could come into the Company for several hours on
1-2 days in mid-late December, 2004 and I would like to discuss this possibility
further with you.

 

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This letter and the “Employee Agreement” contain the entire agreement with
respect to your employment and supersede any prior or contemporaneous
representations or agreements.  The terms of this offer may only be changed by
written agreement by the President/CEO.

 

We look forward to a positive response to our offer, Ephraim. Please indicate
your acceptance by signing and returning a copy (via fax: 408-577-6622) of this
letter and a completed “Employment Agreement” to me no later than November 22,
2004.

 

Very truly yours,

 

 

/s/ Michael R. Farese

 

Michael R. Farese, PhD

President and CEO

 

 

AGREED AND ACCEPTED:

 

 

/s/ Ephraim Kwok

 

Ephraim Kwok

 

 

November 17, 2004

 

Date

 

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