EX-10.1



 Exhibit 10.1 
  





 
 Fabrinet USA, Inc. 

3736 Fallon Road, #428 
 Dublin, CA
94568 
 November 5, 2015 
  

	
	Mr. Hong Q. Hou
	11735 Sky Valley Way NE
	Albuquerque, NM 87111

 Dear Hong, 
 We
are pleased to extend an offer of employment to you, for the position of Executive Vice President, Chief Technical Officer, for Fabrinet USA, Inc. (“FUSA” or the “Company”). You will report to Mr. David T. Mitchell,
Chief Executive Officer (CEO) of Fabrinet; and your anticipated start date will be the beginning of 2016. 
 Your duties generally will
consist of those associated with managing and developing advanced technical and engineering processes for the Company and its affiliates. You will devote substantially all of your business time and efforts to the performance of those 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, non-disclosure or confidentiality agreements. 
 Your annual base salary will
be $475,000.00, 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 eighty percent (80%) 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) day following 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 insurance (medical, dental & vision for you and your eligible dependents), a 401k plan, and group term
life insurance. Reasonable business-related travel and other expenses will be reimbursable via monthly expense reporting in accordance with the Company’s policies and procedures, but in no event will any reimbursement occur later than the
fifteenth (15th) 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 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 we will recommend to the Board of Directors of Fabrinet, the
parent company of FUSA, that you be awarded a long-term incentive equity award with a compensation value of $850,000 of Restricted Share Units (“RSUs”) covering ordinary shares of Fabrinet, in accordance with the terms of the Fabrinet 2010
Performance Incentive Plan (the “Plan”) and Fabrinet’s standard form of restricted share units agreement under the Plan. This award is subject to Board approval, including the number of RSUs granted. RSUs granted under the Plan
generally will vest over a four (4) year period as follows: 25% of the RSUs subject to the grant shall vest on the anniversary of the vesting commencement date for each of the next four (4) years. Vesting is conditioned upon your continued
service to FUSA on each vesting 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: 1) by FUSA without good cause; 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; and (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. 

In the event your employment is terminated by you on account of your retirement, 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 years of your employment with FUSA as of your retirement date, and
(2) all of the payments and benefits described in subsection (B) of the preceding paragraph. 
 Any payments or benefits due to
you under the preceding two paragraphs shall be conditioned upon your execution of a general release of claims in such form as provided by FUSA 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. 

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. 

  
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 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 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. 

For purposes of this offer letter, “retirement” means your voluntary termination of employment (a) on or after attainment of
age 65, and (b) a successor to your position assumes your position that is satisfactory to the Company’s board of directors. 

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 there under
(together, “Section 409A”). 
 In addition, if FUSA, or its affiliates is a public company with its securities listed on a stock
exchange at the time of an involuntary termination of your employment, and at the time of such termination it is determined 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 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 

  
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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 such 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 the terms of 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. 

Prior to your start date we will provide 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 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 Ms. Na Yang, Fabrinet’s Global HR Director by phone at (408) 813-1479 or email at nay@fabrinet.com. 
 If you are
in agreement with the provisions of this letter detailing the initial terms of your employment with FUSA, please indicate your acceptance by signing below and identifying your intended start date. 

  
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 We look forward to you joining our organization. 

Sincerely, 
  

	
	         /s/ Toh-Seng Ng

	Toh-Seng Ng
	Chief Financial Officer
	Fabrinet USA, Inc.

 ***     ***     *** 

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/ Hong Hou

	Hong Hou

  

	
	
	         November 6, 2015

	 Date


  

	
	         January 4, 2016

	 Start Date



  
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