Exhibit 10.1


 


WJ Communications, Inc.


401
River Oaks Parkway


San
Jose, CA 95134


 


July 18, 2005


 


Personal
and Confidential 


 


Re:  Offer of Employment


 


Dear Mr. Knoch:


 


We are pleased to
offer you a position with WJ Communications, Inc., as Vice President of
Operations at a starting annual salary of $200,000/year.  In this position, you will report directly to
myself. Your responsibilities will include all functions associated with
operations of the Company, including sustaining engineering, quality and planning
groups.  You will also have duties and
responsibilities assigned to you from time to time by myself and by the Company’s
Board of Directors.


 


This offer letter
is not an employment contract, but is intended to describe the basic terms of
your employment.  The exact terms of your
employment will be as set forth in an Employment Agreement, which will contain
specific details regarding your compensation, benefits, and obligations as an
Officer of WJ Communications, and in the other documents described below.  We will prepare the Employment Agreement
within 30 days of your employment at WJ. 
Your employment package will include the following:


 


•                  You will
participate in the Top Management Incentive Bonus program, which provides a
target bonus up to a maximum of 60% of your base salary to be paid
quarterly.  Your actual bonus will depend
on two things: achievement of the Company’s revenue and profitability
objectives and achievement of certain individual objectives defined each
quarter.  You will be guaranteed $20,000
bonus for the year ending 2005 plan of your employment.


 


•                  You will receive
a sign-on bonus of $20,000, less applicable taxes, upon commencing employment.


 


•                  As part of
this offer, you will be granted an option to purchase 450,000 shares of WJ Communications, Inc.
Common Stock on or about the date you commence employment.  Your option to
purchase WJCI stock will be issued at fair market value per share on the date
you commence employment, in accordance with the WJ Communications, Inc.
2000 Employee Stock Incentive Plan.  This
option to purchase Common Stock will vest over a four-year period from the
commencement date of your employment in accordance with the vesting and
acceleration provisions set forth in your Employment Agreement.


 


•                  Upon
successful completion of outsourcing the fab, we will recommend to the Board
for approval to grant 75,000 shares of restricted stock upon successful
completion of that objective.


 





















 


•                  During your
employment at WJ, you shall be entitled to participate in the Company’s fringe
benefit plans for its executives, subject to and in accordance with applicable
eligibility requirements, such as group medical, dental, and vision care
insurance, executive medical reimbursement (to cover deductibles, co-pays, and
other legitimate medical and dental costs not covered by insurance), tax
preparation, 401(k), employee stock purchase program, life and disability
insurance plans and all other benefit plans (other than severance and
equity-based plans or arrangements) generally available to the Company’s
executive officers.  In addition, the
Company will reimburse your reasonable out-of-pocket expenses incurred in
connection with the performance of your duties hereunder, consistent with
Company policy.  You shall be entitled to
take time off in accordance with the Company’s top management vacation policy.


 


•                  Upon commencing
employment you may elect to participate in the WJ Employees’ Investment Plan,
which enables you to invest pre-tax dollars into a qualified 401(k) plan. The
plan includes up to a 3% Company matching contribution.


 


•                  Also, upon
completion of your first 90 days with WJCI, you will be eligible to participate
in the WJ Communications, Inc. Employee Stock Purchase Plan, which enables
you to purchase shares of WJCI common stock at 15% less than the Fair Market
Value on either the first or last day of the Offering Period, whichever is
lower.


 


•                  Your Employment
Agreement will contain confidentiality and non-solicitation covenants by you
agreeing not to solicit employees of the Company or use or disclose the Company’s
confidential information or trade secrets during or after your employment with
the Company.


 


•                  Your Employment
Agreement will contain a provision in which you agree that the Company’s
intellectual property, including, but not limited to, intellectual property
developed by you in the course of your employment with the Company, is and
shall belong exclusively to the Company.


 


Please
understand that your employment is contingent upon successful passage of a drug
and alcohol screening test, employment and degree verifications, and criminal
background and reference checks, all of which are required by WJ Company
Policy.  It is also contingent upon our
mutual agreement as to the definitive documentation (including your Employment
Agreement) you will be required to execute and deliver with respect to your
employment.


 


We hope
you find this offer attractive and request a written reply from you by July 22,
2005.  We look forward to your joining
our staff and to a mutually profitable relationship.


 


	
  Sincerely,

  
	
  /s/ BRUCE DIAMOND

  	
   

  
	
  Bruce Diamond

  
	
  President and CEO

  
	
   

  
	
   

  
	
  I accept this offer and will commence employment as
  of August 8, 2005.

  
	
   

  
	
  Signed: /s/ MARK KNOCH