Document:

Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”)
is entered into effective as of August 14, 2007 (the “Effective Date”) by
and between SEMILEDS CORPORATION, a Delaware corporation (the “Company”), and
DAVID YOUNG (“Employee”).  The term
Company in this Agreement (other than the application of Section 2) shall
include its affiliates where appropriate.

 

RECITALS:

 

A.                                   The Company wishes to employ Employee as Chief Financial
Officer (“CFO”) of the Company.

 

B.                                     Employee wishes to be employed by the Company as the Company’s
CFO.

 

AGREEMENT:

 

In consideration of the foregoing
recitals and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.                                      EMPLOYMENT: TERM OF EMPLOYMENT

 

1.1                                 Employee shall commence working for the Company on March 3,
2008 (the “Commencement Date”).  Employee
hereby understands and agrees that employment with the Company is terminable at
will and that both the Company and Employee shall have the right to discontinue
the employment relationship at any time and for any reason.

 

1.2                                 Employee shall provide financial, accounting and operational
duties for the Company.  Employee hereby
agrees to perform such duties and to satisfy such responsibilities during
employment with the Company.

 

2.                                      CONSIDERATION

 

2.1                                 Company agrees to compensate Employee, starting from the
Commencement Date, at the rate of $100,000 per year, payable monthly in
accordance with the Company’s regular payroll policies and procedures as in
effect from time to time.  Employee shall
receive an allowance amount of $12,000 per year.  Employee will understand that compensation is
subjected to change annually as reviewed by the Company.

 

2.2                                 The Company will grant Employee the following stock options
based on the following respective terms:

 

2.2.1                        An option to purchase 500,000 shares of the Company’s Common
Stock will be granted about the Commencement Date (the “First Option”) pursuant
to the company employee stock option plan. 
The First Option will be subject to annual vesting over a four (4) year
period, starting from the Commencement Date (25% of the First Option will be
vested at each of the anniversaries of the Commencement Date, such that all of
the First Option shares will be vested on the fourth anniversary of the
Commencement Date).

 

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2.2.2                        An option to purchase 500,000 shares of the Company’s Common
Stock will be granted about the Commencement Date (the “Second Option”),
pursuant to the company employee stock option plan.  The Second Option will be subject to annual
vesting over a four (4) year period, starting one (1) year from the
Commencement Date (25% of the Second Option will be vested at each of the
anniversaries of the Commencement Date, starting from the second anniversary of
the Commencement Date, such that all of the Second Option shares will be vested
on the fifth anniversary of the Commencement Date).

 

2.2.3                        If this Agreement is terminated by the Company without Cause
(as defined below) before the first (1st) anniversary of the Commencement Date, then all of the
First Option shares will be deemed vested.

 

2.2.4                        If this Agreement is terminated by the Company without Cause
after the first anniversary of the Commencement Date but before the second (2nd) anniversary of the Commencement Date, then all of Employee’s
outstanding option shares will be deemed vested.

 

2.2.5                        In the event of the Company’s Change of Control (as defined
below) that consummates within twenty-seven (27) months from the Effective Date
(provided that the Commencement Date shall occur on or before November 12,
2007; or within twenty-four months from the Commencement Date, if the
Commencement Date shall occur after November 12, 2007), (a) all of
the shares under the First Option and Second Option will be deemed vested upon
such Change of Control, and (b) the Company will additionally grant
Employee an option to purchase 1,000,000 shares of the Company’s Common Stock
to be fully vested and exercisable upon such Change of Control, pursuant to the
company employee stock option plan (subject to recapitalization, stock split,
reverse stock split, subdivision, combination, reclassification or similar
changes in the capital structure of the Company without consideration).  “Change of Control” means the acquisition of
the Company by another entity by means of (x) cash, (y) merger or
stock transfer (excluding any financing transaction or reincorporation by the
Company) in connection with which the stockholders of the Company immediately
prior to the transaction possess less than 50 percent (50%) of the voting
securities of the surviving or continuing entity immediately after the
transaction, or (z) a sale of all of the assets of the Company.

 

2.3                                 The Company may, at its sole discretion and based on its
satisfaction of Employee’s performance, grant Employee the following additional
stock options based on the following respective terms:

 

2.3.1                        About the second anniversary of the Commencement Date, an
option to purchase 500,000 shares of the Company’s Common Stock (the “Third
Option”), pursuant to the Company employee stock option plan (subject to
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar changes in the capital structure of the Company
without consideration).  The Third Option
will be subject to annual vesting over a four (4) year period, starting
two (2) years from the Commencement Date (25% of the Third Option will be
vested at each of the anniversary of the Commencement Date, starting from the
third anniversary of the Commencement Date, such that all of the Third Option
shares will be vested on the sixth anniversary of the Commencement Date).

 

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2.3.2                        About the third anniversary of the Commencement Date, an
option to purchase 500,000 shares of the Company’s Common Stock (the “Fourth
Option”), pursuant to the Company employee stock option plan (subject to
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar changes in the capital structure of the Company
without consideration).  The Fourth
Option will be subject to annual vesting over a four (4) year period,
starting three (3) years from the Commencement Date (25% of the Fourth
Option will be vested at each of the anniversary of the Commencement Date,
starting from the fourth anniversary of the Commencement Date, such that all of
the Fourth Option shares will be vested on the seventh anniversary of the
Commencement Date).

 

2.4                                 Employee shall be entitled to vacation, sick leave, and
other fringe benefits in accordance with the Company’s policies as they exist
from time to time.

 

3.                                      PERFORMANCE OF DUTIES: PROPRIETARY
INFORMATION AND INVENTION AGREEMENT

 

3.1                                 Employee will serve as CFO of the Company.  In his capacity as CFO, Employee will do and
perform all services, acts, or things necessary or advisable as an officer of
the Company in such capacities, subject at all times to the policies set by the
Company and according to the company code of ethics.

 

3.2                                 In consideration of the payments to be made hereunder,
Employee agrees to devote his full time and efforts during normal working hours
to the performance of his duties hereunder and to serve the Company diligently
and to the best of his abilities.

 

3.3                                 As part of and in connection with the execution of this
Employment Agreement, the parties have executed a proprietary information and
invention agreement of even date herewith (the “Proprietary Information and
Inventions Agreement”), a copy of which is attached hereto as Exhibit A and incorporated
herein.

 

4.                                      NONCOMPETITION

 

4.1                                 The Company is engaged in the business of light emitting
diodes (“LED”), LED packaging, lighting, and other related products (such
business, together with any other business of the Company conducted,
constituted or reasonably contemplated by the Company during the
Non-Competition Period, as defined below, being collectively referred to herein
as the “Business”).  The parties acknowledge
that the relevant market for the Business is worldwide in scope and that there
exists intense worldwide competition for the products and services of the
Business.

 

4.2                                 Employee acknowledges and agrees with the Company that
Employee’s services to the Company are unique in nature and that the Company
would be irreparably damaged if Employee were to provide similar services to
any individual, corporation, company, partnership, joint venture or any other
entity (each or together, the “Person”) competing with the Company or engaged
in a similar business.  Accordingly,
Employee covenants and agrees with the Company that during the period
commencing from the Effective Date and ending twenty-four (24) months after the
date of termination of Employee’s employment with the Company (the “Non-Competition
Period”): Employee shall not, directly or indirectly, either for himself or 

 

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herself or
for any Person, participate in any business (including, without limitation, any
division, group or franchise of a larger organization) in Taiwan, China, Korea,
Japan, Singapore, Malaysia, United States, Canada, Germany and Netherlands
which engages or which proposes to engage in the promotion, design,
development, manufacture, sale, distribution or production of products or
technologies involving the Business.  For
purposes of this Agreement, the term “participate in” shall include, without
limitation, having any direct or indirect interest in any Person, whether as a
sole proprietor, owner, stockholder, partner, joint venturer, creditor or
otherwise, or rendering any direct or indirect service, advice or assistance to
any Person whether as a partner, director, officer, employee, agent,
representative, advisor, consultant or otherwise.

 

4.3                                 Employee agrees that during the Non-Competition Period, at
any time or for any reason, Employee shall not, directly or indirectly:  (a) with respect to the Business,
solicit or divert any business or clients or customers of the Company away from
the Company; (b) induce customers, clients, suppliers, agents or other
Persons under contract or otherwise associated or doing business with the
Company, to reduce or alter any such association or business with the Company; (c) induce
or attempt to induce any Person in the employment of the Company to (i) terminate
such employment, and/or (ii) accept employment, or enter into any
consulting arrangement, with any Person other than the Company; or (d) hire,
attempt to hire either for Employee’s or on behalf of any other Person,
directly or through another Person any person who was an employee of the
Company at any time during the Non-Competition Period.

 

4.4                                 The parties agree that (i) Employee is obligated under
this Agreement to fulfill obligations, comply with covenants and provide
services of a special, unique, unusual, extraordinary and intellectual
character, thereby giving this Agreement peculiar value so that the loss of
such fulfillment or any violation by Employee of this Agreement, including but
not limited to with respect to Sections 4.2 and 4.3 of this Agreement, will
materially and irreparably harm the Company, that money damage will not afford
the Company an adequate remedy, and (ii) if Employee is in breach or
threatens breach of any provision of this Agreement, the Company shall be
entitled, in addition to all other rights and remedies as may be provided by
law or equity, to seek and obtain provisional relief from a court or a tribunal
requiring specific performance and injunctive and other equitable relief to
prevent or restrain a breach of any provision of this Agreement.  In addition to the remedies set forth above,
if Employee is in breach of any provision of this Agreement, Employee shall pay
the Company immediately upon receipt of the Company’s request an amount equal
to the amount of Employee’s annual salary rate as of the termination of this
Agreement.  Each of the parties to this
Agreement shall be entitled to enforce such party’s rights under this Agreement
specifically, to recover damages and costs (including reasonable attorneys’
fees) caused by any breach of any provision of this Agreement, and to exercise
all other rights existing in such party’s favor.

 

4.5                                 As consideration for the covenants described in this
Agreement, the Company may, at its own discretion, deliver to Employee, at
Employee’s last known address or bank account, for each twelve-month period,
commencing on the date of Employee’s termination, an amount equal to one-half
of Employee’s annual salary then existed. 
The parties acknowledge that this payment shall constitute sufficient
consideration for the undertakings described in Sections 4.2 and 4.3.  Notwithstanding the previous sentence, the
parties agree that if a court or a duly seated tribunal determines that additional
consideration would be required for the effectiveness and enforceability of
such undertakings, then the Company shall have the 

 

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option, in
its sole discretion, of paying such additional consideration within a
reasonable time after such court or tribunal determination.

 

5.                                      TERMINATION

 

5.1                                 This Agreement may be terminated by either party for any
reason with thirty (30) days’ notice to the other party.

 

5.2                                 Notwithstanding the above, this Agreement may be terminated
immediately with Cause.  “Cause”
means:  (a) the conviction of a
felony or of any criminal offense involving moral turpitude, (b) the
repeated failure of Employee to satisfactorily perform duties reasonably
required of him by the Company, (c) Employee’s material breach of the
Proprietary Information and Inventions Agreement, the Company’s written
policies established by the Board of Directors or of any term or provision of
this Agreement or (d) misappropriation of property of the Company or unlawful
appropriation of a corporate opportunity of the Company or the Company
business.

 

5.3                                 This Agreement shall automatically terminate, without notice
and without liability to the Company, upon the death or permanent disability of
Employee.

 

5.4                                 Other than as set forth in Sections 2.2.3 and 2.2.4, in the
event of a termination of this Agreement for any reason or for no reason,
Employee shall thereafter have no further right to receive compensation or
benefits under this Agreement, other than compensation or benefits accrued and
vested prior to the date of such termination.

 

6.                                      CONFIDENTIAL INFORMATION AND INVENTIONS

 

6.1                                 Employee agrees to abide by all of the terms and conditions
of the Proprietary Information and Inventions Agreement.

 

6.2                                 Without limiting the generality of any of his obligations
under the Proprietary Information and Inventions Agreement, Employee agrees
that he shall hold in confidence and shall not at any time during or after his
relationship with the Company (i) directly or indirectly reveal, report,
publish, disclose, or transfer the Confidential Information (as defined in the
Proprietary Information and Inventions Agreement) or any part to any person or
entity, (ii) use any of the Confidential Information of any party thereof
for any purpose other than in the course of his work for, and for the benefit
of the Company, (iii) assist any person or entity other than the Company
to secure any benefit from the Confidential Information or any part thereof or
to solicit business from or provide services or products of any type to any of
the Company’s customers, or (iv) solicit (on Employee’s behalf or on
behalf of any third party) any employee of the Company for the provision of any
services or products which Employee is prohibited from providing hereunder.

 

6.3                                 The obligations set forth in the Section 6 shall
survive any termination of the Agreement for any reason whatsoever.

 

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7.                                      EQUITABLE REMEDIES

 

It is anticipated by the parties
that during the term hereof Employee will continue, on behalf of the Company,
to develop and acquire knowledge with respect to, among other things, the
research, development and/or enhancement of products included in, derivative of
or related to such intellectual property assets of the Company.  Because of the foregoing, the parties
acknowledge and agree that the services to be performed hereunder by Employee
are of a special, unique, unusual, extraordinary or intellectual character, and
which are of peculiar value the loss of which cannot be reasonably or
adequately compensated in damages. 
Accordingly, Employee acknowledges and agrees that the Company shall be
entitled to all equitable remedies including injunctive relief to enforce the
provisions of the Agreement.

 

8.                                      SURRENDER OF BOOKS AND RECORDS

 

All notes, data, reference
materials, sketches, drawings, memoranda, documentation and records in any way
incorporating or reflecting any of the Confidential Information and all
proprietary rights therein, including copyrights, shall, as between the Company
and Employee, belong to the Company, and Employee agrees to turn over all
copies of such materials in Employee’s control to the Company upon request or
upon termination of Employee’s relationship with the Company.  Employee agrees that on the termination of
his relationship with the Company in any manner, he will participate in an exit
interview conducted by a representative of the Company.

 

9.                                      SEVERABILITY

 

To the extent that any provision of
this Agreement shall be unlawful, invalid, void or unenforceable for any
reason, it shall be deemed severable from, and shall in no way affect the
validity or enforceability of, the remainder of such provision (if any) or of
this Agreement, which shall remain valid and enforceable according to its
terms.  In furtherance of, and not in
limitation of, the foregoing, should the duration or geographical extent of, or
business activities covered by, any provision of this Agreement be in excess of
that which is valid and enforceable under applicable law, than such provision
shall be deemed narrowed to the broadest term, coverage or scope permitted by
applicable law.

 

10.                               MISCELLANEOUS

 

10.1                           Assignment.  Employee’s rights, duties and
responsibilities under this Agreement may not be assigned, delegated, or
otherwise transferred by Employee in any manner without the prior express
written consent of the Company, which the Company may withhold in its
discretion.  This Agreement and all
obligations and benefits of the Company hereunder shall bind and inure to the
benefit of the Company, its respective affiliates, and its respective
successors and assigns.

 

10.2                           Notices.  Any notice, request, demand, statement,
authorization, approval or consent required or permitted under this Agreement
shall be in writing and shall be made by, and deemed duly given upon, (a) deposit
in the mail, postage prepaid, registered or certified, return receipt
requested, (b) personal delivery, (c) delivery to an overnight
courier of recognized reputation, or (d) facsimile transmission (with
confirmation by mail).  All such notices
and 

 

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communications
hereunder shall be deemed given when received, as evidenced by the
acknowledgment of receipt issued with respect thereto by the applicable postal
authority or the signed acknowledgment of receipt of the person to whom such
notice or communication shall have been addressed.

 

10.3                           Entire Agreement.  This Agreement, the schedules referred to
herein and the Proprietary Information and Inventions Agreement constitute the
entire contract between the parties with respect to the subject matter covered
by this Agreement, and supersede all previous discussions, negotiations, oral
or written, representations, statements, arrangements, agreements and
understandings, if any, by and among the parties with respect to the subject
matter covered by this Agreement other than those herein, and any such
discussions, negotiations, oral or written, representations, statements,
arrangements, agreements and understandings are hereby canceled and terminated
in all respects.  This Agreement may not
be amended, changed or modified except by a writing duly executed by the
parties hereto or their duly authorized representatives.  All amendments or modifications of this
Agreement shall be binding upon the parties despite any lack of consideration
so long as the same shall be in writing and executed by the parties
hereto.  The parties have made no
representations or warranties not expressly set forth in this Agreement.

 

10.4                           Remedies.  All rights and remedies of the parties are
separate and cumulative, and no one of them, whether exercised or not, shall be
deemed to be to the exclusion of or to limit or prejudice any other legal or
equitable rights or remedies which the parties may have.  The parties shall not be deemed to waive any
of their rights or remedies under this Agreement, unless such waiver is in
writing and signed by the party to be bound. 
No delay or omission on the part of any party in exercising any right or
remedy shall operate as a waiver of such right or remedy or any other right or
remedy.  A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion.

 

10.5                           Counterparts.  This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same agreement.  A facsimile signature page shall be
deemed an original.

 

10.6                           Governing Law.  The rights and obligations of the parties
hereto shall be construed and enforced in accordance with and governed by the
laws of Taiwan, excluding that body of law known as conflicts of law.

 

10.7                           Binding Effect.  This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors,
permitted assigns and legal and personal representatives.

 

10.8                           Legal Advice and Construction of Agreement.  Both the Company
and Employee have received, or have had sufficient opportunity to receive,
independent legal advice with respect to the advisability of entering into this
Agreement, and neither has been entitled to rely upon or has in fact relied
upon the legal or other advice of the other party or such other party’s legal
counsel in entering into this Agreement. 
Each party has participated in the drafting and preparation of this
Agreement, and accordingly, in any construction or interpretation of this
Agreement, the same shall not be construed against any party by reason of the
source of drafting.  

 

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Employee
expressly agrees that there are no expectations contrary to the Agreement and
no usage of trade or regular practice in the industry shall be used to modify
the Agreement.

 

IN WITNESS WHEREOF, the parties have
executed this Agreement effective as of the date first above written.

 

	
  COMPANY

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
  SEMILEDS CORPORATION

  	
   

  	
  David Young

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/

  	
   

  	
  /s/ David Young

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

8

 

EXHIBIT A

 

SEMILEDS CORPORATION

 

PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENT

 

This Proprietary Information and Inventions
Agreement (the “Agreement”)
is entered into between DAVID YOUNG and the Company (as defined below), dated
effective August 14, 2007.  “Company” shall
collectively mean SemiLEDs Corporation, a Delaware, USA, corporation, and all
of such entity’s affiliates, including but not limited to their subsidiaries.

 

In consideration of my employment or continued
employment, and the compensation now and hereafter paid to me, I hereby
agree as follows:

 

1.             Recognition of Company’s Rights;
Nondisclosure.  At all times during
and after my employment with the Company, I will hold in strictest
confidence and will not use, lecture upon, publish, divulge or disclose to any “unauthorized
person” (as described below), or use for any unauthorized purposes (as
described below), nor will I authorize or encourage any other person to commit
any of such acts for any unauthorized purposes, any of the Company’s Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing.  I hereby assign to the Company any rights I
may have or acquire in such Proprietary Information and recognize that all
Proprietary Information shall be the sole property of the Company and its
assigns and that the Company and its assigns shall be the sole owner of all
patent rights, copyrights, mask work rights, trade secret rights and all other
rights throughout the world (collectively, “Proprietary Rights”) in connection
therewith.

 

1.1           “Proprietary
Information” means trade secrets, confidential knowledge, data
or any other proprietary information of the Company.  By way of illustration but not limitation, “Proprietary
Information” includes (a) inventions, mask works, trade secrets, ideas,
processes, formulae, computer programs, software, source and object codes,
logic design, data, documentation, other works of authorship, cell lines,
know-how, improvements, discoveries, test results, specifications, designs,
schematics, and techniques (hereinafter collectively referred to as “Inventions”); (b) information
regarding plans for research, developments, new products, product plans,
marketing and selling, business plans, strategies, forecasts, projections,
budgets, unpublished financial information, licenses, prices and costs; (c) personnel
information, including organizational structure, salary, skills and
qualifications of employees; (d) customer and supplier information,
including identities, key contact personnel, preferences, needs and
circumstances, product sales and purchase history or forecasts and agreements;
and (e) any other information that is not known to the public.

 

If I am in doubt as to whether certain information
is Proprietary Information, I agree to consult with the management of the
Company.

 

1.2           An “unauthorized person” means any person
who does not have a need to know the information to further a
Company-authorized purpose, or who is not obligated to maintain such
information in confidence and to use such information only for a
Company-authorized purpose, or who is not otherwise approved in writing by an
officer of the Company.

 

1

 

1.3           An “unauthorized
purpose” means a purpose that does not further the interests of
the Company or that is not otherwise approved in writing by an officer of the
Company.

 

2.             Third Party Information.  I understand, in addition, that the Company
has received and in the future will receive from third parties confidential or
proprietary information (“Third
Party Information”) subject to a duty of the Company’s part to
maintain the confidentiality of such information and to use it only for certain
limited purposes.  During the term of my
employment and thereafter, I will hold Third Party Information in the
strictest confidence and will not disclose (to anyone other than Company
personnel who need to know such information in connection with their work for
the Company) or use, except in connection with my work for the Company, Third
Party Information unless expressly authorized by an officer of the Company in
writing.

 

3.             Assignment of Inventions.

 

3.1           I agree that all Inventions,
including all Proprietary Rights with respect thereto (including but not
limited to new contributions, improvements, ideas, discoveries, computer source
code and documentation), whether or not patentable, copyrightable or otherwise registrable
under applicable statutes, that I made, produced, conceived, developed, reduced
to practice, learned or worked on, either alone or jointly with others, whether
or not reduced to drawings, written description, documentation, models or other
tangible form during the period of my employment with the Company are hereby
assigned to the Company and shall be the exclusive property of the Company.

 

3.2           I acknowledge that all original works
of authorship which are made by me (solely or jointly with others) within the
scope of my employment and which are protectable by copyright are “works made
for hire.”  Inventions assigned to or as
directed by the Company by this paragraph 3 are hereinafter referred to as “Company Inventions.”\

 

3.3           Any invention described in a patent
or copyright application or disclosed to third parties by me within one (1) year
after terminating my employment with the Company shall be presumed as invention
conceived or made during the period of my employment for the Company, and such
invention shall be assigned to the Company as provided by this Agreement,
provided it relates to my work with the Company.

 

3.4           I hereby waive any and all Moral
Rights (as described below) that I may have in the Company Inventions, and to
assign all such Moral Rights to the Company. 
“Moral Rights”
mean any rights to claim authorship of the Inventions, to object to or prevent
the modification of any Inventions, or to withdraw from circulation or control
the publication or distribution of any Inventions, and any similar right,
existing under judicial or statutory law of any country in the world, or under
any treaty, regardless of whether or not such right is denominated or generally
referred to as a “moral right.”

 

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4.             Enforcement of Proprietary
Rights.  I will assist the Company in
every proper way to obtain and from time to time enforce Proprietary Rights
worldwide relating to Company Inventions in any and all countries.  To that end I will execute, verify and deliver
such documents and perform such other acts (including appearances as a witness)
as the Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining and enforcing such Proprietary Rights and
the assignment thereof.  In addition, I
will execute, verify and deliver assignments of such Proprietary Rights to the
Company or its designee.  My obligation
to assist the Company with respect to Proprietary Rights relating to such
Company Inventions in any and all countries shall continue beyond the
termination of my employment, but the Company shall compensate me at a
reasonable rate after my termination for the time actually spent by me at the
Company’s request on such assistance.

 

In the event the Company is unable for any reason,
after reasonable effort, to secure my signature on any document needed in
connection with the actions specified in the preceding paragraph, I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agent and attorney in fact, to act for and in my behalf to
execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph thereon with
the same legal force and effect as if executed by me.  I hereby waive and quitclaim to the Company
any and all claims, of any nature whatsoever, which I now or may hereafter have
for infringement of any Proprietary Rights assigned hereunder to the Company.

 

5.             Obligation to Keep Company
Informed.  During the period of my
employment, I will promptly disclose to the Company fully and in writing
and will hold in trust for the sole right and benefit of the Company any and
all Inventions.  In addition, after
termination of my employment, I will disclose all patent or copyright
applications filed by me within a year after termination of employment.

 

6.             Prior Inventions.  Inventions, if any, patented or unpatented,
copyrighted or not, which I made prior to the commencement of my employment
with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, I
have set forth on Exhibit 1
attached hereto a complete list of all Inventions that I have, alone or jointly
with others, conceived, developed or reduced to practice or caused to be
conceived, developed or reduced to practice prior to commencement of my
employment with the Company, that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement.  If no such list is attached
to this Agreement, I represent that I have made no such inventions prior
to the commencement of my employment with the Company.

 

7.             Conflict of Interest.  I acknowledge and agree that, during the
period of my employment by the Company, without the Company’s express written
consent, I am not permitted to engage in any outside business activity,
including consulting services, outside employment, investment in, and providing
times to any entity that buys from, sells or provide services to, the Company,
or such business activity that directly or indirectly related to the business
in which the Company is involved or planned to be involved.  I am also not permitted to engage in any
activity not relating to the Company’s business that utilizes the Company’s
equipment or Proprietary Information. 
Further, I am not permitted to engage in any other activities that
conflict with my obligations to the Company.

 

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8.             Non-Solicitation.  For the period of my employment by the
Company and for one (1) year after the date of termination of my
employment by the Company for any reason, I agree that I will not either
directly or indirectly solicit, induce, recruit or encourage any of the Company’s
employees to leave their employment or take away such employees, or attempt to
solicit, induce, recruit, encourage or take away employees of the Company,
either for myself or for any other person or entity.

 

9.             No Unfair Competition.  I acknowledge and agree that (a) the
identities, key contact personnel, preferences, needs and circumstances, and
other information of or relating to the Company’s customers, clients and
suppliers are trade secrets of the Company, (b) such secrets necessarily
are and will be used in the solicitation of business from the Company’s
customers, and (c) the sale or unauthorized use or disclosure of these
trade secrets (or any other Proprietary Information) that I obtain during the
course of my employment or consulting relationship with the Company would
constitute unfair competition with the Company. Accordingly, I agree that,
during the period of my employment and for a period of one (1) year
following termination of my employment with the Company for any reason, I
will not divert or attempt to divert from the Company, business from any
customer, client or supplier with whom I had contact during the course of my
employment by the Company.

 

10.           No Improper Use of Materials.  During my employment by the Company I will
not improperly use or disclose any confidential information or trade secrets,
if any, of any former employer or any other person to whom I have an obligation
of confidentiality, and I will not bring onto the premises of the Company any
unpublished documents or any property belonging to any former employer or any
other person to whom I have an obligation of confidentiality unless consented
to in writing by that former employer or person.

 

11.           No Conflicting Obligation.  I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company.  I have not entered into, and I agree I will
not enter into, any agreement either written or oral in conflict herewith.

 

12.           Return of Company Documents.  I will promptly deliver to the Company on
termination of my employment with the Company, or at anytime the Company may
request, all drawings, notes, memoranda, notebooks, records, reports, manuals,
specifications, devices, formulas, molecules, codes, cells and documents,
together with all copies thereof, any material containing or disclosing any
Company Inventions, Third Party Information or Proprietary Information of the
Company, and any other documents or things belonging to the Company, including
all copies of such materials, which I may then possess or have in my custody or
under my control.  I further agree that
any property situated on the Company’s premises and owned by the Company,
including disks and other storage media, filing cabinets or other work areas,
is subject to inspection by Company personnel at any time with or without
notice.  Prior to leaving, I will
cooperate with the Company in completing and signing the Company’s termination
statement for technical and management personnel.

 

13.           Legal and Equitable Remedies.  Because my services are personal and unique
and because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or
other equitable relief, without bond, without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

 

4

 

14.           General Provisions.

 

14.1         Governing Law.  This Agreement will be governed by and
construed according to the laws of Taiwan.

 

14.2         Entire Agreement.  This Agreement sets forth the entire
agreement and understanding between the Company and me relating to the subject
matter hereof and supersedes and merges all prior discussions between us.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing signed by the party to be charged.  Any subsequent change or changes in my
duties, salary or compensation will not affect the validity or scope of this
Agreement.  As used in this Agreement,
the period of my employment includes any time during which I may be retained by
the Company as a consultant.

 

14.3         Notices.  Any notices required or permitted hereunder
shall be given to the appropriate party at the address specified below or at
such other address as the party shall specify in writing.  Such notice shall be deemed given upon
delivery to the appropriate address or if sent by certified or registered mail,
three days after the date of mailing.

 

14.4         Severability.  If one or more of the provisions in this
Agreement are deemed unenforceable by law, then the remaining provisions will
continue in full force and effect.

 

14.5         Successors and Assigns.  This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors and is assigns.

 

14.6         Survival.  The provisions of this Agreement shall
survive the termination of my employment and the assignment of this Agreement
by the Company to any successor in interest or other assignee.

 

14.7         Employment.  I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s
right to terminate my employment at any time, with or without any reason.

 

14.8         Waiver.  No waiver by the Company of any breach of
this Agreement shall be a waiver of any preceding or succeeding breach.  No waiver by the Company of any right under
this Agreement shall be construed as a waiver of any other right.  The Company shall not be required to give
notice to enforce strict adherence to all terms of this Agreement.

 

Notwithstanding the date specified above, this
Agreement became or will become effective as of the first day of my employment
with the Company.

 

5

 

I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS
TO INVENTIONS I MAKE DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE
OR USE THE COMPANY PROPRIETARY INFORMATION DURING OR SUBSEQUENT TO MY
EMPLOYMENT.

 

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND
ITS TERMS.  I HAVE COMPLETELY FILLED OUT EXHIBIT A
TO THIS AGREEMENT.

 

	
  Dated: 
                          ,
  2007

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DAVID
  YOUNG

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ID:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED
  AND AGREED TO: 

  	
   

  
	
   

  	
   

  
	
   

  	
  SEMILEDS
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
							

 

6

 

Exhibit 1

 

1.              The
following is a complete list of all developments, discoveries, improvement,
inventions, trade secrets and works of authorship that I have made or conceived
or first reduced to practice alone or jointly with others prior to my
engagement by the Company that are not subject to a confidentiality agreement
that would bar such listing (collectively, the “‘Pre- Employment Inventions”).  I understand that the Company will not
require me to assign any rights I may have in any of the listed Pre-Employment
inventions.  I represent that this list
of Pre-Employment inventions is complete.

 

o                            No
Pre-Employment Inventions to report.

 

o                            See
below:

 

 

o                            Additional
sheets attached.

 

2.              I propose
to bring to my employment the following materials and documents of a former
employer:

 

o                            No
materials or documents.

 

o                            See
below:

 

	
   

  	
   

  
	
   

  	
  David
  Young

  

 

iEXHIBIT 10.6

 

SEMI-PHOTONICS

 

EMPLOYEE AGREEMENT

 

This
Employee Agreement (the “Agreement”) is entered into by and between Jack Yeh (“Employee”)
and Semi-Photonics Co., Ltd., a
company organized under the laws of Republic of China (the “Company”), dated effective
as of August 2, 2005.

 

1.                       Duties; Title.  Employee’s job title and duties may change
from time to time on reasonable notice, based on the needs of the Company and
Employee’s skills, as determined by the Company.  Employee is required to devote Employee’s
full energies, efforts and abilities to the employment, unless the Company
expressly agrees otherwise.

 

2.                       Hours of Work.  Employee is expected to work the number of
hours required to get the job done. 
However, Employee is generally expected to be present during normal
working hours of the Company.

 

3.                       Adjustments and Changes in Employment Status.  Employee hereby acknowledges
that the Company reserves the right to make personnel decisions regarding
Employee’s employment, including but not limited to decisions regarding any
promotion, salary adjustment, transfer or disciplinary action, up to and
including termination, consistent with the needs of the business.

 

4.                       Proprietary Information Agreement.  If Employee has not already done so, Employee
will be required to sign and abide by the terms of the enclosed proprietary
information and inventions agreement, as attached hereto as Exhibit A
(the “Proprietary Information and Inventions Agreement”)

 

5.                       Conflict of Interest.  Employee is not permitted to engage in any
outside business activity, including consulting services, or outside employment
that competes with, or may have the appearance of competing with the interest
of the Company, including but not limited to being employed by, investing in,
or providing times, materials or other services to any entity that buys from,
sells or provide services to, or competes with the Company, or engaging in any
non-Company activity that utilizes any of the Company’s equipment, physical
plant, or confidential information.

 

6.                       Representation and Warranty of Employee.  Employee represents and warrants to the Company that the performance of
Employee’s duties will not violate any confidentiality or employment agreements
with or trade secrets of Employee’s prior employers or any entity.

 

7.                       Employee Benefits.  Employee will be eligible for paid time-off,
vacation and holidays and other benefits in accordance with the Company policy.

 

8.                       Entire Agreement.  This Agreement, and the Proprietary Information and Inventions Agreement  entered between Employee and the Company constitute the entire and
exclusive contract between the parties with respect to the subject matters
herein, and supersede all prior agreements, representations or promises of any
kind, whether written, oral, express or implied between the parties hereto with
respect to the subject matters herein. 
This Agreement cannot be changed unless in writing, signed by Employee
and an authorized officer of the Company.

 

9.                       Severability.  If any term of this Agreement is held to be
invalid, void or unenforceable, the remainder of this Agreement shall remain in
full force and effect and shall in no way be affected; and, the parties shall
use their best efforts to find an alternative way to achieve the same result.

 

 

10.                 Governing
Law; Interpretation.  This Agreement shall be governed by the law
of Republic of China.  This Agreement is
made both in English and Chinese.  The
English version shall control in all interpretation, proceedings and
deliberation in the event of discrepancy between the English and Chinese
versions.

 

11.                 Jurisdiction;
Arbitration.  All disputes, controversies or differences
arising between the parties under or relating to this Agreement that cannot be
settled amicably shall be subject to binding reconciliation or arbitration
administered by Hsinchu Science Park Bureau labor agency.  In the event that the Hsinchu Science Park
Bureau agency is not in the position to come to a final resolution, the matters
shall be subject to the judgment of the Hsinchu District Court as the court of
first instance.  The language used in all
proceedings shall be in English.  The parties shall split all expenses and
costs, excluding attorneys’ fees, associated with arbitration proceedings.

 

IN WITNESS WHEREOF, the
parties have executed this Agreement effective as of the date first above
written.

 

	
  SEMI-PHOTONICS CO., LTD.

  	
   

  	
   

  
	
   

  	
  [print
  name]

  	
  Jack Yeh

  
	
   

  	
  ROC ID No.

  	
   

  
	
   

  	
   

  	
   

  
	
  By :

  	
  /s/
  Chuong Tran

  	
   

  	
  [signature]

  	
  /s/
  Jack Yeh

  
	
   

  	
   

  	
   

  
	
  Name
  : Chuong Tran

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Tel:

  	
   

  
					

 

 

EXHIBIT A

SEMI-PHOTONICS CO., LTD.

 

PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT

 

This Proprietary Information
and Inventions Agreement (this “Agreement”) is entered into between me, Jack
Yeh, and the Company (as defined below), dated
effective August 2, 2005. “Company” shall collectively mean SemiLEDs
Technologies, Inc. (fka SemiLEDs, Inc.), a Delaware corporation,
SemiLEDs Corporation, a Delaware corporation (“Parent”), and Semi-Photonics Co., Ltd.,
a company being formed under the laws of Republic of China and is a wholly-owned
subsidiary of Parent.  In
consideration for the compensation received by me for employment with the
Company, and effective as of the date that my employment commences, I
agree as follows:

 

1.             Obligations Hereunder
Surviving Term and Termination of
Employment.  My
obligations under this Agreement shall survive and continue after any
expiration or termination of my employment or this Agreement.

 

2.             Protection of Confidential
Information.  During and
after the term of my employment, I will regard and preserve as
confidential, and will not divulge to any unauthorized persons, or use for any
unauthorized purposes, any information, matter or thing of secret, confidential
or private nature connected with the products, services, research, development or
business of the Company (“Confidential Information”).  Confidential Information includes, by way of
example but not of limitation, such items as know-how, processes, formulae,
specifications, data, designs, schematics, pricing or cost information, marketing
plans, business plans, strategies, forecasts, projections, telephone lists,
personnel information, salary and compensation information, customer and
supplier information, research projects, plan for future development and any
other information of a similar nature or other information which is not known
to the public.  Confidential Information
also includes the Work Product (as defined in Section 3.1 below), as well
as confidential or proprietary information of a third party to whom Company
owes a duty of confidentiality or non-use.

 

3.             Disclosure and Assignment
to Company of Work Product.

 

3.1           Definition of Work Product.  “Work Product” means any and all ideas,
inventions, improvements, discoveries, know-how, techniques and works of
authorship and other information and materials relating to light emitting
diodes (“LED”) and LED-related products, and to the development, design,
manufacture, production, assembly, packaging, marketing, and distribution
thereof by the Company, whether or not registrable under applicable laws, that
I may develop, conceive, reduce to practice, learn or work on, either alone or
jointly with others, during the period of my employment by the Company.  Work Product shall also include, but shall
not be limited to, all trade secrets and other information relating to the
Company’s business activities and actual or anticipated research and
development.  I acknowledge and agree
that the Company and its assigns will be the exclusive owner of the Work
Product, and all patents, trademarks, copyrights, moral rights and other legal
protections in any and all countries (“IP Rights”) for the Work Product.

 

3.2           Protection of Rights in
Work Product.  I agree to,
and do hereby, assign to the Company any and all IP Rights in the Work
Product.  I further agree to assist the
Company in every proper way to perfect and preserve the Company’s ownership of
all IP Rights in the Work Product in any and all countries.  My obligation under this Section 3.2
shall continue beyond the termination of my employment.  In the event the Company is unable to secure
my signature, I hereby irrevocably designate and appoint the Company and
its duly authorized officers and agents as my agent and attorney in fact, to
act for and in my behalf to execute, verify and file any documents and perform
any act to further the purposes of this Section 3.2 with the same legal
force and effect as if executed by me.  I
hereby waive and quitclaim to the Company any and all claims, of any nature
whatsoever, which I now or may hereafter have for infringement of any IP Rights
assigned hereunder to the Company.

 

 

4.             No Conflicting Obligations.

 

4.1           No Conflict of Interest.  I acknowledge and agree that, during my
employment with the Company, I am not permitted to engage in any outside
business activity, including consulting services, outside employment,
investment in, and providing times or to any entity that buys from, sells or
provide services to, or competes with the Company.  I am also not permitted to engage in any
activity not relating to the Company’s business that utilizes the Company’s
equipment or Confidential Information.

 

4.2           No Breach of Other
Obligations.  I represent
that my performance of all the terms of this Agreement and that my employment
by the Company does not and will not breach any agreement to keep in confidence
proprietary information acquired by me in confidence or in trust prior to my
employment by the Company.  In particular, I
will not disclose to Company, or induce Company to use, any confidential
information or material in violation of the rights of my former employer or any
third party.  I represent and warrant
that I have returned all property and confidential information belonging to all
prior employers.  I have not entered
into, and I agree I will not enter into, any agreement (either written or oral)
in conflict with this Agreement.  If I
leave the employ of the Company, I consent to the notification of my new
employer of my rights and obligations under this Agreement.

 

5.             Dispute Resolution
Procedure.  I agree that
any dispute arising out of or related to the employment relationship between me
and the Company, including the termination of that relationship, shall be
resolved in accordance with the dispute resolution procedures as might be set
forth in an employment agreement between me and the Company.

 

6.             Miscellaneous Clauses.  This Agreement, together with my employment
agreement with the Company, constitutes the entire agreement, and supersedes
all previous or contemporaneous agreements or representations between the
Company and me with regard to its subject matter.  These Agreements cannot be modified or waived
unless in writing, signed by me and an authorized officer of the Company (or
his or her designee).  If any term or
provision of the Agreement is declared invalid, illegal or unenforceable, all
remaining provisions will continue in full force and effect.  This Agreement is governed by and construed
in accordance with the laws of the
Republic of China, excluding that body of law known as conflicts of
law.  This Agreement is made both in both English and Chinese.  The English version shall control in all
interpretation, proceedings and deliberation
in the event of discrepancy between the English and Chinese versions.

 

I certify and acknowledge
that I have carefully read all of the provisions of this Agreement and that I
understand and will fully and faithfully comply with such provisions.  I understand that notwithstanding the date of
execution, this Agreement is effective as of the date my employment relationship
with the Company commenced or will commence.

 

	
  Jack
  Yeh

  	
   

  	
  SEMI-PHOTONICS CO., LTD.

  
	
  [Print name]

  	
   

  	
   

  	
   

  
	
  /s/
  Jack Yeh

  	
   

  	
  By:

  	
  /s/ Chuong Tran

  
	
   

  	
   

  	
   

  	
   

  
	
  [Signature]

  	
   

  	
  Title:

  	
  President

  
	
  Address:

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