EX-99.1 2 a05-11671_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

June 8, 2005

 

 

Mr. Minsheng Lin

c/o 4281 Technology Drive

Fremont, CA 94538

 

Dear Mr. Lin:

 

It is my pleasure to offer you employment with AXT, Inc. (“AXT”), on the following terms.

 

1.             Employment and Duties

 

You will be employed by AXT as the Chief Operating Officer. Your duties and responsibilities and your initial reporting relationship(s) will be as set out in the job description you will receive at or shortly after the time you begin work.  You will devote your full time, ability, attention, energy, knowledge, skill, and productive employment time solely to performing your duties as an employee of AXT.  You will comply with all of AXT’s rules and policies.  However, except as specifically described below, if there is any conflict between any such rule or policy and the terms of this letter, the latter will prevail.

 

2.             Start Date

 

If you accept this offer, your employment with AXT will begin on a mutually agreed upon date.

 

3.             Compensation

 

(a)           Base Salary.  In consideration of your services to AXT, you will receive an initial base salary equal to One Hundred Ninety Eight Thousand Dollars ($198,000), paid in United States dollars in equal biweekly installments, from which AXT will withhold and deduct all applicable taxes to the extent required by law.  The Company will review your salary on your anniversary date thereafter. Your salary may be subject to adjustment based upon various factors including, but not limited to, your performance and the Company’s profitability.

 

(b)           Stock Options.  Subject to approval by the Board of Directors, you will be granted an option to purchase One Hundred Thousand (100,000) shares of AXT’s common stock

 

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pursuant to the terms of its currently effective stock option plan, the terms of which shall supercede any inconsistent term of this letter.  The option will have an exercise price equal to the Market Closing Price of AXT’s common stock on your first day of employment with the Company.  Shares subject to this grant shall vest over a four (4) year period according to the following schedule: 1) Twenty-Five percent (25%) of the option will vest upon the successful completion of your first year’s employment; 2) Beginning in your second year of employment, the balance of the option will vest in equal monthly installments upon your successful completion of each of the next thirty-six (36) months employment.  This stock option grant is conditioned upon your execution of the Company’s standard form of stock option agreement, which will govern your stock option.  Additional grants may be made based on performance at the Company’s discretion.

 

(c)           Business Expenses.  You will be entitled to reimbursement by AXT for such customary, ordinary, and necessary business expenses as are incurred by you in the performance of your duties and activities associated with promoting or doing AXT’s business.  All expenses as described in this paragraph will be reimbursed only upon presentation by you of such documentation as may be reasonably necessary to substantiate that all such expenses were incurred in the performance of your duties.

 

(d)           Vacation and Sick Leave.  You will accrue vacation of twenty (20) days per year for five (5) years, twenty-five (25) days for ten (10) years and thirty (30) days thereafter and sick leave pursuant to AXT’s policies on the same terms as other, similarly situated employees, provided that at no time will you be permitted to have accrued more than thirty (30) days of vacation.  At any time you accrue this amount of vacation, you will not earn additional vacation until you use vacation time so that your accrual drops below this thirty (30) day maximum.  You agree to schedule your vacations at times that are approved by your direct supervisor.

 

(e)           Benefits.  You will be eligible for health insurance, retirement, and other benefits on the same basis as other similarly situated employees of AXT.

 

(f)            Housing Allowance.  You will be reimbursed for your cost in securing a temporary residence in China in an amount not to exceed Ten Thousand (10,000) RMB per month this reimbursement will commence upon the execution of a lease agreement and will be paid by AXT/TM until such time as residency in China is no longer required.

 

(g)           Travel Allowance.  You will be reimbursed for your spouse’s round trip air fare from Beijing, China, to San Francisco, California USA once per quarter not to exceed Business Class fare.

 

4.             Outside Activities

 

While employed by AXT, and unless otherwise agreed in writing, you will not:  1) Undertake any other form of employment or other activity that may negatively affect the performance of your duties as an employee of AXT; 2) Directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, shareholder, corporate officer, director, or in any other capacity, engage or assist any third party in engaging in any business

 

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competitive with the business of AXT or any parent, subsidiary or affiliate.  Following your employment with AXT, you will not engage in unfair competition with AXT or any parent, subsidiary or affiliate, aid others in any unfair competition with AXT or any parent, subsidiary or affiliate, in any way breach the confidence that AXT or any parent, subsidiary or affiliate has placed in you.

 

5.             Proprietary Rights and Confidentiality, Code of Business Conduct and Ethics, and Insider Trading Policy.

 

As a condition of your beginning employment with AXT, you must sign the Proprietary Information and Inventions Agreement, Code of Business Conduct and Ethics, and the Insider Trading Policy, all of which are attached to this letter as Exhibit A.  Your trading in AXT stock will be subject to the restrictions of the Company’s Insider Trading Policy.

 

6.             Proof of Right to Work

 

As a further condition of your beginning employment with AXT, you must submit proof of your right to be employed in the United States at the time you start work.

 

7.             Termination of Employment

 

Your employment with AXT can end in the following ways, among others:

 

(a)           By Disability.  If, in the sole opinion of AXT’s President, you are prevented from properly performing your duties by reason of any physical or mental incapacity for a period of more than ninety (90) days in the aggregate in any twelve-month period, then to the extent permitted by law, your employment with AXT shall terminate. AXT’s total liability in the event of such disability termination shall be limited to payment of your salary and other earned compensation through the effective date of your disability termination.

 

(b)           For Cause.  Your employment may be terminated by AXT under any one of the following circumstances, any of which shall be deemed, and shall be sufficient to constitute, termination “for cause”:

 

(i)            You commit any act of fraud, misappropriation, theft, dishonesty, or other act of moral turpitude;

 

(ii)           You breach or neglect the duties you are required to perform under the terms of this Agreement.

 

(iii)          You engage in willful misconduct in the performance of your duties hereunder, commit insubordination (in the sole, reasonable discretion of your supervisor or AXT’s Board of Directors), or otherwise fail to perform your duties hereunder as directed by your supervisor or AXT’s Board of Directors.

 

(iv)          You are guilty of, convicted of, or plead guilty or nolo contendre to, a felony, crime of moral turpitude or other serious offense.

 

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AXT’s total liability to you in the event of termination of your employment under this section shall be limited to the payment of your salary and other earned compensation through the effective date of termination.

 

(c)           Without Cause.  AXT reserves the right to terminate you at any time, without cause or for any reason whatsoever upon written notice to you. AXT’s total liability to you in the event of termination of your employment under this section is limited to the payment of your salary and other earned compensation through the effective date of termination, plus severance in an amount that equals twelve (12) months of your then current salary.  You hereby agree that AXT may dismiss you under this paragraph (c) without regard:  (1) to any general or specific policies (whether oral or written) of AXT relating to the employment or termination of its employees; or (ii) to any statements made to you, whether made orally or contained in any document pertaining to your relationship with AXT.

 

(d)           Mutual Consent. Your employment will be terminated upon mutual written consent of AXT and you.  AXT’s total liability to you in the event of termination of employment under this subsection shall be limited to the payment of your salary and other earned compensation through the effective date of termination.

 

(e)           Your Resignation.  You may terminate you employment by providing AXT with six (6) weeks’ written notice of such termination.  AXT’s total liability to you in the event of termination of employment under this subsection will be limited to the payment of your salary and other earned compensation through the effective date of termination.

 

(f)            Offices.  Upon termination of employment for any reason whatsoever, you shall be deemed to have resigned from all offices and directorships then held with AXT.

 

8.             Arbitration

 

(a)           Arbitration Required.  Any dispute, claim, or controversy arising out of or related to your employment with AXT or the termination of that employment shall be resolved exclusively through final and binding arbitration.  This agreement to arbitrate includes all state, federal and foreign statutory or common law claims, including but not limited to discrimination claims arising under the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act or claim under The California Labor Code.  Any demand for arbitration must be made within one (1) year of the termination of employment, provided, however, that if a claim arose under a statute providing for a longer time to file a claim that statute shall govern.

 

(b)           Costs or Fees.  All administrative costs of the arbitration, such as arbitrator and court reporting fees, shall be divided equally between AXT and you, unless otherwise required by law.  Each party shall bear its other costs of arbitration, including attorney’s fees, provided, however, that the arbitrator(s) may award attorney’s fees to the prevailing party under the provisions of any applicable law.

 

(c)           Representation.  You may, but are not required to, have an attorney represent you in preparation for and during the arbitration.  If you decide to use an attorney, you

 

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shall be solely responsible for the payment of attorney’s fees and costs, subject to any statutory authority of the arbitrator to order reimbursement by AXT.

 

(d)           Arbitration Procedure.  All disputes subject to arbitration under this Agreement shall be resolved pursuant to the then current Employment Arbitration Rules and Procedures of the Judicial Arbitration and Mediation Service, and judgment on the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof.  The arbitration shall have the authority to make any award that would be made by a court, but the arbitrator shall not have the authority to amend, modify, supplement or change the terms and conditions of employment set forth in this letter or AXT’s policies.

 

(e)           Location.  The location of the arbitration shall be Alameda County or San Francisco, California.

 

(f)            Waiver of Right to Jury Trail.  You agree that if for any reason any dispute or controversy between you and AXT arising from or related to your employment or the termination of your employment is resolved in court rather than through arbitration, then trial of that dispute will be to a judge sitting without a jury, and you specifically waive any right you may have to trial by jury of any such dispute or controversy.

 

(g)           Survival.  Your agreement to arbitrate and the terms of this Section 8 will survive the termination of your employment with AXT.

 

(h)           Employee Acknowledgment.  YOU UNDERSTAND THAT YOU ARE ELECTING TO RESOLVE ANY DISPUTE, CLAIM OR CONTROVERSY DESCRIBED IN SECTION 8(a), ABOVE, IN AN ARBITRAL FORUM RATHER THAN A JUDICIAL FORUM AND THAT YOU ARE GIVING UP THE RIGHT TO A JURY TRIAL OF ANY SUCH DISPUTE, CLAIM, OR CONTROVERSY.

 

9.             Modification

 

Any modification of the terms of this letter will be effective only if and to the extent such modification is in a writing and signed by you and by the President of AXT.

 

10.          Assignment

 

In view of the personal nature of the services you will perform by AXT, you cannot assign or transfer any of your rights or obligations under this agreement.

 

11.          Severability

 

If any of the provisions (or any part of any provision) of this letter are found to be unenforceable, then the remaining provisions (or part(s) thereof) shall nonetheless remain in full force and effect.

 

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12.          Entire Agreement

 

The terms of this letter constitute the entire agreement between AXT and you pertaining to the subject matter hereof and supersede all prior or contemporaneous written or verbal agreements and understandings in connection with the subject matter hereof.

 

13.          Governing Law

 

Your rights and obligations as an employee of AXT will be governed by the laws of the State of California without regard to the choice-of-law provisions thereof.  In any action to enforce an arbitration award under Section 8, AXT and you specifically consent to the jurisdiction of the courts located in Alameda County, California.

 

If you wish to accept this offer of employment, please sign in the space provided below and please also sign the Proprietary Information and Inventions Agreement and Code of Business Conduct and Ethics that are attached.  By signing below, you acknowledge that you have received no inducements or representations other than those contained in this letter that caused you to accept this offer of employment.  We look forward to your joining us at AXT.

 

 

Sincerely.

 

 

 

/s/ Phil Yin

 

 

 

 

Dr. Phil Yin

 

Chief Executive Officer

 

 

The foregoing offer of employment is accepted:

 

 

/s/ Minsheng Lin

 

June 10, 2005

 

 

 

Minsheng Lin

Date

 

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