Employment Agreement

Change in Control Agreement

 

 

 

 

Description: LOGO

 

September 24, 1998

 

Richard K. Williams

10292 Norwich Ave

Cupertino CA 95014

 

Dear Richard:

 

On behalf of Advanced Analogic Technologies Incorporated (the “Company”), I am pleased to offer you the position of Chief Technical Officer (CTO) and Vice President, Engineering & Product Strategy. Speaking for myself, as well as the Board Of Directors, we are very impressed with your credentials and we look forward to your future success in this position.

 

The terms of your position with the Company are as set forth below:

 

POSITION

 

 

a.

You will become the CTO and VP of Engineering & Product Strategy working out of the Company’s headquarters office in Sunnyvale, California.

 

 

b.

As Chief Technical Officer (CTO) you will have responsibility, along with the CEO, for defining and setting the technical and strategic direction of the Company, including establishing plans, budgets, procedures, and methods for developing Company proprietary technology, and in applying such technologies to the design and development of products. Strategic decisions of significance require approval of the board of directors (BOD). Other responsibilities of the CTO include participation in the Company’s BOD meetings, and to secure a strong intellectual property position for the Company. As CTO, you report both the CEO and to the Board of Directors.

 

 

c.

As Vice President (VP) of Engineering & Product Strategy, you will have overall responsibility for the definition of new products (working in conjunction with marketing), and to implement such products from design concept through production release. As VP, the design, CAD, process development and technology groups will

 

Advanced Analogic Technologies Inc. 1250 Oakmead Parkway, Suite 310, Sunnyvale CA 94086

(408) 524-9684 FAX (408) 524-9689 corporate@analogictech.com


 

report to you. You will report to the Company’s president.

 

 

d.

You will, subject to BOD approval, take a position as a Board member of the Company, with full voting rights.

 

 

e.

You will write and produce a formal Company business plan detailing the strategy, technology, product, and business plans for the Company.

 

 

f.

In the capacity of Board meetings and other official Company actions, you will, subject to BOD approval, serve as Company Secretary.

 

 

g.

You will assume the interim role of managing the Company’s sales and marketing departments until a suitable director or VP can be hired, and will fill this role on a temporary basis whenever the position is vacant.

 

 

h.

You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company.

 

START DATE

 

Subject to fulfillment of any conditions imposed by this letter agreement, you will commence this new position with the Company on October 1, 1998.

 

PROOF OF RIGHT TO WORK

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

COMPENSATION

 

 

a.

Base Salary You will be paid $120,000 on an annualized basis. Your salary will be payable monthly pursuant to the Company’s regular payroll policy (or in the same manner as other officers of the Company)

 

 

b.

Deferred Bonus As an officer of the Company accepting a salary below industry standards, and in compensation of your financial sacrifice, you will receive a quarterly bonus in the amount of $16,000 per quarter commencing upon your hire date, but whose payment is deferred to a later date when the Company’s financial strength is improved. The total deferred bonus accrues

 

Advanced Analogic Technologies Inc. 1250 Oakmead Parkway, Suite 310, Sunnyvale CA 94086

(408) 524-9684 FAX (408) 524-9689 corporate@analogictech.com


 

quarterly until such time that the Company; performs a public offering, is acquired, is liquidated, or becomes profitable, wherein immediately thereafter, the accrued balance will be paid to you in full. The first and last quarters for which the deferred bonus accrues will be paid pro rata. The total deferred bonus owed you will not be held in any special fund or escrow account. In the event of liquidation of the Company, the accrued balance owed you will take preference over debts owed creditors. If the Company remains in operation after the deferred balance is paid in full, you may, thereafter elect to continue to receive the bonus paid quarterly, or to convert the income into an equivalent-value regular salary paid monthly. The president of the Company reserves the right to release a portion of the accrued funds any time in advance of the mandatory payment conditions being met. Tax withholding occurs at the time that you receive payment.

 

 

c.

Bonus You will be eligible to receive an incentive bonus based on the performance of the Company and on your individual contributions. The bonus plan for executives will be defined at a later date and is subject to BOD approval.

 

 

d.

Annual Review Your base salary will be reviewed at the end of each calendar year as part of the Company’s normal salary review process.

 

 

e.

Car Expenses Your car expenses will be covered in the exact amount as submitted in a monthly itemized expense report including car lease, insurance, car registration, regular scheduled maintenance, as well as reasonable gasoline and cleaning costs. If you elect not to submit a detailed expense report, a fixed car allowance of $ 800 /month will be paid, in lieu of a detailed expense report.

 

 

f.

Conference Travel Aside from normal business travel expenses, the Company will pay for your attendance and participation in relevant symposia and conferences including travel, hotel, and conference registration expenses, as approved by the president. At a minimum, you will be reimbursed for attending two specific conferences every year, namely, the International Electron Device Meeting (IEDM) and the International Symposium on Power Semiconductor Devices & ICs (ISPSD), both relevant to the Company’s business.

 

 

g.

One-time Hire-On Bonus To partially compensate you for personal revenue loss from terminating your previous employment (bonuses, forgivable

 

Advanced Analogic Technologies Inc. 1250 Oakmead Parkway, Suite 310, Sunnyvale CA 94086

(408) 524-9684 FAX (408) 524-9689 corporate@analogictech.com


 

loans, etc.) so that you may join the Company more expeditiously, the Company will pay you a one-time hire-on bonus in the amount of $120,000 (gross pay). In return for this one-time bonus, you will write and deliver to the Company the formal business plan described in item (e) of the “Roles” section of this agreement. The amount will be paid no sooner than the close of the C round of financing. The whole amount will be paid no later than 3 years after your hire date, or when the Company makes a profit, or when the Company goes public, or when the Company is acquired, or when the Company is liquidated, whichever comes first. No money will be held in reserve for this expense. In the event of liquidation of the Company, the entire balance owed you will take preference over debts owed creditors.

 

STOCK OPTIONS

 

In connection with the commencement of your employment, the Company will recommend that the Board of Directors grant you an option to purchase Company’s Common Stock (“Shares )

 

 

a.

650,000 shares of the Series B stock. The option is $0.10 per share. These options will vest at the rate of 25% per year. Vesting will, of course, depend on your continued employment with the Company. The option will be an incentive stock option to the maximum extent allowed by the tax code and will be subject to the terms of the Company’s Operating Plan and the Stock Option Agreement between you and the Company.

 

 

b.

191,837 shares of the Series C stock. The option is $0.60 per share. These options will vest at the rate of 25% per year. Vesting will, of course, depend on your continued employment with the Company. The option will be an incentive stock option to the maximum extent allowed by the tax code and will be subject to the terms of the Company’s Operating Plan and the Stock Option Agreement between you and the Company.

 

 

c.

As an officer of the Company, your sale of Company stock is subject to restrictions of the Securities & Exchange Commission including SEC rule 144.

 

Advanced Analogic Technologies Inc. 1250 Oakmead Parkway, Suite 310, Sunnyvale CA 94086

(408) 524-9684 FAX (408) 524-9689 corporate@analogictech.com


BENEFITS

 

 

a.

Medical and Dental Benefits The Company will provide you with standard medical and dental insurance benefits.

 

 

b.

Insurance Benefits The Company has Life and Accidental Death & Dismemberment insurance of $50,000. In addition, in the cause of normal Company business, the Company currently indemnifies all officers and directors to the maximum extent permitted by law, and you will be requested to enter into the Company’s standard form of Indemnification Agreement giving you such protection. Pursuant to the Indemnification Agreement, the Company will agree to advance any expenses for which indemnification is available to the extent allowed by applicable law.

 

 

c.

401K The company offers a 401K plan with matching. The Company will match your contribution (yearly) according to your current 401K plan, i.e. dollar for dollar on the first 2% contribution and $ 0.50 for every dollar for the next 2% contribution. Open enrollment is once / quarter.

 

 

d.

Vacation You will be entitled to two weeks paid vacation per year, pro-rated for the remainder of this calendar year.

 

OTHER INCENTIVES

 

 

e.

Author’s Incentive Program You will be eligible to participate in the Company’s Author Incentive Program that financially rewards employees for their contributions to technical articles, application notes and conference papers. The terms of the Author Incentive Program are subject to change.

 

 

f.

Patent Incentive Program You will be eligible to participate in the Company’s Patent Incentive Program. The program financially rewards employees for filing and prosecuting patent protection on inventions and intellectual property. The terms of the Author Incentive Program are subject to change.

 

CONFIDENTIAL INFORMATION & INVENTION ASSIGNMENT AGREEMENT

 

Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution, and delivery to an officer of the Company, of the Company’s Confidential Information

 

Advanced Analogic Technologies Inc. 1250 Oakmead Parkway, Suite 310, Sunnyvale CA 94086

(408) 524-9684 FAX (408) 524-9689 corporate@analogictech.com


and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the “Confidentiality Agreement” ) .

 

SEVERANCE AGREEMENT

 

If your employment is terminated by the Company or its successor for any reason other than cause, you will be entitled to receive continuation of your base salary and insurance benefits for 2 weeks following the date of termination of your employment. At such time, any balance the Company owes you of the one-time hire-on bonus or the deferred bonus accrual shall be paid in full.

 

CONFIDENTIALITY OF TERMS

 

You agree to follow the Company’s strict policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice.

 

AT-WILL EMPLOYMENT

 

Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability, except when explicitly covered as a condition in this employment contract or in the Confidentiality Agreement.

 

Advanced Analogic Technologies Inc. 1250 Oakmead Parkway, Suite 310, Sunnyvale CA 94086

(408) 524-9684 FAX (408) 524-9689 corporate@analogictech.com


We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement.

 

 

 

 

Very truly yours,

 

ADVANCED ANALOGIC TECHNOLOGIES, INC.

 

 

 

 

/s/ Alexander Choi

By: Alexander Choi

Title: President

 

 

 

 

ACCEPTED AND AGREED:

 

 

Sept 24, 1998

 

 

Date

 

 

 

 

/s/ Richard K. Williams

 

  

Signature

 

Richard K. Williams

 

Advanced Analogic Technologies Inc. 1250 Oakmead Parkway, Suite 310, Sunnyvale CA 94086

(408) 524-9684 FAX (408) 524-9689 corporate@analogictech.com

 

 

 

 

 

FORM OF CHANGE OF CONTROL AGREEMENT (CEO AND CFO)

Exhibit 10.15

 

ADVANCED ANALOGIC TECHNOLOGIES INCORPORATED

 

CHANGE OF CONTROL AGREEMENT

 

This Change of Control Agreement (the “Agreement”) is made and entered into by and between                                          (the “Executive”) and Advanced Analogic Technologies Incorporated, a California corporation (together with the successor entity resulting from the reincorporation of Advance Analogic Technologies Incorporated in Delaware, the “Company”), effective as of                         , 2005.

 

R E C I T A L S

 

A. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to the Executive and can cause the Executive to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication and objectivity of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control of the Company.

 

B. The Board believes that it is in the best interests of the Company and its shareholders to provide the Executive with an incentive to continue his employment and to motivate the Executive to maximize the value of the Company upon a Change of Control for the benefit of its shareholders.

 

C. Certain capitalized terms used in the Agreement are defined in Section 4 below.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereto agree as follows:

 

1. Term of Agreement. This Agreement shall terminate upon the date that all obligations of the parties hereto with respect to this Agreement have been satisfied.

 

2. At-Will Employment. The Company and the Executive acknowledge that the Executive’s employment is and shall continue to be at-will, as defined under applicable law. If the Executive’s employment terminates for any reason, including (without limitation) any termination prior to a Change of Control, the Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company’s established Executive plans and practices or pursuant to other agreements with the Company.

 

3. Benefits.

 

(a) Termination Following A Change of Control. In the event that a Change of Control of the Company occurs and during the period beginning on the closing date of the transaction giving rise to such Change of Control and ending 12 months after such closing date, the


Executive’s employment with the Company (or the successor entity in such Change of Control transaction) is either (a) terminated by the Company (or its successor entity) without Cause or (b) is Constructively Terminated by the Executive, then (i) one hundred percent (100%) of all unvested Stock Rights as of such date shall become fully vested on the date of such termination, (ii) Executive will be entitled to receive an additional twelve (12) months salary following termination of Executive’s employment in accordance with the Company’s existing payroll procedures and (iii) Executive will be entitled to receive an additional twelve (12) months of Company benefits following termination of Executive’s employment in accordance with the Company’s existing written benefits plans and practices.

 

(b) Termination For Cause. If the Executive’s employment terminates by reason of the Executive’s voluntary resignation (and is not a Constructive Termination), or if the Executive is terminated for Cause, then the Executive shall not be entitled to receive the accelerated vesting of Stock Rights, severance payments or benefits set forth in Section 3(a) above.

 

(c) Termination Apart from Change of Control. In the event the Executive’s employment is terminated for any reason, either prior to the occurrence of a Change of Control or after the twelve (12)-month period following a Change of Control, then the Executive will be entitled to receive severance and any other benefits only as may then be established under the Company’s existing written severance and benefits plans and practices or pursuant to other written agreements with the Company.

 

4. Definition of Terms. The following terms referred to in this Agreement shall have the following meanings:

 

(a) Cause. “Cause” means (i) the Executive’s failure to perform (other than due to mental or physical disability or death) the duties of Executive’s position (as they may exist from time to time) to the reasonable satisfaction of the Company (or the successor corporation) after receipt of a written warning and failure to cure any such non-performance within ten business days of receipt of such written warning; (ii) any act of dishonesty taken in connection with the Executive’s responsibilities as an Executive that is intended to result in such Executive’s personal enrichment; (iii) the Executive’s conviction or plea of no contest to a crime that negatively reflects on the Executive’s fitness to perform Executive’s duties or harms the Company’s (or the successor corporation’s) reputation or business; (iv) willful misconduct by the Executive that is injurious to the Company’s (or the successor corporation’s) reputation or business; or (v) the Executive’s willful violation of a material Company employment policy. For purposes of this definition, an act or failure to act will be deemed “willful” if effected not in good faith or without reasonable belief that such action or failure to act was in the best interests of the Company (or the successor corporation).

 

(b) “Change in Control” means the occurrence of any of the following events:

 

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

 

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(ii) The approval by shareholders of the sale or disposition by the Company of all or substantially all of the Company’s assets; or

 

(iii) A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or

 

(iv) The approval by shareholders of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

 

For purposes of clauses (i) and (iii) above, such Change of Control shall be deemed to have occurred on the date on which the transaction closes; for the purpose of clauses (ii) and (iv) above, such Change of Control shall be deemed to have occurred on the date on which the Company’s shareholders approve a transaction described in that clause. Notwithstanding the foregoing, the reincorporation of the Company in Delaware (or any other jurisdiction) shall not constitute a Change of Control for purposes of this Agreement.

 

(c) Constructive Termination. “Constructive Termination” shall mean the occurrence of any of the following without the Executive’s express written consent (i) the assignment to the Executive of any duties or the reduction of the Executive’s duties, either of which results in a significant diminution in the Executive’s position or responsibilities in effect immediately prior to such assignment, or the removal of the Executive from such position and responsibilities, provided, however that changes in the circumstances of employment which are solely the result of changes in corporate legal structure resulting directly from the Change of Control shall not constitute a basis for Constructive Termination; (ii) a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to the Executive immediately prior to such reduction; (iii) a material reduction by the Company in the cash compensation of the Executive as in effect immediately prior to such reduction; (iv) a material reduction by the Company in the kind or level of employee benefits to which the Executive is entitled immediately prior to such reduction with the result that the Executive’s overall benefits package is significantly reduced; or (v) the relocation of Executive’s principal place of employment to a facility or a location more than 50 miles from the Executive’s then present location.

 

(d) Stock Rights. “Stock Rights” shall mean all options or rights to acquire shares of Company Common Stock, or stock appreciation rights, performance units or performance shares (whether such awards are payable in cash, shares of Company Common Stock or otherwise), under plans, agreements or arrangements which are compensatory in nature, including, without limitation, the Company’s 1998 Stock Plan and 2005 Equity Incentive Plan, and any restricted stock purchase agreement between the Company and the Executive.

 

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5. Successors.

 

(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 5(a) or which becomes bound by the terms of this Agreement by operation of law.

 

(b) Executive’s Successors. The terms of this Agreement and all rights of the Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

6. Notice.

 

(a) General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Executive, mailed notices shall be addressed to the Executive at his or her home address most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

 

(b) Notice of Termination. Any termination by the Company for Cause or by the Executive as a result of a voluntary resignation or a Constructive Termination shall be communicated by a notice of termination to the other party hereto given in accordance with Section 6(a) of this Agreement. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than 30 days after the giving of such notice). The failure by the Executive to include in the notice any fact or circumstance which contributes to a showing of Constructive Termination shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing Executive’s rights hereunder.

 

7. Miscellaneous Provisions.

 

(a) No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Executive may receive from any other source.

 

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(b) Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

(c) Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

(d) Whole Agreement. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. This Agreement represents the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior arrangements and understandings regarding the same. No future agreements between the Company and the Executive may supersede this Agreement, unless they are in writing and specifically mention this Section 7(d).

 

(e) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California (with the exception of its conflict of laws provisions).

 

(f) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

 

(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

 

*  *  *

 

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IN WITNESS WHEREOF, each of the parties has executed this Change in Control Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

 

 

 

 

 

 

COMPANY

 

ADVANCED ANALOGIC TECHNOLOGIES INCORPORATED

 

 

 

 

 

By:

 

 


 

 

Title:

 

 


 

 

Date:

 

 


 

 

EXECUTIVE

 

 


 

[Signature Page to Change of Control Agreement]