Employment Agreement

Amendment to Employment Agreement

Amended Employment Agreement

Change in Control and Severance Plan

 

Exhibit 10.1

ATMEL CORPORATION

STEVEN LAUB EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is entered into as of August 6, 2006, by and between Atmel Corporation (the “Company”) and Steven Laub (“Executive”).

     1. Duties and Scope of Employment.

          (a) Positions and Duties. As of August 7, 2006 (the “Effective Date”), Executive will commence service as the Company’s Chief Executive Officer and President. Executive will report to the Company’s Board of Directors (the “Board”). As of the Effective Date, Executive will render such business and professional services in the performance of his duties, consistent with Executive’s position within the Company, as will reasonably be assigned to him by the Board. The period Executive is employed by the Company under this Agreement is referred to herein as the “Employment Term”.

          (b) Board Membership. As of the Effective Date, Executive serves as a member of the Board. At each annual meeting of the Company’s stockholders during the Employment Term, the Company will nominate Executive to serve as a member of the Board. Executive’s service as a member of the Board will be subject to any required stockholder approval. Upon the termination of Executive’s employment for any reason, unless otherwise requested by the Board, Executive will be deemed to have resigned from the Board (and all other positions held at the Company and its affiliates) voluntarily, without any further required action by Executive, as of the end of Executive’s employment and Executive, at the Board’s request, will execute any documents necessary to reflect his resignation.

          (c) Obligations. During the Employment Term, Executive, except as provided below, will devote Executive’s full business efforts and time to the Company and will use good faith efforts to discharge Executive’s obligations under this Agreement to the best of Executive’s ability and in accordance with each of the Company’s written corporate guidance and ethics guidelines, conflict of interests policies and code of conduct. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation, or consulting activity for any direct or indirect remuneration without the prior approval of the Board (which approval will not be unreasonably withheld); provided, however, that Executive may, without the approval of the Board, (i) serve in any capacity with any civic, educational, professional, industry or charitable organization, provided such services do not interfere with Executive’s obligations to Company, and (ii) serve on the board of directors of one (1) company of his choosing, with such company to be reasonably acceptable to the Board (currently Teridian Semiconductor Corporation, as to which Executive is paid by Golden Gate Capital and such service will not constitute a violation of this Section 1(c)).

               (i) Executive hereby represents and warrants to the Company that Executive is not party to any contract, understanding, agreement or policy, written or otherwise, that would be breached by Executive’s entering into, or performing services under, this Agreement.

 

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Executive further represents that he has disclosed to the Company in writing all threatened, pending, or actual claims that are unresolved and still outstanding as of the Effective Date, in each case, against Executive of which he is aware, if any, as a result of his employment with any previous employer or his membership on any boards of directors.

               (d) Other Entities. Executive agrees to serve and will be appointed, without additional compensation, as an officer and director for each of the Company’s subsidiaries, partnerships, joint ventures, limited liability companies and other affiliates, including entities in which the Company has a significant investment as determined by the Company. As used in this Agreement, the term “affiliates” will mean any entity controlled by, controlling, or under common control of the Company.

     2. At-Will Employment. Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive. However, as described in this Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination of employment.

     3. Compensation.

          (a) Base Salary. Commencing with the Effective Date, the Company will pay Executive an annual salary of $700,000 as compensation for his services (such annual salary, as is then effective, to be referred to herein as “Base Salary”). Executive’s Base Salary will be subject to annual review (subject to the provisions of Section 10(e)(iii) of this Agreement). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and will be subject to the usual, required withholdings.

          (b) Annual Incentive. Executive will be eligible to receive annual cash incentives payable for the achievement of performance goals established by the Board or by the Compensation Committee of the Board (the “Committee”). During the Employment Term, Executive’s target annual incentive (“Target Annual Incentive”) will be not less than 100% of Base Salary. The actual earned annual cash incentive, if any, payable to Executive for any performance period will depend upon the extent to which the applicable performance goal(s) specified by the Committee with the input of Executive are achieved or exceeded and will be adjusted for under- or over-performance. Any incentive earned during the remainder of fiscal 2006 will be pro-rated based on Executive’s hire date (calculated by multiplying any annual incentive earned by Executive by a fraction with a numerator equal to the number of days inclusive between the Effective Date and December 31, 2006 and a denominator equal to 365).

          (c) Equity Awards.

               (i) As of August 7, 2006, Executive will be granted a nonstatutory stock option to purchase 1,450,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq National Market (“Nasdaq”) for the common stock of the Company on August 7, 2006 (the “Initial Option”). The Initial Option will be granted under and subject to the terms, definitions and provisions of the Company’s 2005 Stock Plan (the “Plan”) and

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will be scheduled to vest at a rate of 25% of the shares subject to the Initial Option on the first anniversary of the grant and 1/48 of the shares will be scheduled to vest monthly thereafter assuming Executive’s continued employment with the Company on each scheduled vesting date. Except as provided in this Agreement, the Initial Option will be subject to the Company’s standard terms and conditions for options granted under the Plan.

               (ii) The Company will use its commercially reasonable best efforts to secure approval from Nasdaq for the grant of an additional option to purchase 2,550,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq for the common stock of the Company on the date of grant (the “Stand-Alone Grant”). Subject to Nasdaq approval, the Stand-Alone Grant will be granted under a non-stockholder approved arrangement outside of any Company equity plan. Subject to the provisions of this Agreement, the terms and conditions of the Stand-Alone Grant will be materially similar to those of the Initial Option (except that it will not be granted under a Company equity plan), and will be scheduled to vest at a rate of 25% of the shares subject to the award on August 7, 2007, and the remainder of the shares will be scheduled to vest pro-rata monthly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. Following the issue of the Stand-Alone Grant, the Company will use commercially reasonable best efforts to register the shares underlying the Stand-Alone Grant on Form S-8 in order to permit resale thereof.

               (iii) If the Company does not receive Nasdaq approval of the Stand-Alone Grant by December 31, 2006, then on January 2, 2007 (assuming Executive is still employed by the Company), the Company will grant to Executive a nonstatutory stock option to purchase 500,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq for the common stock of the Company on January 2, 2007 (the “Additional Option”). The Additional Option will be granted under and subject to the same terms, definitions and provisions applicable to the Initial Option, and will be scheduled to vest at a rate of 25% of the shares subject to the award on August 7, 2007, and the remainder of the shares will be scheduled to vest pro-rata monthly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. In addition, if Nasdaq approval of the Stand-Alone Grant is not obtained, on January 2, 2007 (assuming Executive is still employed by the Company), the Company will grant 1,000,000 shares of restricted stock (or restricted stock units) to Executive under and subject to the same terms, definitions and provisions applicable to the Initial Option assuming exercise thereof, except that such shares will be scheduled to vest at a rate of 25% of the shares subject to the award vesting on August 7, 2007, and the remainder of the shares will be scheduled to vest pro-rata quarterly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. The Company agrees (to the extent permitted by the Company’s Insider Trading Policy), at the request of Executive, to facilitate the implementation by Executive of a 10b5-1 trading plan to accommodate Executive’s ability to sell such portion of the relevant shares as may be necessary to cover Executive’s tax withholding obligations with respect to such vesting, if any, at such tax rate as Executive may specify. If the Company’s Insider Trading Policy does not permit the implementation of a 10b5-1 trading plan, Executive will be allowed to have the Company withhold the number of shares necessary to satisfy his minimum tax withholding obligation.

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     4. Employee Benefits.

          (a) Generally. Executive will be eligible to participate in accordance with the terms of all Company employee benefit plans, policies and arrangements that are applicable to other executive officers of the Company, as such plans, policies and arrangements may exist from time to time.

          (b) Vacation. Executive will be entitled to receive paid annual vacation in accordance with Company policy for other senior executive officers, but with vacation accrual of not less than four (4) weeks per year.

     5. Expenses. The Company will reimburse Executive for reasonable travel, entertainment and other expenses incurred by Executive in the furtherance of the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.

     6. Termination of Employment. In the event Executive’s employment with the Company terminates for any reason, Executive will be entitled to any (a) unpaid Base Salary accrued up to the effective date of termination; (b) unpaid, but earned and accrued annual incentive for any completed fiscal year as of his termination of employment; (c) pay for accrued but unused vacation; (d) benefits or compensation as provided under the terms of any employee benefit and compensation agreements or plans applicable to Executive; (e) unreimbursed business expenses required to be reimbursed to Executive; and (f) rights to indemnification Executive may have under the Company’s Articles of Incorporation, Bylaws, this Agreement, and/or separate indemnification agreement, as applicable. In the event Executive’s employment with the Company terminates for any reason, Executive will be entitled to exercise any outstanding stock options for at least twelve (12) months after the later of such termination of employment or the date upon which Executive ceases to provide any other services to the Company or any of its affiliates, whether as a director, independent contractor or otherwise, but in no event later than the applicable scheduled expiration date of such award (in the absence of any termination of employment) as set forth in the award agreement. In the event Executive’s employment with the Company terminates due to death or Disability, then there will be acceleration of vesting of any then unexpired and unvested equity awards (including, but not limited to, awards of stock appreciation rights or restricted stock units) held by Executive based on the vesting that Executive would have achieved had Executive remained in the employ of the Company for an additional twelve (12) months (provided that, if Executive’s employment with the Company terminates due to death or Disability prior to January 2, 2007, then “twenty-four (24) months” will be substituted for “twelve (12) months” in this sentence). In addition, if the termination is by the Company without Cause or Executive resigns for Good Reason, Executive will be entitled to the amounts and benefits specified in Section 7.

     7. Severance.

          (a) Termination Without Cause or Resignation for Good Reason other than in Connection with a Change of Control. If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason, and such termination is not in Connection with a Change of Control, then, subject to Section 8, Executive will receive: (i) continued payment of Executive’s Base Salary (subject to applicable tax withholdings) for twenty-four (24) months, such

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amounts to be paid out bi-weekly in accordance with the Company’s normal payroll policies; (ii) the current year’s Target Annual Incentive pro-rated to the date of termination, with such pro-rated amount to be calculated by multiplying the current year’s Target Annual Incentive by a fraction with a numerator equal to the number of days inclusive between the start of the current calendar year and the date of termination and a denominator equal to 365, such amounts to be paid out bi-weekly in accordance with the Company’s normal payroll policies over the course of twelve (12) months; (iii) twelve (12) months accelerated vesting with respect to Executive’s then outstanding, unvested equity awards, and (iv) reimbursement for premiums paid for continued health benefits for Executive (and any eligible dependents) under the Company’s health plans until the earlier of (A) eighteen (18) months, payable when such premiums are due (provided Executive validly elects to continue coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)), or (B) the date upon which Executive and Executive’s eligible dependents become covered under similar plans. Notwithstanding the foregoing, if Executive is terminated without Cause or resigns for Good Reason, and such termination is not in Connection with a Change of Control and occurs prior to January 2, 2007, then “twenty-four (24) months” will be substituted for “twelve (12) months” in clause (iii) of the preceding sentence.

          (b) Termination Without Cause or Resignation for Good Reason in Connection with a Change of Control. If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, and the termination is in Connection with a Change of Control, then, subject to Section 8, Executive will receive: (i) continued payment of Executive’s Base Salary for the year in which the termination occurs (subject to applicable tax withholdings), for twenty-four (24) months, such amounts to be paid out bi-weekly in accordance with the Company’s normal payroll policies; (ii) the payment in an amount equal to 100% of Executive’s Target Annual Incentive for the year in which the termination occurs (subject to applicable tax withholdings), such amounts to be paid out bi-weekly in accordance with the Company’s normal payroll policies over the course of twelve (12) months; (iii) the current year’s Target Annual Incentive pro-rated to the date of termination, with such pro-rated amount to be calculated by multiplying the current year’s Target Annual Incentive by a fraction with a numerator equal to the number of days inclusive between the start of the current calendar year and the date of termination and a denominator equal to 365 such amounts to be paid out bi-weekly in accordance with the Company’s normal payroll policies over the course of twelve (12) months; (iv) 100% (subject to the following sentence) of Executive’s then outstanding unvested equity awards will vest, and (v) reimbursement for premiums paid for continued health benefits for Executive (and any eligible dependents) under the Company’s health plans until the earlier of (A) eighteen (18) months, payable when such premiums are due (provided Executive validly elects to continue coverage under COBRA), or (B) the date upon which Executive and Executive’s eligible dependents become covered under similar plans. Notwithstanding the previous sentence, if the Change of Control occurs between January 2, 2007 and August 7, 2007 inclusive, only 50% of Executive’s then outstanding unvested equity awards will vest.

          (c) Voluntary Termination Without Good Reason or Termination for Cause. If Executive’s employment is terminated voluntarily (excluding a termination for Good Reason), including due to death or Disability or is terminated for Cause by the Company, then, except as provided in Section 6, (i) all further vesting of Executive’s outstanding equity awards will terminate immediately; (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately, and (iii) Executive will be eligible for severance benefits only in accordance with the Company’s then established plans.

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     8. Conditions to Receipt of Severance; No Duty to Mitigate.

          (a) Separation Agreement and Release of Claims. The receipt of any severance or other benefits pursuant to Section 7 will be subject to Executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company. No severance or other benefits pursuant to Section 7 will be paid or provided until the separation agreement and release agreement becomes effective.

          (b) Non-solicitation and Non-competition. The receipt of any severance or other benefits pursuant to Section 7 will be subject to Executive agreeing that during the Employment Term and Continuance Period, Executive will not (i) solicit any employee of the Company (other than Executive’s personal assistant) for employment other than at the Company, or (ii) directly or indirectly engage in, have any ownership interest in or participate in any entity that as of the date of termination, competes with the Company in any substantial business of the Company or any business reasonably expected to become a substantial business of the Company within the Continuance Period. If Executive violates this Section 8(b), the Company’s sole form of recourse will be to terminate any future payments or benefits owed to Executive pursuant to Section 7 of this Agreement. Executive’s passive ownership of not more than 1% of any publicly traded company and/or 5% ownership of any privately held company will not constitute a breach of this Section 8(b). Public solicitation, such as by taking out ads in a newspaper, advertising on the web and the like, not specifically aimed at employees of the Company, will not constitute a breach of this Section 8(b).

          (c) Nondisparagement. During the Employment Term and Continuance Period, Executive and the Company in its official communications will not knowingly and materially disparage, criticize, or otherwise make any derogatory statements regarding the other. The Company will instruct its officers and directors to not knowingly and materially disparage, criticize, or otherwise make any derogatory statements regarding Executive. Notwithstanding the foregoing, nothing contained in this agreement will be deemed to restrict Executive, the Company or any of the Company’s current or former officers and/or directors from providing factual information to any governmental or regulatory agency (or in any way limit the content of any such information) to the extent they are requested or required to provide such information pursuant to applicable law or regulation.

          (d) Other Requirements. Executive’s receipt of continued severance payments pursuant to Section 7 will be subject to Executive continuing to comply with the terms of the Confidential Information Agreement and the provisions of this Section 8.

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

     9. Excise Tax. In the event that the benefits provided for in this Agreement constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and will be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Executive’s severance benefits payable under the terms of this Agreement will be either (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to the Excise Tax, whichever of the foregoing

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amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless Executive and the Company agree otherwise in writing, the determination of Executive’s Excise Tax liability, if any, and the amount, if any, required to be paid under this Section 9 will be made in writing by the independent auditors who are primarily used by the Company immediately prior to the Change of Control (the “Accountants”). For purposes of making the calculations required by this Section 10, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. Executive and the Company agree to furnish such information and documents as the Accountants may reasonably request in order to make a determination under this Section 9. The Company will bear all costs the Accountants may incur in connection with any calculations contemplated by this Section 9.

     10. Definitions.

          (a) Cause. For purposes of this Agreement, “Cause” will mean:

               (i) Executive’s willful and continued failure to perform the duties and responsibilities of his position after there has been delivered to Executive a written demand for performance from the Board which describes the basis for the Board’s belief that Executive has not substantially performed his duties and Executive has not taken corrective action within thirty (30) days of such written demand;

               (ii) Any act of personal dishonesty taken by Executive in connection with his responsibilities as an employee of the Company with the intention or reasonable expectation that such action may result in the substantial personal enrichment of Executive;

               (iii) Executive’s conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company’s reputation or business;

               (iv) A breach of any fiduciary duty owed to the Company by Executive that has a material detrimental effect on the Company’s reputation or business;

               (v) Executive being found liable in any Securities and Exchange Commission or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not Executive admits or denies liability);

               (vi) Executive (A) obstructing or impeding; (B) endeavoring to obstruct, impede or improperly influence, or (C) failing to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an “Investigation”). However, Executive’s failure to waive attorney-client privilege relating to communications with Executive’s own attorney in connection with an Investigation will not constitute “Cause”;

               (vii) Executive’s disqualification or bar by any governmental or self-regulatory authority from serving in the capacity contemplated by this Agreement or Executive’s loss of any governmental or self-regulatory license that is reasonably necessary for Executive to

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perform his responsibilities to the Company under this Agreement, if (A) the disqualification, bar or loss continues for more than thirty (30) days, and (B) during that period the Company uses its good faith efforts to cause the disqualification or bar to be lifted or the license replaced. While any disqualification, bar or loss continues during Executive’s employment, Executive will serve in the capacity contemplated by this Agreement to whatever extent legally permissible and, if Executive’s employment is not permissible, Executive will be placed on leave (which will be paid to the extent legally permissible).

          (b) Change of Control. For purposes of this Agreement, “Change of Control” will mean the occurrence of any of the following events:

               (i) The consummation by the Company 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) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

               (ii) The approval by the stockholders of the Company, or if stockholder approval is not required, approval by the Board, of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets;

               (iii) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; or

               (iv) A change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transactions described in subsections (i), (ii), or (iii) or in connection with an actual or threatened proxy contest relating to the election of directors of the Company.

          (c) Continuance Period. For purposes of this Agreement, “Continuance Period” will mean the period of time beginning on the date of the termination of Executive’s employment and ending on the date on which Executive is no longer receiving Base Salary payments under Section 7.

          (d) Disability. For purposes of this Agreement, “Disability” will mean Executive’s absence from his responsibilities with the Company on a full-time basis for 120 calendar days in any consecutive twelve (12) month period as a result of Executive’s mental or physical illness or injury.

          (e) Good Reason. For purposes of this Agreement, “Good Reason” means the occurrence of any of the following, without Executive’s express written consent:

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               (i) An adverse change in Executive’s title or reporting relationship, or a significant reduction of Executive’s duties, position, or responsibilities, relative to Executive’s duties, position, or responsibilities in effect immediately prior to such reduction;

               (ii) A material reduction in the kind or level of employee benefits to which Executive is entitled immediately prior to such reduction with the result that Executive’s overall benefits package is significantly reduced. Notwithstanding the foregoing, a one-time reduction that also is applied to substantially all other executive officers of the Company and that reduces the level of employee benefits by a percentage reduction of 10% or less will not constitute “Good Reason”;

               (iii) A reduction in Executive’s Base Salary or Target Annual Incentive as in effect immediately prior to such reduction. Notwithstanding the foregoing, a one-time reduction that also is applied to substantially all other executive officers of the Company and which one-time reduction reduces the Base Salary or Target Annual Incentive by a percentage reduction of 10% or less in the aggregate will not constitute “Good Reason”;

               (iv) The relocation of Executive to a facility or location more than twenty-five (25) miles from the location of the Company’s executive offices as of the Effective Date;

               (v) Any material breach by the Company of any material contractual obligation owed Executive which breach is not remedied within thirty (30) days of written notice; or

               (vi) The failure of the Company to obtain the assumption of this Agreement by a successor.

The failure of the Company’s stockholders to elect or reelect Executive to the Board will not constitute “Good Reason” for purposes of this Agreement.

          (f) In Connection with a Change of Control. For purposes of this Agreement, a termination of Executive’s employment with the Company is “in Connection with a Change of Control” if Executive’s employment is terminated within three (3) months prior or twelve (12) months following a Change of Control.

     11. Indemnification. Subject to applicable law, Executive will be provided indemnification to the maximum extent permitted by the Company’s Articles of Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies, with such indemnification to be on terms determined by the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.

     12. Confidential Information. Executive will execute the form of Employment, Confidential Information and Invention Assignment Agreement, appended hereto as Exhibit A (the “Confidential Information Agreement”). In the event of any inconsistency between the terms of this Agreement and the terms of the Confidential Information Agreement, this Agreement will prevail.

     13. Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death, and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the

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Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance, or other disposition of Executive’s right to compensation or other benefits will be null and void. This Section 13 will in no way prevent Executive from transferring any vested property he owns.

     14. Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally; (b) one (1) day after being sent overnight by a well-established commercial overnight service, or (c) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

Attn: Chairman of the Compensation Committee
Atmel Corporation
c/o Corporate Secretary
2325 Orchard Parkway
San Jose, CA 95131

If to Executive:

at the last residential address known by the Company.

With a copy to:
Howard, Rice, Nemerovski, Canady, Falk & Rabkin
3 Embarcadero Center; Suite 700
San Francisco, CA 94111
Attn: Ronald Star, Esq.

     15. Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement will continue in full force and effect without said provision.

     16. Arbitration. The parties agree that any and all disputes arising out of the terms of this Agreement, Executive’s employment by the Company, Executive’s service as an officer or director of the Company, or Executive’s compensation and benefits, their interpretation and any of the matters herein released, will be subject to binding arbitration. In the event of a dispute, the parties (or their legal representatives) will promptly confer to select a single Arbitrator mutually acceptable to both parties. If the parties cannot agree on an Arbitrator, then the moving party may file a Demand for Arbitration with the American Arbitration Association (“AAA”) in Santa Clara County, California, who will be selected and appointed consistent with the AAA-Employment Dispute Resolution Rules. Any arbitration will be conducted in a manner consistent with AAA National

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Rules for the Resolution of Employment Disputes, supplemented by the California Rules of Civil Procedure. The Parties further agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The parties hereby agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury. This paragraph will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Executive’s obligations under this Agreement and the Confidential Information Agreement.

     17. Legal Expenses. The Company will reimburse Executive up to $9,000 for reasonable and actual legal expenses incurred by him in connection with the negotiation, preparation and execution of this Agreement and the Confidential Information Agreement, and related matters.

     18. Integration. This Agreement, together with the Confidential Information Agreement, the forms of equity award grant that describe Executive’s outstanding equity awards and the preexisting indemnification agreement between the parties, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in a writing and signed by duly authorized representatives of the parties hereto. In entering into this Agreement, no party has relied on or made any representation, warranty, inducement, promise, or understanding that is not in this Agreement. To the extent that any provisions of this Agreement conflict with those of any other agreement to be signed upon Executive’s hire, the terms in this Agreement will prevail.

     19. Waiver of Breach. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

     20. Survival. The Confidential Information Agreement and the Company’s and Executive’s responsibilities under Sections 3(c), 6, 7, 8 and 11 will survive the termination of this Agreement.

     21. Headings. All captions and Section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

     22. Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

     23. Governing Law. This Agreement will be governed by the laws of the state of California without regard to its conflict of laws provisions.

     24. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

     25. Code Section 409A. Notwithstanding anything to the contrary in this Agreement, if the Company reasonably determines that Section 409A of the Code will result in the imposition of

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additional tax related to a payment of any severance or other benefits otherwise due to Executive on or within the six (6) month period following Executive’s termination or separation from service (as defined pursuant to said Section 409A), the severance benefits will accrue during such six (6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the date of Executive’s termination or separation from service, as the case may be. All subsequent payments, if any, will be payable as provided in this Agreement. The Company and Executive agree to work together in good faith to consider amendments to this Agreement necessary or appropriate to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A of the Code and any temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder.

     26. Counterparts. This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned

     27. Filing Assistance. The Company will reasonably assist Executive in the preparation and filing of any filings under Section 16 of the Securities Exchange Act of 1934, as amended, that may be required as a result of his service with the Company.

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by a duly authorized officer, as of the day and year written below.

 

 

 

COMPANY:

 

 

 

 

 

 

 

 

ATMEL CORPORATION

 

 

 

 

 

/s/ David Sugishita

 

Date: August 6, 2006

 

 

 

David Sugishita
Chairman of Audit Committee

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

/s/ Steven Laub

 

Date: August 6, 2006

 

 

 

Steven Laub

 

 

[SIGNATURE PAGE TO LAUB EMPLOYMENT AGREEMENT]

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Top of the Document

 

 

Exhibit 10.2

[Atmel Corporation Letterhead]

March 13, 2007

Mr. Steven Laub
c/o Atmel Corporation
2325 Orchard Parkway
San Jose, CA 95131

     Re: Employment Agreement dated as of August 6, 2006 (the “Employment Agreement”)

Dear Steve:

     As you know, Atmel Corporation (the “Company”) was contractually required to issue to you 1,000,000 shares (the “Restricted Shares”) of restricted stock (or restricted stock units) on January 2, 2007, but did not do so as a result of the Company not having a then current prospectus relating to the S-8 registration statement applicable to such an issuance. As a result, the Company and you agree as follows:

     1. You waive the right to assert that such failure to issue the Restricted Shares constitutes a material breach for purposes of Section 10(e)(v) of the Employment Agreement, conditioned on the Company’s performance of the terms hereof.

     2. The Company will issue the Restricted Shares to you within ten (10) business days after the date the prospectus relating to the Company’s S-8 registration statement again becomes current, but prior to August 6, 2007. Notwithstanding such delayed issuance, vesting of the Restricted Shares will be per the dates and schedule set forth in the Employment Agreement.

     3. If your employment with the Company terminates prior to the issuance of the Restricted Shares then you will receive vesting of the Initial Option and Additional Option as expressly set forth in the Employment Agreement. In addition, the Company will pay to you in cash an amount equal to the Vested Portion of the Restricted Shares multiplied by the Fair Value (the “Restricted Share Payment”). If the Restricted Share Payment is paid to you and such payment results in your being subject to a greater Excise Tax than you would have been subject to had the Restricted Shares instead been issued (and become vested) in accordance with the provisions of the Employment Agreement (such increase in the Excise Tax referred to as the “Increased Excise Tax”), then you will receive from the Company: (a) a cash payment sufficient to pay the Increased Excise Tax; and (b) additional cash payments sufficient to pay the federal and state income and employment taxes and additional Excise Taxes arising from the payments (including such additional cash payments) made to you by the Company. The “Vested Portion of the Restricted Shares” will mean the number of Restricted Shares that would have vested as expressly set forth in the Employment Agreement through and as a result of such

 

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termination had the Restricted Shares been issued on January 2, 2007. “Fair Value” will mean (a) if the Company is then publicly traded, an amount equal to the closing price of a share of common stock of the Company averaged over the twenty (20) trading days immediately prior to the date of such termination; or (b) if the Company is not then publicly traded, an amount equal to the fair market value of a share of common stock of the Company as of the date of such termination as determined by mutual agreement of the parties. In the absence of such mutual agreement, such per share fair market value will be determined by arbitration pursuant to the Employment Agreement, provided that each party will submit to the arbitrator its determination of the fair market value of a share of common stock of the Company and the arbitrator will be constrained in its determination of the Company’s per share fair market value to select one (1) of the two (2) figures so submitted, except that if the Company’s proposed per share fair market value is greater than your proposed per share fair market value, the per share fair market value will equal the mid-point of the two (2) figures so submitted (the “Mid-Point”). Upon receipt of each party’s proposed figure, the Company will make payment to you as provided above based on its proposed per share fair market value (or the Mid-Point, if applicable) as an advance against the amount to be paid to you as provided above based on the per share fair market value to be determined by the arbitrator.

     4. Capitalized terms not otherwise defined herein will have the meanings set forth in the Employment Agreement.

     5. Except as amended hereby, the Employment Agreement will continue in full force and effect.

     To acknowledge your agreement to the foregoing, please sign and return a copy of this letter, whereupon both the Company and you will be bound by the terms hereof.

 

 

 

 

 

 

Very truly yours,
 

 

 

/s/ Patrick Reutens  

 

 

for Atmel Corporation 

 

 

 

 

 

 

 

 

 

Agreed and Acknowledged:

 

 

 

 

 

/s/ Steven Laub

 

Steven Laub

 

 

 

 

EX-10.1 2 f51009exv10w1.htm EX-10.1

Exhibit 10.1

ATMEL CORPORATION
STEVEN LAUB AMENDED EMPLOYMENT AGREEMENT

   This Amended Employment Agreement (the “Agreement”) is entered into effective as of December 31, 2008, by and between Atmel Corporation (the “Company”) and Steven Laub (“Executive”) and amends and restates the employment agreement entered into as of August 6, 2006, by the Company and Executive, and amended effective as of March 13, 2007.

     1. Duties and Scope of Employment.

          (a) Positions and Duties. As of December 31, 2008, Executive will continue to serve as the Company’s Chief Executive Officer and President. Executive will report to the Company’s Board of Directors (the “Board”). Further, Executive will continue to render such business and professional services in the performance of his duties, consistent with Executive’s position within the Company, as will reasonably be assigned to him by the Board. The period Executive is employed by the Company under this Agreement is referred to herein as the “Employment Term”.

          (b) Board Membership. As of December 31, 2008, Executive will continue to serve as a member of the Board. At each annual meeting of the Company’s stockholders during the Employment Term, the Company will nominate Executive to serve as a member of the Board. Executive’s service as a member of the Board will be subject to any required stockholder approval. Upon the termination of Executive’s employment for any reason, unless otherwise requested by the Board, Executive will be deemed to have resigned from the Board (and all other positions held at the Company and its affiliates) voluntarily, without any further required action by Executive, as of the end of Executive’s employment and Executive, at the Board’s request, will execute any documents necessary to reflect his resignation.

          (c) Obligations. During the Employment Term, Executive, except as provided below, will devote Executive’s full business efforts and time to the Company and will use good faith efforts to discharge Executive’s obligations under this Agreement to the best of Executive’s ability and in accordance with each of the Company’s written corporate guidance and ethics guidelines, conflict of interests policies and code of conduct. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation, or consulting activity for any direct or indirect remuneration without the prior approval of the Board (which approval will not be unreasonably withheld); provided, however, that Executive may, without the approval of the Board, (i) serve in any capacity with any civic, educational, professional, industry or charitable organization, provided such services do not interfere with Executive’s obligations to Company, and (ii) serve on the board of directors of one (1) company of his choosing, with such company to be reasonably acceptable to the Board (currently Teridian Semiconductor Corporation, as to which Executive is paid by Golden Gate Capital and such service will not constitute a violation of this Section 1(c)).

               (i) Executive hereby represents and warrants to the Company that Executive is not party to any contract, understanding, agreement or policy, written or otherwise, that would be breached by Executive’s entering into, or performing services under, this

 


 

Agreement. Executive further represents that he disclosed to the Company in writing all threatened, pending, or actual claims that were unresolved and still outstanding as of August 6, 2006, in each case, against Executive of which he was aware, if any, as a result of his employment with any previous employer or his membership on any boards of directors.

          (d) Other Entities. Executive agrees to serve and will be appointed, without additional compensation, as an officer and director for each of the Company’s subsidiaries, partnerships, joint ventures, limited liability companies and other affiliates, including entities in which the Company has a significant investment as determined by the Company. As used in this Agreement, the term “affiliates” will mean any entity controlled by, controlling, or under common control of the Company.

     2. At-Will Employment. Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive. However, as described in this Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination of employment.

     3. Compensation.

          (a) Base Salary. The Company will pay Executive an annual salary of $755,000 as compensation for his services (such annual salary, as is then effective, to be referred to herein as “Base Salary”). Executive’s Base Salary will be subject to annual review (subject to the provisions of Section 10(e)(iii) of this Agreement). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and will be subject to the usual, required withholdings.

          (b) Annual Incentive. Executive will be eligible to receive annual cash incentives payable for the achievement of performance goals established by the Board or by the Compensation Committee of the Board (the “Committee”). During the Employment Term, Executive’s target annual incentive (“Target Annual Incentive”) will be not less than 100% of Base Salary. For fiscal 2008, Executive’s Target Annual Incentive is 125% of Base Salary. The actual earned annual cash incentive, if any, payable to Executive for any performance period will depend upon the extent to which the applicable performance goal(s) specified by the Committee with the input of Executive are achieved or exceeded and will be adjusted for under- or over-performance.

          (c) Equity Awards.

               (i) As of August 7, 2006, Executive was granted a nonstatutory stock option to purchase 1,450,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq National Market (“Nasdaq”) for the common stock of the Company on August 7, 2006 (the “Initial Option”). The Initial Option was granted under and is subject to the terms, definitions and provisions of the Company’s 2005 Stock Plan (the “Plan”) and was and is scheduled to vest at a rate of 25% of the shares subject to the Initial

 


 

Option on the first anniversary of the grant and 1/48 of the shares was and is scheduled to vest monthly thereafter assuming Executive’s continued employment with the Company on each scheduled vesting date. Except as provided in this Agreement, the Initial Option is subject to the Company’s standard terms and conditions for options granted under the Plan.

               (ii) On January 2, 2007, the Company granted to Executive a nonstatutory stock option to purchase 500,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq for the common stock of the Company on January 2, 2007 (the “Additional Option”). The Additional Option was granted under and is subject to the same terms, definitions and provisions applicable to the Initial Option, and was and is scheduled to vest at a rate of 25% of the shares subject to the award on August 7, 2007, and the remainder of the shares was and is scheduled to vest pro-rata monthly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. In addition, on July 11, 2007, the Company granted 1,000,000 restricted stock units to Executive under and subject to the same terms, definitions and provisions applicable to the Initial Option assuming exercise thereof, except that such shares were and are scheduled to vest at a rate of 25% of the shares subject to the award vesting on August 7, 2007, and the remainder of the shares was and is scheduled to vest pro-rata quarterly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. The Company agrees (to the extent permitted by the Company’s Insider Trading Policy), at the request of Executive, to facilitate the implementation by Executive of a 10b5-1 trading plan to accommodate Executive’s ability to sell such portion of the relevant shares as may be necessary to cover Executive’s tax withholding obligations with respect to such vesting, if any, at such tax rate as Executive may specify. If the Company’s Insider Trading Policy does not permit the implementation of a 10b5-1 trading plan, Executive will be allowed to have the Company withhold the number of shares necessary to satisfy his minimum tax withholding obligation.

               (iii) Executive has received grants of equity awards under the Plan other than the equity awards described in Section 3(c)(i) and (ii) above. As determined by the Committee, Executive will continue to be eligible for grants of equity compensation awards under the Plan (or any other stock plan maintained by the Company) in accordance with the Company’s policies, as in effect from time to time, and subject to such terms and conditions as the Committee determines, including vesting criteria such as continued service or performance objectives.

     4. Employee Benefits.

          (a) Generally. Executive will be eligible to participate in accordance with the terms of all Company employee benefit plans, policies and arrangements that are applicable to other executive officers of the Company, as such plans, policies and arrangements may exist from time to time.

          (b) Vacation. Executive will be entitled to receive paid annual vacation in accordance with Company policy for other senior executive officers, but with vacation accrual of not less than four (4) weeks per year.

 


 

     5. Expenses. The Company will reimburse Executive for reasonable travel, entertainment and other expenses incurred by Executive in the furtherance of the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.

     6. Termination of Employment. In the event Executive’s employment with the Company terminates for any reason, Executive will be entitled to any (a) unpaid Base Salary accrued up to the effective date of termination; (b) unpaid, but earned and accrued annual incentive for any completed fiscal year as of his termination of employment; (c) pay for accrued but unused vacation; (d) benefits or compensation as provided under the terms of any employee benefit and compensation agreements or plans applicable to Executive; (e) unreimbursed business expenses required to be reimbursed to Executive; and (f) rights to indemnification Executive may have under the Company’s Articles of Incorporation, Bylaws, this Agreement, and/or separate indemnification agreement, as applicable. In the event Executive’s employment with the Company terminates for any reason, Executive will be entitled to exercise any outstanding stock options for at least twelve (12) months after the later of such termination of employment or the date upon which Executive ceases to provide any other services to the Company or any of its affiliates, whether as a director, independent contractor or otherwise, but in no event later than the applicable scheduled expiration date of such award (in the absence of any termination of employment) as set forth in the award agreement. In the event Executive’s employment with the Company terminates due to death or Disability, then there will be acceleration of vesting of any then unexpired and unvested equity awards (including, but not limited to, awards of stock appreciation rights or restricted stock units but excluding the award of performance-based restricted stock units granted to Executive on August 15, 2008, which instead will be subject to the terms of such grant, including without limitation the provisions regarding vesting following a change of control and in connection with certain terminations of employment) held by Executive based on the vesting that Executive would have achieved had Executive remained in the employ of the Company for an additional twelve (12) months. In addition, if the termination is by the Company without Cause or Executive resigns for Good Reason, Executive will be entitled to the amounts and benefits specified in Section 7.

     7. Severance.

          (a) Termination Without Cause or Resignation for Good Reason other than in Connection with a Change of Control. If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason, and such termination is not in Connection with a Change of Control, then, subject to Section 8 and Section 7(d) below, Executive will receive: (i) in a lump sum payment on the sixty-first (61st) day following Executive’s termination of employment: (A) an amount equal to twenty-four (24) months of Executive’s Base Salary (subject to applicable tax withholdings); and (B) an amount equal to the current year’s Target Annual Incentive pro-rated to the date of termination, with such pro-rated amount to be calculated by multiplying the current year’s Target Annual Incentive by a fraction with a numerator equal to the number of days inclusive between the start of the current calendar year and the date of termination and a denominator equal to 365; (ii) twelve (12) months accelerated vesting with respect to Executive’s then outstanding, unvested equity awards (other than the award of performance-based restricted stock units granted to Executive on August 15, 2008, which instead will be subject to the terms of such grant, including without limitation the

 


 

provisions regarding vesting following a change of control and in connection with certain terminations of employment); and (iii) reimbursement for premiums paid for continued health benefits for Executive (and any eligible dependents) under the Company’s health plans until the earlier of (A) eighteen (18) months, payable when such premiums are due (provided Executive validly elects to continue coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)), or (B) the date upon which Executive and Executive’s eligible dependents become covered under similar plans.

          (b) Termination Without Cause or Resignation for Good Reason in Connection with a Change of Control. If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, and the termination is in Connection with a Change of Control, then, subject to Section 8 and Section 7(d) below, Executive will receive: (i) in a lump sum payment on the ninety-sixth (96th) day following Executive’s termination of employment: (A) an amount equal to twenty-four (24) months of Executive’s Base Salary for the year in which the termination occurs (subject to applicable tax withholdings); and (B) an amount equal to 100% of Executive’s Target Annual Incentive for the year in which the termination occurs (subject to applicable tax withholdings); (ii) an amount equal to the current year’s Target Annual Incentive pro-rated to the date of termination, with such pro-rated amount to be calculated by multiplying the current year’s Target Annual Incentive by a fraction with a numerator equal to the number of days inclusive between the start of the current calendar year and the date of termination and a denominator equal to 365; (iii) 100% of Executive’s then outstanding unvested equity awards (other than the award of performance-based restricted stock units granted to Executive on August 15, 2008, which instead will be subject to the terms of such grant, including without limitation the provisions regarding vesting following a change of control and in connection with certain terminations of employment) will vest, (iv) reimbursement for premiums paid for continued health benefits for Executive (and any eligible dependents) under the Company’s health plans until the earlier of (A) eighteen (18) months, payable when such premiums are due (provided Executive validly elects to continue coverage under COBRA), or (B) the date upon which Executive and Executive’s eligible dependents become covered under similar plans, and (v) transitional outplacement benefits in accordance with the policies and guidelines of the Company as in effect immediately prior to the Change of Control.

          (c) Voluntary Termination Without Good Reason or Termination for Cause. If Executive’s employment is terminated voluntarily (excluding a termination for Good Reason), including due to death or Disability or is terminated for Cause by the Company, then, except as provided in Section 6, (i) all further vesting of Executive’s outstanding equity awards will terminate immediately; (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately, and (iii) Executive will be eligible for severance benefits only in accordance with the Company’s then established plans; provided, however, that any such severance benefits will be paid or provided at the same time and in the same form as similar severance benefits would be paid or provided under Section 7(a) or (b) in connection with Executive’s termination without Cause or resignation for Good Reason.

          (d) Code Section 409A.

               (i) Six-Month Delay. Notwithstanding anything to the contrary in this Agreement, no Deferred Compensation Separation Benefits (as defined below) or other

 


 

severance benefits that otherwise are exempt from Section 409A (as defined below) pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be considered due or payable until Executive has a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the final regulations and any guidance promulgated thereunder (“Section 409A”). Further, if Executive is a “specified employee” within the meaning of Section 409A at the time of his separation from service (other than due to death), then the severance benefits payable to Executive under this Agreement that are considered deferred compensation under Section 409A, if any, and any other severance payments or separation benefits that are considered deferred compensation under Section 409A, if any (together, the “Deferred Compensation Separation Benefits”) otherwise due to Executive on or within the six (6) month period following his separation from service will accrue during such six (6) month period and will become payable in a lump sum payment (less applicable withholding taxes) on the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent payments of Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. For purposes of clarity, the following severance benefits shall not constitute Deferred Compensation Separation Benefits: (A) the vesting acceleration of outstanding awards of stock options, stock appreciation rights or restricted stock described in Sections 7(a)(iii) and 7(b)(iv) unless such awards include deferral or other features that cause such awards to be subject to Section 409A; and (B) the COBRA reimbursements described in Sections 7(a)(iv) and 7(b)(v). If Executive dies following his separation from service but prior to the six (6) month anniversary of his date of separation, then any payments delayed in accordance with this paragraph will be payable in a lump sum (less applicable withholding taxes) to Executive’s estate as soon as administratively practicable after the date of his death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

               (ii) Amendments to this Agreement to Comply with Section 409A. It is the intent of this Agreement to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Executive and the Company agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition under Section 409A prior to actual payment to Executive.

     8. Conditions to Receipt of Severance; No Duty to Mitigate.

          (a) Separation Agreement and Release of Claims. The receipt of any severance or other benefits pursuant to Section 7 will be subject to Executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company. The separation agreement and release of claims must be executed and effective within the period required by the release but in no event later than the scheduled payment date set forth in Section 7(a)(i) or Section 7(a)(ii), as applicable. No severance or other benefits pursuant to Section 7 will be paid or provided until the separation agreement and release agreement becomes effective.

 


 

          (b) Non-solicitation and Non-competition. The receipt of any severance or other benefits pursuant to Section 7 will be subject to Executive agreeing that during the Employment Term and Continuance Period, Executive will not (i) solicit any employee of the Company (other than Executive’s personal assistant) for employment other than at the Company, or (ii) directly or indirectly engage in, have any ownership interest in or participate in any entity that as of the date of termination, competes with the Company in any substantial business of the Company or any business reasonably expected to become a substantial business of the Company within the Continuance Period. If Executive violates this Section 8(b), the Company’s sole recourse will be as follows: (x) the Executive shall repay to the Company an amount equal to (1) the after-tax proceeds of cash severance benefits paid to Executive pursuant to Section 7 of this Agreement multiplied by (2) the percentage determined by dividing the number of days that remain in the Continuance Period as of the date Executive violates this Section 8(b) by 730; and (y) the Company will be permitted to terminate any future reimbursements for premiums to be paid for continued health benefits pursuant to Sections 7(a)(iii) or 7(b)(iv). Executive’s passive ownership of not more than 1% of any publicly traded company and/or 5% ownership of any privately held company will not constitute a breach of this Section 8(b). Public solicitation, such as by taking out ads in a newspaper, advertising on the web and the like, not specifically aimed at employees of the Company, will not constitute a breach of this Section 8(b).

          (c) Nondisparagement. During the Employment Term and Continuance Period, Executive and the Company in its official communications will not knowingly and materially disparage, criticize, or otherwise make any derogatory statements regarding the other. The Company will instruct its officers and directors to not knowingly and materially disparage, criticize, or otherwise make any derogatory statements regarding Executive. Notwithstanding the foregoing, nothing contained in this agreement will be deemed to restrict Executive, the Company or any of the Company’s current or former officers and/or directors from providing factual information to any governmental or regulatory agency (or in any way limit the content of any such information) to the extent they are requested or required to provide such information pursuant to applicable law or regulation.

          (d) Other Requirements. Executive’s receipt of continued severance payments pursuant to Section 7 will be subject to Executive continuing to comply with the terms of the Confidential Information Agreement and the provisions of this Section 8.

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

     9. Excise Tax. In the event that the benefits provided for in this Agreement constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and will be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Executive’s severance benefits payable under the terms of this Agreement will be either (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits

 


 

may be taxable under Section 4999 of the Code. Unless Executive and the Company agree otherwise in writing, the determination of Executive’s Excise Tax liability, if any, and the amount, if any, required to be paid under this Section 9 will be made in writing by the Company’s independent tax accountants immediately prior to the Change of Control (the “Accountants”). In the event of a reduction in accordance with this paragraph (as described in (b) above), the reduction will occur, with respect to the benefits provided in this Agreement that are considered “parachute payments” within the meaning of Section 280G of the Code, in accordance with the following:

          (a) Assignment of Values. Each payment will be assigned an “Economic Value” and a “280G Value.” The 280G Value will equal the value of the payment for purposes of Section 280G of the Code as determined by the Accountants in accordance with Section 280G of the Code and applicable Treasury Regulations. The Economic Value will be determined as follows:

               (i) Cash payments. The Economic Value of cash payments will equal the 280G Value of each such payment.

               (ii) Equity awards.

                    (1) Options and Stock Appreciation Rights. The Economic Value of a Share (as defined below) subject to a stock option or stock appreciation right will be the difference equal to (A) the fair market value of such Share as of the date the 280G Value of the Share is determined for purposes of this Section, minus (B) the per share exercise price of the award.

                    (2) Restricted Stock and Restricted Stock Units. The Economic Value of a Share subject to a restricted stock or restricted stock unit award will be the difference equal to (A) the fair market value of such Share as of the date the 280G Value of the Share is determined for purposes of this Section, less (B) the per share purchase price of the award, if any.

                    (3) For purposes of this Section 9, each share of common stock subject to each stock option, stock appreciation right, restricted stock award and restricted stock unit award, the payment or vesting acceleration of which constitutes a parachute payment within the meaning of Section 280G of the Code (a “Share”), will be a separate “payment.” As a result, an Economic Value, 280G Value, and 280G Ratio (as defined below) will be determined for each Share. For purposes of illustration only, assume that Executive is granted an option on January 1, 2008, covering 500 Shares at a per share exercise price of $5. The option is scheduled to vest in equal annual installments of 250 Shares on January 1, 2010 and January 1, 2011. However, if a change of control occurs and Executive is terminated without cause, Executive is entitled to 100% vesting acceleration. On March 1, 2009, a change of control occurs with a deal price of $10 and Executive is terminated without cause. The Accountants determine that Executive’s severance benefits should be reduced in accordance with this Section 9 and that the amount of the 280G Value to be reduced is $100. The Accountants determine that the Economic Value, 280G Value, and 280G Ratio for each of the 500 Shares subject to the option are as follows:

 


 

                         a) The Economic Value for each Share is $5 (i.e., $10 deal price less the $5 per share exercise price).

                         b) The 280G Value of each Share that would have vested on January 1, 2010 (the “2010 Shares”), is $1, as determined by the Accountants based on appropriate assumptions used in calculating the 280G Value in accordance with Section 280G of the Code and applicable Treasury Regulations.

                         c) The 280G Value of each Share that would have vested on January 1, 2011 (the “2011 Shares”), is $2, as determined by the Accountants based on appropriate assumptions used in calculating the 280G Value in accordance with Section 280G of the Code and applicable Treasury Regulations.

                         d) The 280G Ratio of each 2010 Share is 5:1 (i.e., $5 Economic Value divided by the $1 280G Value).

                         e) The 280G Ratio of each 2011 Share is 5:2 (.i.e., the $5 Economic Value divided by the $2 280G Value).

                         The 280G Ratio of a 2011 Share is lower than the 280G Ratio of a 2010 Share. Consequently, the Accountants will reduce the 2011 Shares first. As each 2011 Share has a 280G Value of $2, the Accountants must reduce the 2011 Shares by 50 Shares (i.e., reducing the 2011 Shares by 50 Shares will reduce the Employee’s aggregate 280G Value by $100 (50 Shares multiplied by $2). After taking the reduction into account, Executive vests in a total of 450 Shares (i.e., 250 Shares that would have vested on January 1, 2010 and 200 Shares that would have vested on January 1, 2011).

               (iii) Other Benefits and Payments. The Economic Value of each payment attributable to reimbursement for premiums paid for continued health benefits under the Company’s health plans will equal the 280G Value of each payment, such that the 280G Ratio for each such payment will be equal to one (1).

          (b) Ranking of Payments. After the 280G Value and Economic Value of each payment are determined, the Accountants will rank the payments in order of increasing 280G Ratio as follows: the payment with the lowest 280G Ratio will be ranked first and all other payments will be ranked in ascending order with respect to their 280G Ratios with the payment with the highest 280G Ratio ranked last. For this purpose, the “280G Ratio” will mean, with respect to each payment, the ratio determined by dividing: (1) the Economic Value of the payment by (2) the 280G Value of the payment. For purposes of clarity, the Accountants will determine a separate 280G Ratio for each Share.

          (c) Reduction of Parachute Payments. The portion of each payment that is a parachute payment under Section 280G of the Code will be reduced in the order in which the payments have been ranked in accordance with Section 9(b) above. For purposes of clarity, a Share or the acceleration of a Share, as applicable, may be reduced in whole Shares only and may not be reduced by a fraction of such Share. In the event that two or more payments have the same 280G Ratio, the portion of each payment that is a parachute payment will be reduced in accordance with the following rules:

 


 

               (i) Cash Payments.

                    (1) With respect to two or more cash payments that have the same 280G Ratio, such payments will be reduced on a pro-rata basis.

                    (2) Any cash payments that have the same 280G Ratio as payments that are not cash payments will be reduced prior to reducing the payments that are not cash payments.

               (ii) Equity Awards.

                    (1) With respect to two or more Shares, if the Shares have the same 280G Ratio, the order of reduction of such Shares will be based on the 280G Value of the Shares. Shares with a higher 280G Value will be subject to earlier reduction, such that a Share with the highest 280G Value will be reduced first and a Share with the lowest 280G Value will be reduced last.

                    (2) In the event that two or more Shares (A) have the same 280G Ratio and (B) have the same 280G Value, the Shares will be subject to reduction based on the dates of grant of the equity awards covering such Shares. Shares subject to equity awards granted earlier will be subject to earlier reduction, such that a Share subject to an equity award with the earliest grant date will be reduced first and a Share subject to an equity award with the most recent grant date will be reduced last. Notwithstanding the foregoing, if any one or more Shares subject to one or more nonstatutory stock options have the same 280G Ratio as any one or more Shares subject to one or more incentive stock options, Shares subject to incentive stock options will be subject to reduction only after Shares subject to nonstatutory stock options with the same 280G Ratio have been reduced in full.

                    (3) Any Shares that have the same 280G Ratio as payments attributable to reimbursement for premiums paid for continued health benefits under the Company’s health plans will be reduced prior to any such other payments having the same 280G Ratio that are neither cash nor Shares, provided that cash payments and Shares with the same 280G Ratio have been reduced in full.

               (iii) Other Benefits and Payments. With respect to two or more payments that: (A) have the same 280G Ratio and (B) are payments attributable to reimbursement for premiums paid for continued health benefits under the Company’s health plans such payments will be subject to pro rata reduction, provided that cash payments and Shares with the same 280G Ratio have been reduced in full.

          For purposes of making the calculations required by this Section 9, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. Executive and the Company agree to furnish such information and documents as the Accountants may reasonably request in order to make a determination under this Section 9. The Company will bear all costs the Accountants may incur in connection with any calculations contemplated by this Section 9.

 


 

     10. Definitions.

          (a) Cause. For purposes of this Agreement, “Cause” will mean:

               (i) Executive’s willful and continued failure to perform the duties and responsibilities of his position after there has been delivered to Executive a written demand for performance from the Board which describes the basis for the Board’s belief that Executive has not substantially performed his duties and Executive has not taken corrective action within thirty (30) days of such written demand;

               (ii) Any act of personal dishonesty taken by Executive in connection with his responsibilities as an employee of the Company with the intention or reasonable expectation that such action may result in the substantial personal enrichment of Executive;

               (iii) Executive’s conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company’s reputation or business;

               (iv) A breach of any fiduciary duty owed to the Company by Executive that has a material detrimental effect on the Company’s reputation or business;

               (v) Executive being found liable in any Securities and Exchange Commission or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not Executive admits or denies liability);

               (vi) Executive (A) obstructing or impeding; (B) endeavoring to obstruct, impede or improperly influence, or (C) failing to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an “Investigation”). However, Executive’s failure to waive attorney-client privilege relating to communications with Executive’s own attorney in connection with an Investigation will not constitute “Cause”;

               (vii) Executive’s disqualification or bar by any governmental or self-regulatory authority from serving in the capacity contemplated by this Agreement or Executive’s loss of any governmental or self-regulatory license that is reasonably necessary for Executive to perform his responsibilities to the Company under this Agreement, if (A) the disqualification, bar or loss continues for more than thirty (30) days, and (B) during that period the Company uses its good faith efforts to cause the disqualification or bar to be lifted or the license replaced. While any disqualification, bar or loss continues during Executive’s employment, Executive will serve in the capacity contemplated by this Agreement to whatever extent legally permissible and, if Executive’s employment is not permissible, Executive will be placed on leave (which will be paid to the extent legally permissible).

          (b) Change of Control. For purposes of this Agreement, “Change of Control” will mean the occurrence of any of the following events:

               (i) The consummation by the Company 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) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

               (ii) The approval by the stockholders of the Company, or if stockholder approval is not required, approval by the Board, of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets;

               (iii) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; or

               (iv) A change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are either (x) elected by the Board pursuant to Section 3.4 of the Bylaws of the Company, or (y) nominated by the Board for election by the stockholders pursuant to Section 3.3 of the Bylaws of the Company, in either case (x) or (y), with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transactions described in subsections (i), (ii), or (iii) or in connection with an actual or threatened proxy contest relating to the election of directors of the Company.

          (c) Continuance Period. For purposes of this Agreement, “Continuance Period” will mean the period of time beginning on the date of the termination of Executive’s employment and ending on the second (2nd) anniversary of such date.

          (d) Disability. For purposes of this Agreement, “Disability” will mean Executive’s absence from his responsibilities with the Company on a full-time basis for 120 calendar days in any consecutive twelve (12) month period as a result of Executive’s mental or physical illness or injury.

          (e) Good Reason. For purposes of this Agreement, “Good Reason” means the occurrence of any of the following, without Executive’s express written consent:

               (i) An adverse change in Executive’s title or reporting relationship, or a significant reduction of Executive’s duties, position, or responsibilities, relative to Executive’s duties, position, or responsibilities in effect immediately prior to such reduction;

               (ii) A material reduction in the kind or level of employee benefits to which Executive is entitled immediately prior to such reduction with the result that Executive’s overall benefits package is significantly reduced. Notwithstanding the foregoing, a one-time reduction that (A) also is applied to substantially all other executive officers of the Company, or, following a Change of Control, substantially all other executive officers of the consolidated

 


 

entity that includes the Company, and (B) reduces the level of employee benefits by a percentage reduction of 10% or less will not constitute “Good Reason”;

               (iii) A reduction in Executive’s Base Salary or Target Annual Incentive as in effect immediately prior to such reduction. Notwithstanding the foregoing, a one-time reduction that (A) also is applied to substantially all other executive officers of the Company, or, following a Change of Control, substantially all other executive officers of the consolidated entity that includes the Company, and (B) reduces Base Salary or Target Annual Incentive by a percentage reduction of 10% or less in the aggregate will not constitute “Good Reason”;

               (iv) The relocation of Executive to a facility or location more than twenty-five (25) miles from the location of the Company’s executive offices as of August 6, 2006;

               (v) Any material breach by the Company of any material contractual obligation owed Executive which breach is not remedied within thirty (30) days of written notice; or

               (vi) The failure of the Company to obtain the assumption of this Agreement by a successor.

The failure of the Company’s stockholders to elect or reelect Executive to the Board will not constitute “Good Reason” for purposes of this Agreement.

          (f) In Connection with a Change of Control. For purposes of this Agreement, a termination of Executive’s employment with the Company is “in Connection with a Change of Control” if Executive’s employment is terminated within three (3) months prior or twelve (12) months following a Change of Control. If a Change of Control event described in Section 10(b)(iv) occurs and, within twelve (12) months following such Change of Control, a Change of Control event described in Section 10(b)(i) through Section 10(b)(iii) occurs (the “Subsequent Change of Control”), a termination of Executive’s employment with the Company also will be considered “in Connection with a Change of Control” if Executive’s employment is terminated within twelve (12) months following the Subsequent Change of Control.

 


 

     11. Indemnification. Subject to applicable law, Executive will be provided indemnification to the maximum extent permitted by the Company’s Articles of Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies, with such indemnification to be on terms determined by the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.

     12. Confidential Information. Executive will execute the form of Employment, Confidential Information and Invention Assignment Agreement, appended hereto as Exhibit A (the “Confidential Information Agreement”). In the event of any inconsistency between the terms of this Agreement and the terms of the Confidential Information Agreement, this Agreement will prevail.

     13. Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death, and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance, or other disposition of Executive’s right to compensation or other benefits will be null and void. This Section 13 will in no way prevent Executive from transferring any vested property he owns.

     14. Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally; (b) one (1) day after being sent overnight by a well-established commercial overnight service, or (c) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:
Attn: Chairman of the Compensation Committee
Atmel Corporation
c/o Corporate Secretary
2325 Orchard Parkway
San Jose, CA 95131

If to Executive:
at the last residential address known by the Company.
With a copy to:
Howard, Rice, Nemerovski, Canady, Falk & Rabkin
3 Embarcadero Center; Suite 700
San Francisco, CA 94111
Attn: Ronald Star, Esq.

 


 

     15. Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement will continue in full force and effect without said provision.

     16. Arbitration. The parties agree that any and all disputes arising out of the terms of this Agreement, Executive’s employment by the Company, Executive’s service as an officer or director of the Company, or Executive’s compensation and benefits, their interpretation and any of the matters herein released, will be subject to binding arbitration. In the event of a dispute, the parties (or their legal representatives) will promptly confer to select a single Arbitrator mutually acceptable to both parties. If the parties cannot agree on an Arbitrator, then the moving party may file a Demand for Arbitration with the American Arbitration Association (“AAA”) in Santa Clara County, California, who will be selected and appointed consistent with the AAA-Employment Dispute Resolution Rules. Any arbitration will be conducted in a manner consistent with AAA National Rules for the Resolution of Employment Disputes, supplemented by the California Rules of Civil Procedure. The Parties further agree that the prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The parties hereby agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury. This paragraph will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Executive’s obligations under this Agreement and the Confidential Information Agreement.

     17. Legal Expenses. The Company will reimburse Executive for reasonable legal fees and expenses incurred by him in connection with the negotiation, preparation and execution of this Agreement. Also, in the event that, on or following a Change of Control that is triggered by an occurrence described in Section 10(b)(iii) that is not approved by the Board or an occurrence described in Section 10(b)(iv), either party brings an action to enforce or effect its rights under this Agreement, the Company will reimburse the Executive for his costs and expenses incurred in connection with the action (including, without limitation, in connection with Executive defending himself against an action brought by the Company to enforce or effects its rights under this Agreement), including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees. Notwithstanding the preceding, no reimbursement will be made to Executive for an action originally brought by Executive if an entity of competent jurisdiction issues a final order that Executive’s action was frivolous. This right to reimbursement will be subject to the following additional requirements: (i) Executive must submit documentation of the costs, expenses and fees to be reimbursed within thirty (30) days of the end of his taxable year in which the costs, expenses and fees were incurred; (ii) the amount of any reimbursement provided during his taxable year shall not affect any expenses eligible for reimbursement in any other taxable year; (iii) the reimbursement of eligible costs and expenses shall be made by the Company within thirty (30) days of Executive’s submission of documentation of the costs, expenses and fees to be reimbursed but no later than the last day of Executive’s taxable year that immediately follows the taxable year in which the costs or expenses were incurred; and (iv) the right to any such reimbursement shall not be subject to liquidation or exchange for another benefit or payment.

     18. Integration. This Agreement, together with the Confidential Information Agreement, the forms of equity award agreements that describe Executive’s outstanding equity awards (other

 


 

than the award of performance-based restricted stock units granted to Executive on August 15, 2008, which instead will be subject to the terms of such grant, including without limitation the provisions regarding vesting following a change of control and in connection with certain terminations of employment) and the preexisting indemnification agreement between the parties, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in a writing and signed by duly authorized representatives of the parties hereto. In entering into this Agreement, no party has relied on or made any representation, warranty, inducement, promise, or understanding that is not in this Agreement. To the extent that any provisions of this Agreement conflict with those of any other agreement to be signed upon Executive’s hire, the terms in this Agreement will prevail.

     19. Waiver of Breach. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

     20. Survival. The Confidential Information Agreement and the Company’s and Executive’s responsibilities under Sections 3(c), 6, 7, 8 and 11 will survive the termination of this Agreement.

     21. Headings. All captions and Section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

     22. Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

     23. Governing Law. This Agreement will be governed by the laws of the state of California without regard to its conflict of laws provisions.

     24. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

     25. Counterparts. This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned. 

     26. Filing Assistance. The Company will reasonably assist Executive in the preparation and filing of any filings under Section 16 of the Securities Exchange Act of 1934, as amended, that may be required as a result of his service with the Company.

 


 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by a duly authorized officer, as of the day and year written below.

 

 

 

 

 

 

 

COMPANY:

 

 

 

 

 

 

 

 

 

 

 

 

 

ATMEL CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Jack L. Saltich

 

Jack L. Saltich

 

  

 

Date: 30 Dec. 2008

 

 

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Steven Laub

 

 

 

 

Date: 12/30/08

 

 

Steven Laub

 

 

 

 

 

 

[SIGNATURE PAGE TO LAUB EMPLOYMENT AGREEMENT]

 

EX-10.13 4 f51611exv10w13.htm EXHIBIT 10.13

EXHIBIT 10.13

ATMEL CORPORATION CHANGE OF CONTROL AND SEVERANCE PLAN
AND SUMMARY PLAN DESCRIPTION

     1. Introduction. The purpose of this Atmel Corporation Change of Control and Severance Plan (the “Plan”) is to provide assurances of specified severance benefits to eligible employees of the Company whose employment is subject to being involuntarily terminated due to death, Disability, or other than for Cause or voluntarily terminated for Good Reason under the circumstances described in the Plan, including but not limited to following a Change of Control of the Company. The Company recognizes that the potential of a Change of Control can be a distraction to employees and can cause such employees to consider alternative employment opportunities. The Plan is intended to (i) assure that the Company will have continued dedication and objectivity of key employees, notwithstanding the possibility, threat or occurrence of a Change of Control and (ii) provide such employees with an incentive to continue their employment and to motivate them to maximize the value of the Company prior to and following a Change of Control for the benefit of its stockholders. This Plan is an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended. This document constitutes both the written instrument under which the Plan is maintained and the required summary plan description for the Plan.

     2. Important Terms. To help you understand how this Plan works, it is important to know the following terms:

          2.1 “Administrator” means the Compensation Committee of the Board or another duly constituted committee of members of the Board, or officers of the Company as delegated by the Board, or any person to whom the Administrator has delegated any authority or responsibility pursuant to Section 12, but only to the extent of such delegation.

          2.2 “Base Pay” means a Covered Employee’s regular straight-time salary as in effect during the last regularly scheduled payroll period immediately preceding the date on which an Involuntary Termination occurs. Base Pay does not include payments for overtime, shift premium, incentive compensation, incentive payments, bonuses, commissions or other compensation.

          2.3 “Board” means the Board of Directors of the Company.

          2.4 “Cause” means (i) the Covered Employee’s willful and continued failure to perform the duties and responsibilities of his or her position after there has been delivered to the Covered Employee a written demand for performance from the Company’s Chief Executive Officer which describes the basis for the Chief Executive Officer’s belief that the Covered Employee has not substantially performed his or her duties and the Covered Employee has not corrected such failure within thirty (30) days of such written demand; (ii) any act of personal dishonesty taken by the Covered Employee in connection with his or her responsibilities as an employee of the Company with the intention or reasonable expectation that such action may result in the substantial personal enrichment of the Covered Employee; (iii) the Covered Employee’s conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company’s reputation or business; (iv) a breach of any fiduciary duty owed to the Company by the Covered Employee that has a material detrimental effect on the Company’s reputation or business; (v) the Covered Employee being found liable in any Securities and Exchange Commission or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not the Covered Employee admits or denies liability); (vi) the Covered Employee (A) obstructing or impeding;

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(B) endeavoring to obstruct, impede or improperly influence, or (C) failing to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an “Investigation”); however, the Covered Employee’s failure to waive attorney-client privilege relating to communications with the Covered Employee’s own attorney in connection with an Investigation will not constitute “Cause”; or (vii) the Covered Employee’s disqualification or bar by any governmental or self-regulatory authority from serving in the capacity contemplated by his or her position or the Covered Employee’s loss of any governmental or self-regulatory license that is reasonably necessary for the Covered Employee to perform his or her responsibilities to the Company, if (A) the disqualification, bar or loss continues for more than thirty (30) days, and (B) during that period the Company uses its good faith efforts to cause the disqualification or bar to be lifted or the license replaced, it being understood that while any disqualification, bar or loss continues during the Covered Employee’s employment, the Covered Employee will serve in the capacity contemplated by his or her position to whatever extent legally permissible and, if the Covered Employee’s service in the capacity contemplated by his or her position is not permissible, the Covered Employee will be placed on leave (which will be paid to the extent legally permissible).

          2.5 “Change of Control” means the occurrence of any of the following events: (i) the consummation by the Company 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) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; (iii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities; or (iv) a change in the composition of the Board occurring within a one-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are either (x) elected by the Board pursuant to Section 3.4 of the Bylaws of the Company, or (y) nominated by the Board for election by the stockholders pursuant to Section 3.3 of the Bylaws of the Company, in either case (x) or (y), with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transactions described in subsections (i), (ii), or (iii) or in connection with an actual or threatened proxy contest relating to the election of directors of the Company.

          2.6 “Change of Control Determination Period” means the time period beginning three (3) months before the Change of Control and ending twelve (12) months following the Change of Control. Notwithstanding the foregoing, if a Change of Control event described in Section 2.5(iv) occurs and, within twelve (12) months following such Change of Control, a Change of Control event described in Section 2.5(i) through Section 2.5(iii) occurs (the “Subsequent Change of Control”), the “Change of Control Determination Period” will also include the time period beginning on the date of the Subsequent Change of Control and ending on the date that is twelve (12) months following such Subsequent Change of Control.

          2.7 “Change of Control Severance Benefits” means the compensation and other benefits the Covered Employee will be provided pursuant to Section 4.

          2.8 “Company” means Atmel Corporation, a Delaware corporation.

          2.9 “Covered Employee” means an employee of the Company or any parent or subsidiary of the Company who has been designated by the Administrator to participate in the Plan as shown on

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Appendix A and/or Appendix B, attached hereto, and has executed and delivered a Participation Agreement to the Company. For this purpose, each U.S. employee of the Company who becomes a Section 16 Officer on or after the Effective Date shall be deemed to have been designated by the Administrator to participate in the Plan under Tier 1 of Appendix A and Appendix B as of the date he or she becomes a Section 16 Officer and shall be a Covered Employee upon executing and delivering a Participation Agreement to the Company.

          2.10 “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).

          2.10 “Effective Date” means August 5, 2008.

          2.11 “Equity Compensation Awards” means, with respect to a Covered Employee, the Covered Employee’s unvested equity compensation awards outstanding on the later of the date of his or her Involuntary Termination or the Change of Control, other than performance-based restricted stock unit awards or other equity compensation awards that vest based on achievement of performance goals. For the sake of clarity, nothing herein will be deemed to extend the maximum term of a Covered Employee’s stock options as set forth in the applicable stock option agreements by and between the Covered Employee and the Company.

          2.12 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

          2.13 “Good Reason” means the Covered Employee’s termination of employment within ninety (90) days following the end of the Cure Period (as defined below) as a result of the occurrence of any of the following without his or her written consent: (i) a material diminution of the Covered Employee’s authority, duties, or responsibilities, relative to the Covered Employee’s authority, duties, or responsibilities in effect immediately prior to such reduction; provided, however, that solely with respect to the Tier 2 Covered Employees whose names are indicated with an asterisk (“*”) on Appendix A attached hereto, a reduction of authority, duties, or responsibilities that occurs solely as a necessary and direct consequence of the Company undergoing a Change of Control and being made part of a larger entity will not be considered material, (ii) a material diminution by the Company in the Base Pay of the Covered Employee as in effect immediately prior to such reduction; provided, however, that following a Change of Control, a comparable reduction of the Base Pay of substantially all other executives of the consolidated entity that includes the Company will not constitute “Good Reason”, (iii) the relocation of the Covered Employee to a facility or a location more than fifty (50) miles from his or her then present location, or (iv) the failure of the Company to obtain the assumption of the Plan by any successor in accordance with Section 21 below; provided, however, that the Covered Employee must provide written notice to the Board of the condition that could constitute a “Good Reason” event within ninety (90) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days (the “Cure Period”) of such written notice.

          2.14 “Involuntary Termination” means a termination of employment of a Covered Employee under the circumstances described in Sections 4.1 and 5.1.

          2.15 “Participation Agreement” means the individual agreement (a form of which is shown in Appendix C) provided by the Administrator to an employee of the Company designating such employee as a Covered Employee under the Plan, which has been signed and accepted by the employee.

          2.16 “Plan” means the Atmel Corporation Change of Control Severance and Plan, as set forth in this document, and as hereafter amended from time to time.

          2.17 “Section 16 Officer” means a U.S. employee of the Company who has been designated by the Board, at its discretion and consistent with applicable law, as being subject to the reporting requirements

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of Section 16 of the Securities Exchange Act of 1934, as amended.

          2.18 “Section 409A Limit” means the lesser of two (2) times: (i) the Covered Employee’s annualized compensation based upon the annual rate of pay paid to the Covered Employee during his or her taxable year preceding the Covered Employee’s taxable year in which the Covered Employee’s separation from service occurs as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Covered Employee’s employment is terminated.

          2.19 “Severance Benefits” means the compensation and other benefits the Covered Employee will be provided pursuant to Section 5.

          2.20 “Target Bonus” means, with respect to a Covered Employee, the Covered Employee’s target bonus pursuant to the Company’s applicable corporate bonus plan (i) at the rate in effect for the fiscal year in which the Covered Employee’s Involuntary Termination occurs and (ii) assuming one hundred percent (100%) achievement of the Covered Employee’s and the Company’s performance objectives, if any. Notwithstanding the foregoing, the Covered Employee’s Target Bonus for purposes of the Plan shall be deemed to be the amount received as a bonus by the Covered Employee for the Company’s fiscal year preceding the date of the Covered Employee’s termination of employment if a target bonus has not been established for the then current fiscal year.

          2.21 “Tier 1 Covered Employee” means (i) with respect to the Change of Control Severance Benefits provided pursuant to Section 4, a Covered Employee who has been designated by the Administrator under Tier 1 as shown on Appendix A attached hereto and (ii) with respect to the Severance Benefits provided pursuant to Section 5, a Covered Employee who has been designated by the Administrator under Tier 1 as shown on Appendix B attached hereto.

          2.22 “Tier 2 Covered Employee” means with respect to the Change of Control Severance Benefits provided pursuant to Section 4, a Covered Employee who has been designated by the Administrator under Tier 2 as shown on Appendix A attached hereto.

     3. Eligibility for Change of Control Severance Benefits and Severance Benefits. An individual is eligible for the Change of Control Severance Benefits or the Severance Benefits under the Plan, in the amount set forth in Section 4 or Section 5, respectively, only if he or she is a Covered Employee on the date he or she experiences an Involuntary Termination.

     4. Change of Control Severance Benefits.

          4.1 Involuntary Termination in Connection with a Change of Control. If, at any time within the Change of Control Determination Period, (i) a Covered Employee terminates his or her employment with the Company (or any parent or subsidiary of the Company) for Good Reason, or (ii) the Company (or any parent or subsidiary of the Company) terminates such Covered Employee’s employment due to death, Disability, or other than for Cause, then, subject to the Covered Employee’s compliance with Section 7, the Covered Employee shall receive the following Change of Control Severance Benefits from the Company:

               4.1.1 Cash Severance Benefits.

                    4.1.1.1 Tier 1 Covered Employee. If the Covered Employee is a Tier 1 Covered Employee, he or she shall be entitled to (i) a lump sum payment in cash equal to one (1) times the Covered Employee’s Base Pay and (ii) a lump sum payment in cash equal to the Covered Employee’s Target

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Bonus, prorated to the date of the Covered Employee’s Involuntary Termination. The prorated amount of the Covered Employee’s Target Bonus that is payable in accordance with the preceding sentence will be calculated by multiplying the Covered Employee’s Target Bonus by a fraction with the numerator equal to the number of days during the year in which his or her Involuntary Termination occurs that the Covered Employee was employed by the Company, and the denominator equal to 365;

                    4.1.1.2 Tier 2 Covered Employee. If the Covered Employee is a Tier 2 Covered Employee, he or she shall be entitled to (i) a lump sum payment in cash equal to 0.75 times the Covered Employee’s Base Pay and (ii) a lump sum payment in cash equal to the Covered Employee’s Target Bonus, prorated to the date of the Covered Employee’s termination. The prorated amount of the Covered Employee’s Target Bonus that is payable in accordance with the preceding sentence will be calculated by multiplying the Covered Employee’s Target Bonus by a fraction with the numerator equal to the number of days during the year in which his or her Involuntary Termination occurs that the Covered Employee was employed by the Company, and the denominator equal to 365.

               4.1.2 Continued Medical Benefits. If the Covered Employee, and any spouse and/or dependents of the Covered Employee (“Family Members”), has coverage on the date of the Covered Employee’s Involuntary Termination under a group health plan sponsored by the Company, the Company will pay the total applicable premium cost for continued group health plan coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, 29 U.S.C. Sections 1161-1168; 26 U.S.C. Section 4980B(f), as amended, and all applicable regulations (referred to collectively as “COBRA”), provided that the Covered Employee is eligible for and validly elects to continue coverage under COBRA for the Covered Employee and his Family Members, as follows:

                    4.1.2.1 Tier 1 Covered Employee. For a period of up to twelve (12) months.

                    4.1.2.2 Tier 2 Covered Employee. For a period of up to nine (9) months.

               4.1.3 Equity Award Accelerated Vesting. Except as otherwise provided in an appendix attached hereto with respect to Covered Employees employed in one or more jurisdictions outside the United States, one hundred percent (100%) of each Tier 1 Covered Employee’s and each Tier 2 Covered Employee’s Equity Compensation Awards automatically shall accelerate and all restrictions or repurchase rights applicable thereto shall immediately lapse so as to become fully vested and exercisable. The period over which such Equity Compensation Awards may be exercised shall be governed by the applicable provisions of the Company’s stock plans and related award agreements.

               4.1.4 Outplacement Assistance. The Covered Employee shall be entitled to transitional outplacement benefits in accordance with the policies and guidelines of the Company as in effect immediately prior to the Change of Control.

     5. Severance Benefits.

          5.1 Involuntary Termination Other Than During the Change of Control Determination Period. If, at any time before or after the Change of Control Determination Period, the Company (or any parent or subsidiary of the Company) terminates a Tier 1 Covered Employee’s employment due to death, Disability, or other than for Cause, then, subject to the Covered Employee’s compliance with Section 7, the Tier 1 Covered Employee shall be entitled to (i) a lump sum payment in cash equal to one (1) times the Covered Employee’s Base Pay, (ii) a lump sum payment in cash equal to the Covered Employee’s Target Bonus, prorated to the date of the Covered Employee’s Involuntary Termination and (iii) if the Tier 1 Covered Employee and his Family Members have coverage on the date of the Tier 1 Covered Employee’s Involuntary Termination under a group health plan sponsored by the Company, the Company will pay the total applicable premium cost for continued group health plan coverage under COBRA, provided that the Tier 1 Covered Employee is eligible for and validly elects to continue coverage under COBRA for the Tier 1 Covered Employee and his Family Members, for a period of up to twelve (12 ) months. The prorated amount of the

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Covered Employee’s Target Bonus that is payable in accordance with the preceding sentence will be calculated by multiplying the Covered Employee’s Target Bonus by a fraction with the numerator equal to the number of days during the year in which his or her Involuntary Termination occurs that the Covered Employee was employed by the Company, and the denominator equal to 365.

     6. Parachute Payments. In the event that the severance and other benefits provided for in this Plan or otherwise payable or provided to the Covered Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 6, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Employee’s severance benefits hereunder shall be either

               (a) delivered in full, or

               (b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Covered Employee on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code. Unless the Company and the Covered Employee otherwise agree in writing, any determination required under this Section 6 shall be made in writing in good faith by the Company’s independent tax accountants immediately prior to the Change of Control (the “Accountants”). In the event of a reduction in accordance with subsection (b) above, the reduction will occur, with respect to such severance and other benefits considered “parachute payments” within the meaning of Section 280G of the Code, in accordance with the following:

               (x) Assignment of Values. Each payment will be assigned an “Economic Value” and a “280G Value.” The 280G Value will equal the value of the payment for purposes of Section 280G of the Code as determined by the Accountants in accordance with Section 280G of the Code and applicable Treasury Regulations. The Economic Value will be determined as follows:

                    (1) Cash payments. The Economic Value of cash payments will equal the 280G Value of each such payment.

                    (2) Equity awards.

                         A. Options and Stock Appreciation Rights. The Economic Value of a Share (as defined below) subject to a stock option or stock appreciation right will be the difference equal to (i) the fair market value of such Share as of the date the 280G Value of the Share is determined for purposes of this Section, minus (ii) the per share exercise price of the award.

                         B. Restricted Stock and Restricted Stock Units. The Economic Value of a Share subject to a restricted stock or restricted stock unit award will be the difference equal to (i) the fair market value of such Share as of the date the 280G Value of the Share is determined for purposes of this Section, less (ii) the per share purchase price of the award, if any.

                         C. For purposes of this Section 6, each share of common stock subject to each stock option, stock appreciation right, restricted stock award and restricted stock unit award, the payment or vesting acceleration of which constitutes a parachute payment within the meaning of Section 280G of the Code (a “Share”), will be a separate “payment.” As a result, an Economic Value, 280G Value, and 280G Ratio (as defined below) will be determined for each Share. For purposes of illustration only, assume that the Covered Employee is granted an option on January 1, 2008, covering 500 Shares at a per share exercise price of $5. The option is scheduled to vest in equal annual installments of 250 Shares on January 1, 2010 and January 1, 2011. However, if a change of control occurs and the Covered Employee is terminated without cause, the Covered Employee is entitled to 100% vesting acceleration. On March 1, 2009, a change of control occurs with a deal price of $10 and the Covered Employee is terminated without cause. The Accountants determine that the

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Covered Employee’s severance benefits should be reduced in accordance with this Section 6 and that the amount of the 280G Value to be reduced is $100. The Accountants determine that the Economic Value, 280G Value, and 280G Ratio for each of the 500 Shares subject to the option are as follows:

                              (i) The Economic Value for each Share is $5 (i.e., $10 deal price less the $5 per share exercise price).

                              (ii) The 280G Value of each Share that would have vested on January 1, 2010 (the “2010 Shares”), is $1, as determined by the Accountants based on appropriate assumptions used in calculating the 280G Value in accordance with Section 280G of the Code and applicable Treasury Regulations.

                              (iii) The 280G Value of each Share that would have vested on January 1, 2011 (the “2011 Shares”), is $2, as determined by the Accountants based on appropriate assumptions used in calculating the 280G Value in accordance with Section 280G of the Code and applicable Treasury Regulations.

                              (iv) The 280G Ratio of each 2010 Share is 5:1 (i.e., $5 Economic Value divided by the $1 280G Value).

                              (v) The 280G Ratio of each 2011 Share is 5:2 (.i.e., the $5 Economic Value divided by the $2 280G Value).

                              The 280G Ratio of a 2011 Share is lower than the 280G Ratio of a 2010 Share. Consequently, the Accountants will reduce the 2011 Shares first. As each 2011 Share has a 280G Value of $2, the Accountants must reduce the 2011 Shares by 50 Shares (i.e., reducing the 2011 Shares by 50 Shares will reduce the Covered Employee’s aggregate 280G Value by $100 (50 Shares multiplied by $2). After taking the reduction into account, the Covered Employee vests in a total of 450 Shares (i.e., 250 Shares that would have vested on January 1, 2010 and 200 Shares that would have vested on January 1, 2011).

                    (3) Other Benefits and Payments. The Economic Value of each payment attributable to Company-paid continued coverage under a group health plan sponsored by the Company and outplacement assistance, if any, will equal the 280G Value of each payment, such that the 280G Ratio for each such payment will be equal to one (1).

               (y) Ranking of Payments. After the 280G Value and Economic Value of each payment are determined, the Accountants will rank the payments in order of increasing 280G Ratio as follows: the payment with the lowest 280G Ratio will be ranked first and all other payments will be ranked in ascending order with respect to their 280G Ratios with the payment with the highest 280G Ratio ranked last. For this purpose, the “280G Ratio” will mean, with respect to each payment, the ratio determined by dividing: (1) the Economic Value of the payment by (2) the 280G Value of the payment. For purposes of clarity, the Accountants will determine a separate 280G Ratio for each Share.

               (z) Reduction of Parachute Payments. The portion of each payment that is a parachute payment under Section 280G of the Code will be reduced in the order in which the payments have been ranked in accordance with subsection (y) above. For purposes of clarity, a Share or the acceleration of a Share, as applicable, may be reduced in whole Shares only and may not be reduced by a fraction of such Share. In the event that two or more payments have the same 280G Ratio, the portion of each payment that is a parachute payment will be reduced in accordance with the following rules:

                    (1) Cash Payments.

                         A. With respect to two or more cash payments that have the same 280G Ratio, such payments will be reduced on a pro-rata basis.

                         B. Any cash payments that have the same 280G Ratio as payments that are not cash payments will be reduced prior to reducing the payments that are not cash payments.

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                    (2) Equity Awards.

                         A. With respect to two or more Shares, if the Shares have the same 280G Ratio, the order of reduction of such Shares will be based on the 280G Value of the Shares. Shares with a higher 280G Value will be subject to earlier reduction, such that a Share with the highest 280G Value will be reduced first and a Share with the lowest 280G Value will be reduced last.

                         B. In the event that two or more Shares (i) have the same 280G Ratio and (ii) have the same 280G Value, the Shares will be subject to reduction based on the dates of grant of the equity awards covering such Shares. Shares subject to equity awards granted earlier will be subject to earlier reduction, such that a Share subject to an equity award with the earliest grant date will be reduced first and a Share subject to an equity award with the most recent grant date will be reduced last. Notwithstanding the foregoing, if any one or more Shares subject to one or more nonstatutory stock options have the same 280G Ratio as any one or more Shares subject to one or more incentive stock options, Shares subject to incentive stock options will be subject to reduction only after Shares subject to nonstatutory stock options with the same 280G Ratio have been reduced in full.

                         C. Any Shares that have the same 280G Ratio as payments attributable to Company-paid continued coverage under a group health plan sponsored by the Company or outplacement assistance, if any, will be reduced prior to any such other payments having the same 280G Ratio that are neither cash nor Shares, provided that cash payments and Shares with the same 280G Ratio have been reduced in full.

                    (3) Other Benefits and Payments. With respect to two or more payments that: (A) have the same 280G Ratio and (B) are payments attributable to Company-paid continued coverage under a group health plan sponsored by the Company or outplacement assistance, if any, such payments will be subject to pro rata reduction, provided that cash payments and Shares with the same 280G Ratio have been reduced in full.

          For purposes of making the calculations required by this Section 6, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Covered Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6.

     7. Conditions to Receipt of Severance.

          7.1 Release Agreement. As a condition to receiving Change of Control Severance Benefits or Severance Benefits under this Plan, each Covered Employee will be required to sign a waiver and release of all claims arising out of his or her Involuntary Termination and employment with the Company and its subsidiaries and affiliates (the “Release”). The form of release that the Covered Employee will be required to sign will be determined as follows: (i) if a Tier 1 Covered Employee experiences an Involuntary Termination at any time before or after the Change of Control Determination Period and is entitled to Severance Benefits under Section 5.1, the Covered Employee will be required to sign the form of release attached hereto as Appendix D-1 (if the Covered Employee is a U.S. employee of the Company) or F-1 (if the Covered Employee is a non-U.S. employee of the Company); (ii) if a Change of Control is triggered by an occurrence described in Sections 2.5(i) or (ii) or Section 2.5(iii) (provided that the occurrence described in Section 2.5(iii) is approved by the Board), each Tier 1 Covered Employee and Tier 2 Covered Employee who incurs an Involuntary Termination during the Change of Control Determination Period will be required to sign the form of release attached hereto as Appendix D-1 or Appendix D-2 (if the Covered Employee is a U.S. employee of the Company), respectively, or F-1 or F-2 (if the Covered Employee is a non-U.S. employee of the Company), respectively; or (iii) if a Change of Control is triggered by an occurrence described in Section 2.5(iii) that is not approved by the Board or an occurrence described in Section 2.5(iv), each Tier 1 Covered Employee or Tier 2 Covered Employee that incurs an Involuntary Termination during the Change of Control Determination Period will be required to sign the

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form of release attached hereto as Appendix E-1 or Appendix E-2 (if the Covered Employee is a U.S. employee of the Company), respectively, or Appendix G-1 or G-2 (if the Covered Employee is a non-U.S. employee of the Company), respectively. For purposes of the Plan, the term "Release" shall refer to the form of release that the Covered Employee is required to execute in accordance with the preceding sentence. The Release will include specific information regarding the amount of time the Covered Employee will have to consider the terms of the Release and return the signed agreement to the Company. In no event will the period to return the Release be longer than sixty (60) days, inclusive of any revocation period set forth in the Release, following the later of the Covered Employee’s Involuntary Termination or the Change of Control (the “Release Period”).

          7.2 Non-solicitation. As a condition to receiving Change of Control Severance Benefits or Severance Benefits under this Plan, each Covered Employee agrees that the Covered Employee will not solicit any employee of the Company for employment other than at the Company, as follows:

               7.2.1 Tier 1 Covered Employee. During the Covered Employee’s employment with the Company and for twelve (12) months following his or her termination.

               7.2.2 Tier 2 Covered Employee. During the Covered Employee’s employment with the Company and for nine (9) months following his or her termination.

          Public solicitation, such as by taking out ads in a newspaper, advertising on the web and the like, not specifically aimed at employees of the Company, will not constitute a breach of this Section 7.2.

          7.3 Nondisparagement. During the Covered Employee’s employment with the Company and, for a Tier 1 Covered Employee and Tier 2 Covered Employee, for twelve (12) months or nine (9) months following his or termination, respectively, the Covered Employee and the Company will not knowingly and materially disparage, libel, slander, or otherwise make any materially derogatory statements regarding the other; provided that the Company’s obligations under this Section 7.3 shall apply only to the Company’s executive officers and members of its Board of Directors (the “Board”) who serve in such capacities during the course of the Covered Employee’s employment with the Company and only for so long as each such officer or member of the Board is an employee or director of the Company; provided further that the Company’s obligations under this Section 7.3 extend only to those communications that are made by the above-referenced officers or directors in their capacities as officers or directors of the Company. Notwithstanding the foregoing, nothing contained in the Plan will be deemed to restrict the Covered Employee, the Company or any of the Company’s current or former officers and/or directors from providing information to any governmental or regulatory agency or body (or in any way limit the content of any such information) to the extent they are requested or required to provide such information pursuant a subpoena or as otherwise required by applicable law or regulation, or in accordance with any governmental investigation or audit relating to the Company. Further, nothing contained in this Section 7.3 shall in any way limit the rights or relief that the Covered Employee or Company may have under common law or otherwise with respect to the conduct prohibited in this paragraph.

          7.4 Other Requirements. A Covered Employee’s receipt of severance payments pursuant to Section 4.1 or 5.1 will be subject to the Covered Employee continuing to comply with the provisions of this Section 7 and the terms of any confidential information agreement, proprietary information and inventions agreement and such other appropriate agreement between the Covered Employee and the Company. Benefits under this Plan shall terminate immediately for a Covered Employee if such Covered Employee, at any time, violates any such agreement or the provisions of this Section 7.

     8. Timing of Benefits.

          8.1 Timing of Change of Control Severance Benefits. Subject to Section 10 below, the

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Change of Control Severance Benefits that do not constitute Deferred Compensation Separation Benefits (as defined in Section 10 below) shall commence or be paid, as applicable, as soon as administratively practicable but within ten (10) calendar days following the later of the date of the Covered Employee’s termination of employment (or, if required by Section 10, the Covered Employee’s separation from service) or the Change of Control or, if later, on the date the Release becomes effective. Subject to Section 10 below, the Change of Control Severance Benefits that do constitute Deferred Compensation Separation Benefits will commence or be paid as applicable, as follows:

               8.1.1 If the Covered Employee’s Release Period ends on or before December 15 of the calendar year in which the Covered Employee’s Involuntary Termination or, if later, the Change of Control occurs, his or her Deferred Compensation Separation Benefits will commence or be made, as applicable, on or before December 31 of that calendar year.

               8.1.2 If the Covered Employee’s Release Period ends after December 15 of the calendar year in which the Covered Employee’s Involuntary Termination or, if later, the Change of Control occurs, his or her Deferred Compensation Separation Benefits will commence or be paid, as applicable, on the later of (a) the first payroll date in the calendar year next following the calendar year of the Covered Employee’s Involuntary Termination or (b) the first payroll date following the date his or her Release becomes effective, subject to Section 10 below.

          8.2 Timing of Severance Benefits. Subject to Section 10 below, the Severance Benefits that do not constitute Deferred Compensation Separation Benefits (as defined in Section 10 below) shall commence or be paid, as applicable, as soon as administratively practicable but within ten (10) calendar days following the date of the Covered Employee’s termination of employment (or, if required by Section 10, the Covered Employee’s separation from service) or, if later, on the date the Release becomes effective. Subject to Section 10 below, the Severance Benefits that do constitute Deferred Compensation Separation Benefits will commence or be paid as applicable, as follows:

               8.2.1 If the Covered Employee’s Release Period ends on or before December 15 of the calendar year in which the Covered Employee’s Involuntary Termination occurs, his or her Deferred Compensation Separation Benefits will commence or be made, as applicable, on or before December 31 of that calendar year.

               8.2.2 If the Covered Employee’s Release Period ends after December 15 of the calendar year in which the Covered Employee’s Involuntary Termination occurs, his or her Deferred Compensation Separation Benefits will commence or be paid, as applicable, on the later of (a) the first payroll date in the calendar year next following the calendar year of the Covered Employee’s Involuntary Termination or (b) the first payroll date following the date his or her Release becomes effective, subject to Section 10 below.

     9. Non-Duplication of Benefits. Notwithstanding any other provision in the Plan to the contrary, the Change of Control Severance Benefits and Severance Benefits provided hereunder (or alternatively and if applicable, provided under the Company’s VP Change of Control Severance Plan (the “VP Plan”), if a Covered Employee is also a participant of the VP Plan)1 are intended to be and are exclusive and in lieu of any other change of control and severance benefits or payments to which the Covered Employee may otherwise be entitled, either at law, tort, or contract, in equity, or under the Plan, in the event of any termination of the Covered Employee’s employment. The Covered Employee will be entitled to no change of control or severance benefits or payments upon a termination of employment that constitute an Involuntary Termination other than those benefits expressly set forth herein and those benefits required to be provided by applicable law or as negotiated in accordance with applicable law. Notwithstanding the foregoing, if the Covered Employee is entitled to any benefits other than the benefits under the Plan by operation of applicable law or as negotiated in

 

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For the avoidance of doubt, if a Covered Employee also is a “Covered Employee” under the VP Plan, then for so long as the VP Plan remains in effect, the Covered Employee shall receive benefits under the VP Plan rather than under this Plan).

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accordance with applicable law, his or her benefits under the Plan shall be reduced by the value of the benefits the Covered Employee receives by operation of applicable law or as negotiated in accordance with applicable law, as determined by the Administrator in its discretion.

     10. Section 409A.

          10.1 Notwithstanding anything to the contrary in the Plan, no Deferred Compensation Separation Benefits (as defined below) or other severance benefits that are exempt from Section 409A (as defined below) pursuant to Treasury Regulation Section 1.409A-1(b)(9) will become payable until the Covered Employee has a “separation from service” within the meaning of Section 409A of the Code and the final regulations and any guidance promulgated thereunder (“Section 409A”). Further, if the Covered Employee is subject to Section 409A and is a “specified employee” within the meaning of Section 409A at the time of the Covered Employee’s separation from service (other than due to death), then any Deferred Compensation Separation Benefits otherwise due to the Covered Employee on or within the six (6) month period following his or her separation from service will accrue during such six (6) month period and will become payable in a lump sum payment (less applicable withholding taxes) on the date six (6) months and one (1) day following the date of the Covered Employee’s separation from service. All subsequent payments of Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. For purposes of clarity, the following severance benefits shall not constitute Deferred Compensation Separation Benefits: (A) the vesting acceleration of outstanding awards of stock options, stock appreciation rights or restricted stock described in Section 4.1.3 unless such awards include deferral or other features that cause such awards to be subject to Section 409A; (B) the Company-paid continued group health plan coverage described in Section 4.1.2; and (C) any other payment or benefit that satisfies the conditions described in Section 10.2 below. Notwithstanding anything herein to the contrary, if the Covered Employee dies following his or her separation from service but prior to the six (6) month anniversary of his or her date of separation, then any payments delayed in accordance with this paragraph will be payable in a lump sum (less applicable withholding taxes) to the Covered Employee’s estate as soon as administratively practicable after the date of his or her death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. For purposes of the Plan, “Deferred Compensation Separation Benefits” will mean the severance payments or benefits payable to the Covered Employee, if any, pursuant to the Plan that, when considered together with any other severance payments or separation benefits, is considered deferred compensation under Section 409A.

          10.2 Each payment and benefit payable under the Plan is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. Any severance payment that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute a Deferred Compensation Separation Benefit. Any severance payment that entitles the Covered Employee to taxable reimbursements or taxable in-kind benefits covered by Section 1.409A-1(b)(9)(v) shall not constitute a Deferred Compensation Separation Benefit. Any severance payment or portion thereof that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit shall not constitute a Deferred Compensation Separation Benefit.

          10.3 It is the intent of this Plan to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Notwithstanding anything to the contrary in the Plan, including but not limited to Section 14, the Company reserves the right to amend the Plan as it deems necessary or advisable, in its sole discretion and without the consent of the Covered Employees, to comply with Section 409A of the Code or to otherwise avoid income recognition under Section 409A of the Code prior to the actual payment of Change of Control Severance Benefits or Severance Benefits or imposition of any additional tax (provided that no such amendment shall materially reduce the benefits provided hereunder).

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     11. Withholding. The Company will withhold from any Change of Control Severance Benefits or Severance Benefits all federal, state, local and other taxes required to be withheld therefrom and any other required payroll deductions.

     12. Administration. The Plan will be administered and interpreted by the Administrator (in his or her sole discretion). The Administrator is the “named fiduciary” of the Plan for purposes of ERISA and will be subject to the fiduciary standards of ERISA when acting in such capacity. Any decision made or other action taken by the Administrator prior to a Change of Control with respect to the Plan, and any interpretation by the Administrator prior to a Change of Control of any term or condition of the Plan, or any related document, will be conclusive and binding on all persons and be given the maximum possible deference allowed by law. Following a Change of Control, any decision made or other action taken by the Administrator with respect to the Plan, and any interpretation by the Administrator of any term or condition of the Plan, or any related document that (i) does not affect the benefits payable under the Plan shall not be subject to review unless found to be arbitrary and capricious or (ii) does affect the benefits payable under the Plan shall not be subject to review unless found to be unreasonable or not to have been made in good faith. In accordance with Section 2.1, the Administrator may, in its sole discretion and on such terms and conditions as it may provide, delegate in writing to one or more officers of the Company all or any portion of its authority or responsibility with respect to the Plan; provided, however, that any Plan amendment or termination or any other action that could reasonably be expected to increase significantly the cost of the Plan must be approved by the Board or the Compensation Committee of the Board.

     13. Eligibility to Participate. To the extent that the Administrator has delegated administrative authority or responsibility to one or more officers of the Company in accordance with Sections 2.1 and 12, each such officer will not be excluded from participating in the Plan if otherwise eligible, but he or she is not entitled to act or pass upon any matters pertaining specifically to his or her own benefit or eligibility under the Plan. The Administrator will act upon any matters pertaining specifically to the benefit or eligibility of each such officer under the Plan.

     14. Amendment or Termination. The Company, by action of the Administrator, reserves the right to amend or terminate the Plan at any time, without advance notice to any Covered Employee and without regard to the effect of the amendment or termination on any Covered Employee or on any other individual. Any amendment or termination of the Plan will be in writing. Notwithstanding the preceding, (a) any amendment to the Plan that causes an individual or group of individuals to cease to be a Covered Employee will not be effective unless it both is approved by the Administrator and communicated to the affected individual in writing prior to the Change of Control Determination Period and (b) once a Covered Employee has incurred an Involuntary Termination, no amendment or termination of the Plan may, without that Covered Employee’s written consent, reduce or alter to the detriment of the Covered Employee, the Severance Benefits payable to that Covered Employee (including, without limitation, imposing additional conditions or modifying the timing of payment). In addition, notwithstanding the preceding, once the Change of Control Determination Period has begun, the Company may not, without a Covered Employee’s written consent, amend or terminate the Plan in any way, nor take any other action, that (a) prevents that Covered Employee from becoming eligible for Severance Benefits or Change of Control Severance Benefits under the Plan or (b) reduces or alters to the detriment of the Covered Employee the Severance Benefits or Change of Control Severance Benefits payable, or potentially payable, to a Covered Employee under the Plan (including, without limitation, imposing additional conditions or modifying the timing of payment). For the avoidance of doubt, “Change of Control Severance Benefits payable, or potentially payable” shall include any Change of Control Severance Benefits payable pursuant to an appendix attached hereto with respect to Covered Employees employed in one or more jurisdictions outside the United States as contemplated in Section 4. Any action of the Company in amending or terminating the Plan will be taken in a non-fiduciary capacity. Notwithstanding anything in the Plan to the contrary, the Plan shall have an initial term of five (5) years commencing on the Effective Date and shall automatically terminate on the fifth (5th) anniversary of the Effective Date unless otherwise extended by the Compensation Committee of the Board, in its discretion. On or about the fourth (4th) anniversary of the Effective Date, the Compensation Committee of the Board will review

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the Plan in good faith and determine whether to extend the initial term of the Plan.

     15. Claims Procedure. Any employee or other person who believes he or she is entitled to any payment under the Plan may submit a claim in writing to the Administrator within ninety (90) days of the earlier of (i) the date the claimant learned the amount of their Change of Control Severance Benefits or Severance Benefits under the Plan or (ii) the date the claimant learned that he or she will not be entitled to any benefits under the Plan. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice will also describe any additional information needed to support the claim and the Plan’s procedures for appealing the denial. The denial notice will be provided within ninety (90) days after the claim is received. If special circumstances require an extension of time (up to ninety (90) days), written notice of the extension will be given within the initial ninety (90) day period. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision on the claim. The Administrator has delegated the claims review responsibility to the Company’s Vice President, Human Resources, except in the case of a claim filed by or on behalf of the Company’s Vice President, Human Resources, in which case, the claim will be reviewed by the Company’s Chief Executive Officer.

     16. Appeal Procedure. If the claimant’s claim is denied, the claimant (or his or her authorized representative) may apply in writing to the Administrator for a review of the decision denying the claim. Review must be requested within sixty (60) days following the date the claimant received the written notice of their claim denial or else the claimant loses the right to review. The claimant (or representative) then has the right to review and obtain copies of all documents and other information relevant to the claim, upon request and at no charge, and to submit issues and comments in writing. The Administrator will provide written notice of its decision on review within sixty (60) days after it receives a review request. If additional time (up to sixty (60) days) is needed to review the request, the claimant (or representative) will be given written notice of the reason for the delay. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice shall also include a statement that the claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents and other information relevant to the claim and a statement regarding the claimant’s right to bring an action under Section 502(a) of ERISA. The Administrator has delegated the appeals review responsibility to the Company’s Vice President, Human Resources, except in the case of an appeal filed by or on behalf of the Company’s Vice President, Human Resources, in which case, the appeal will be reviewed by the Company’s Chief Executive Officer.

     17. Legal Expenses. In the event that, on or following a Change of Control that is triggered by an occurrence described in Section 2.5(iii) that is not approved by the Board or an occurrence described in Section 2.5(iv), either party brings an action to enforce or effect its rights under this Plan, the Company will reimburse the Covered Employee for his or her costs and expenses incurred in connection with the action (including, without limitation, in connection with the Covered Employee defending himself against an action brought by the Company to enforce or effect its rights under the Plan), including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees. Notwithstanding the preceding, no reimbursement will be made to the Covered Employee for an action originally brought by the Covered Employee if an entity of competent jurisdiction issues a final order that the Covered Employee’s action was frivolous. This right to reimbursement will be subject to the following additional requirements: (i) the Covered Employee must submit documentation of the costs, expenses and fees to be reimbursed within thirty (30) days of the end of his or her taxable year in which the costs, expenses and fees were incurred; (ii) the amount of any reimbursement provided during his or her taxable year shall not affect any expenses eligible for reimbursement in any other taxable year; (iii) the

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reimbursement of eligible costs and expenses shall be made by the Company within thirty (30) days of the Covered Employee’s submission of documentation of the costs, expenses and fees to be reimbursed but no later than the last day of the Covered Employee’s taxable year that immediately follows the taxable year in which the costs or expenses were incurred; and (iv) the right to any such reimbursement shall not be subject to liquidation or exchange for another benefit or payment.

     18. Source of Payments. All Change of Control Severance Benefits and Severance Benefits will be paid in cash from the general funds of the Company; no separate fund will be established under the Plan, and the Plan will have no assets. No right of any person to receive any payment under the Plan will be any greater than the right of any other general unsecured creditor of the Company.

     19. Inalienability. In no event may any current or former employee of the Company or any of its subsidiaries or affiliates sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan. At no time will any such right or interest be subject to the claims of creditors nor liable to attachment, execution or other legal process.

     20. No Enlargement of Employment Rights. Neither the establishment or maintenance of the Plan, any amendment of the Plan, nor the making of any benefit payment hereunder, will be construed to confer upon any individual any right to be continued as an employee of the Company. The Company expressly reserves the right to discharge any of its employees at any time, with or without cause. However, as described in the Plan, a Covered Employee may be entitled to benefits under the Plan depending upon the circumstances of his or her termination of employment.

     21. Successors. Any successor to the Company of all or substantially all of the Company’s business and/or assets (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) will assume the obligations under the Plan and agree expressly to perform the obligations under the Plan 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 the Plan, the term “Company” will include any successor to the Company’s business and/or assets which become bound by the terms of the Plan by operation of law, or otherwise.

     22. Applicable Law. The provisions of the Plan will be construed, administered and enforced in accordance with ERISA and, to the extent applicable, the internal substantive laws of the State of California (with the exception of its conflict of laws provisions).

     23. Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.

     24. Headings. Headings in this Plan document are for purposes of reference only and will not limit or otherwise affect the meaning hereof.

     25. Indemnification. The Company hereby agrees to indemnify and hold harmless the officers and employees of the Company, and the members of its boards of directors, from all losses, claims, costs or other liabilities arising from their acts or omissions in connection with the administration, amendment or termination of the Plan, to the maximum extent permitted by applicable law. This indemnity will cover all such liabilities, including judgments, settlements and costs of defense. The Company will provide this indemnity from its own funds to the extent that insurance does not cover such liabilities. This indemnity is in addition to and not in lieu of any other indemnity provided to such person by the Company.

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     26. Additional Information.

 

 

 

Plan Name:

 

Atmel Corporation Change of Control and Severance Plan

 

 

 

Plan Sponsor:

 

Atmel Corporation

 

 

2325 Orchard Parkway

 

 

San Jose, California 95131

 

 

 

Identification Numbers:

 

EIN: - 77-0051991

 

 

PLAN: 503

 

 

 

Plan Year:

 

Company’s Fiscal Year

 

 

 

Plan Administrator:

 

Atmel Corporation

 

 

Attention: Administrator of the Atmel Corporation Change of Control and Severance Plan

 

 

2325 Orchard Parkway

 

 

San Jose, California 95131

 

 

 

 

 

(408) 441-0311 

 

 

 

Agent for Service of Legal Process:

 

Atmel Corporation

 

 

Attention: General Counsel

 

 

2325 Orchard Parkway

 

 

San Jose, California 95131

 

 

 

 

 

(408) 441-0311 

 

 

 

 

 

Service of process may also be made upon the Administrator.

 

 

 

Type of Plan

 

Severance Plan/Employee Welfare Benefit Plan

 

 

 

Plan Costs

 

The cost of the Plan is paid by the Employer.

     27. Statement of ERISA Rights.

     As a Covered Employee under the Plan, you have certain rights and protections under ERISA:

     (a) You may examine (without charge) all Plan documents, including any amendments and copies of all documents filed with the U.S. Department of Labor. These documents are available for your review in the Company’s Human Resources Department.

     (b) You may obtain copies of all Plan documents and other Plan information upon written request to the Administrator. A reasonable charge may be made for such copies.

     In addition to creating rights for Covered Employees, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan (called "fiduciaries”) have a duty to do so prudently and in the interests of you and the other Covered Employees. No one, including the Company or any other person, may fire you or otherwise discriminate against you in any way to prevent you from

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obtaining a benefit under the Plan or exercising your rights under ERISA. If your claim for a severance benefit is denied, in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the denial of your claim reviewed. (The claim review procedure is explained in Sections 15 and 16 above.)

     Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials and do not receive them within thirty (30) days, you may file suit in a federal court. In such a case, the court may require the Administrator to provide the materials and to pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim which is denied or ignored, in whole or in part, you may file suit in a federal court. If it should happen that you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court.

     In any case, the court will decide who will pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds that your claim is frivolous.

     If you have any questions regarding the Plan, please contact the Administrator. If you have any questions about this statement or about your rights under ERISA, you may contact the nearest area office of the Employee Benefits Security Administration (formerly the Pension and Welfare Benefits Administration), U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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Appendix A

 

 

 

Tier

 

Employee Name2

1

 

[Includes Executive Officers]

 

 

 

2

 

[Names]

 

2

 

In accordance with Section 2.9, each U.S. employee of the Company who becomes a Section 16 Officer on or after the Effective Date shall be deemed to have been designated by the Administrator to participate in the Plan under Tier 1 as of the date he or she becomes a Section 16 Officer and shall become a Covered Employee upon execution of a Participation Agreement with the Company. Appendix A shall be deemed to include each employee described in the preceding sentence, notwithstanding that Appendix A has not been updated to include such employee’s name in the table above.

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Appendix B

 

 

 

Tier

 

Employee Name3

1

 

[Includes Executive Officers]

 

3

 

In accordance with Section 2.9, each U.S. employee of the Company who becomes a Section 16 Officer on or after the Effective Date shall be deemed to have been designated by the Administrator to participate in the Plan under Tier 1 as of the date he or she becomes a Section 16 Officer and shall become a Covered Employee upon execution of a Participation Agreement with the Company. Appendix B shall be deemed to include each employee described in the preceding sentence, notwithstanding that Appendix B has not been updated to include such employee’s name in the table above.

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Appendix C

ATMEL CORPORATION

CHANGE OF CONTROL AND SEVERANCE PLAN

PARTICIPATION AGREEMENT

     This Participation Agreement (the “Agreement”) with respect to participation in the Atmel Corporation Change of Control and Severance Plan (the “Plan”) is made as of [Click and Type Date] by and between Atmel Corporation (the “Company”) and [Click and Type Name] (“Employee”). Capitalized terms not otherwise defined herein shall have the meanings given to them in the Plan.

     WHEREAS, the Company has adopted and sponsors the Plan, a copy of which is attached hereto; and

     WHEREAS, Employee has been selected to participate in the Plan in accordance with and subject to the terms of the Plan and this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises made herein, the parties hereby agree as follows:

     1. Participation. Employee has been designated as a Covered Employee in the Plan, subject to Employee executing this Agreement pursuant to which Employee has agreed to, among other things, (i) waive his or her rights to any severance benefits provided under any other agreement with the Company or arrangement or plan sponsored by the Company and (ii) amend any existing employment or other agreement by and between Employee and the Company pursuant to which Employee is entitled to receive severance benefits to remove the severance provisions from such agreement. The terms and conditions of Covered Employee’s participation in the Plan are as set forth in the Plan and herein.

     2. Severance Benefits. [INSERT THE FOLLOWING FOR TIER 1 COVERED EMPLOYEES IDENTIFIED ON BOTH APPENDICES A AND B: Upon satisfaction of the conditions set forth in Sections 4 or 5 of the Plan, as applicable, Employee will be eligible to receive the Change of Control Severance Benefits set forth in Section 4.1 of the Plan or the Severance Benefits set forth in Section 5.1 of the Plan, as applicable, subject to compliance with Section 7 of the Plan.] [INSERT THE FOLLOWING FOR TIER 1 COVERED EMPLOYEES AND TIER 2 COVERED EMPLOYEES IDENTIFIED ON APPENDIX A ONLY: Upon satisfaction of the conditions set forth in Section 4 of the Plan, Employee will be eligible to receive the Change of Control Severance Benefits set forth in Section 4.1 of the Plan, subject to compliance with Section 7 of the Plan.]

     3. Condition to Receipt of Benefits. Employee acknowledges and agrees that notwithstanding anything herein, in the Plan, or otherwise to the contrary, Employee shall not be entitled to any payments or benefits from the Company under the Plan or this Agreement in connection with an Involuntary Termination of Employee’s employment with the Company unless Employee has signed and not revoked a waiver and release of claims agreement in a form reasonably satisfactory to the Company. Employee also acknowledges and agrees that receipt of any [INSERT THE FOLLOWING FOR TIER 1 COVERED EMPLOYEES IDENTIFIED ON BOTH APPENDICES A AND B: Change of Control Severance Benefits or Severance Benefits] [INSERT THE FOLLOWING FOR TIER 1 COVERED EMPLOYEES AND TIER 2 COVERED EMPLOYEES IDENTIFIED ON APPENDIX A ONLY: Change of Control Severance Benefits] will be subject to

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Employee’s compliance with the conditions during the time periods set forth in Sections 7.2 through 7.4 of the Plan.

     4. Interaction with Other Severance Benefit Plans or Arrangements. The change of control and severance benefits and payments provided under the Plan are intended to be and are exclusive and in lieu of any other change of control and severance benefits and payments to which Employee may otherwise be entitled, either at law, tort, or contract, in equity, or under the Plan, in the event of any termination of Employee’s employment unless otherwise specifically agreed to by the Employee and the Company in an agreement entered into after the Effective Date of the Plan. Employee agrees that he or she will be entitled to no change of control or severance benefits or payments upon a termination of employment that constitute an Involuntary Termination other than those benefits expressly set forth in the Plan and those benefits required to be provided by applicable law or as negotiated in accordance with applicable law. [INSERT THE FOLLOWING ONLY FOR EMPLOYEES CURRENTLY WITH SEVERANCE PROTECTION: In particular, Employee hereby specifically waives his or her entitlement to change of control and severance benefits and payments pursuant to the [Letter] [Offer Letter] [Employment Agreement] dated [INSERT DATE] by and between Employee and the Company.] Employee further agrees to amend any existing employment or other agreement by and between Employee and the Company pursuant to which Employee is entitled to receive severance benefits to remove the severance provisions from such agreement. Notwithstanding the foregoing, if the Employee is entitled to any benefits other than the benefits under the Plan by operation of applicable law or as negotiated in accordance with applicable law, his or her benefits under the Plan shall be reduced by the value of the benefits the Employee receives by operation of applicable law or as negotiated in accordance with applicable law, as determined by the Administrator in its discretion.

     5. Additional Provisions.

          (a) Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

          (b) Integration; No Oral Modification. This Agreement and the Plan, constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior agreements, written or oral. This Agreement may only be amended in writing signed by the parties hereto.

          (c) Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of the Agreement by such party. Such facsimile copies shall constitute enforceable original documents.

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

          (e) Tax Withholding. All payments made pursuant to the Plan and this Agreement will be subject to withholding of applicable taxes.

          (f) Governing Law. This Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).

     By their signatures below, the Company and Employee agree that participation in the Plan is governed by this Agreement and by the provisions of the Plan, a copy of which is attached hereto and made a part of this

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document. Employee acknowledges receipt of a copy of the Plan, represents that Employee has read and is familiar with its provisions and the provisions of this Agreement, and acknowledges that decisions and determinations by the Administrator under the Plan shall be final and binding on Employee.

(The remainder of this page has been intentionally left blank)

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     IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first set forth above.

 

 

 

 

 

ATMEL CORPORATION

 

EMPLOYEE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 


 

[Click and Type Name]

 


 

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