Exhibit 10.32
NETLOGIC MICROSYSTEMS, INC.
 

 
CHANGE OF CONTROL AGREEMENT
 
This Change of Control Agreement (the “Agreement”) is dated as of April 25,
2011, by and between [___________] (“Employee”) and NetLogic Microsystems, Inc.,
a Delaware corporation (the “Company”).  This Agreement is intended to provide
Employee with certain benefits described herein upon the occurrence of specific
events.
 
RECITALS
 
A.           It is likely that from time to time other entities may consider the
possibility of acquiring the Company, or that a change of control of the Company
may otherwise occur, with or without the approval of the Company’s board of
directors (the “Board of Directors”), and the Board of Directors recognizes that
this possibility may be a distraction to Employee that might cause Employee to
consider alternative employment opportunities.
 
B.   The Board of Directors has determined that it is in the best interests of
the Company and its stockholders to assure that the Company will have the
continued dedication and objectivity of the Employee, notwithstanding the
possibility, threat or occurrence of an acquisition or other change of control
of the Company.
 
C.           The Board of Directors believes it is in the best interests of the
Company and its stockholders to retain Employee and provide incentives to
Employee to continue in the service of the Company.
 
D.           The Board of Directors further believes that it is imperative to
provide Employee with certain benefits upon termination of Employee’s
employment, in connection with a an acquisition or other change of control,
which benefits are intended to provide Employee with financial security and
provide sufficient income and encouragement to Employee to remain an employee of
the Company.
 
E.           To accomplish the foregoing objectives, the Board of Directors has
directed the Company, upon execution of this Agreement by Employee, to agree to
the terms provided in this Agreement.
 
Now therefore, in consideration of the mutual promises, covenants and agreements
contained herein, and in consideration of the continuing employment of Employee
by the Company, the parties hereto agree as follows:
 
1. Definition of Terms.  The following terms referred to in this Agreement shall
have the following meanings:
 
(a) Affiliate.  “Affiliate” means any corporation, partnership, limited
liability company, business trust, or other entity controlling, controlled by or
under common control with the Company.
 
(b) Change of Control.  “Change of Control” means either:
 
(i) a merger or consolidation of the Company with or into another person or the
sale, transfer, or other disposition of all or substantially all of the
Company’s assets to one or more other persons in a single transaction or series
of related transactions, unless securities possessing more than 50% of the total
combined voting power of the survivor’s or acquiror’s outstanding securities (or
the securities of any parent thereof) are held by a person or persons who held
securities possessing more than 50% of the total combined voting power of the
Company’s outstanding securities immediately prior to that transaction;
 
(ii) any person or group of persons (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) directly
or indirectly acquires beneficial ownership (determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of securities possessing more than 50% of
the total combined voting power of the Company’s outstanding securities pursuant
to a tender or exchange offer made directly to the Company’s stockholders that
the Board of Directors does not recommend such stockholders accept, other than
(A) the Company or an Affiliate, (B) an employee benefit plan of the Company or
any of its Affiliates, (C) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its Affiliates, or (D) an
underwriter temporarily holding securities pursuant to an offering of such
securities;
 
(iii) over a period of 36 consecutive months or less, there is a change in the
composition of the Board of Directors such that a majority of the members of the
Board of Directors (rounded up to the next whole number, if a fraction) ceases,
by reason of one or more proxy contests for the election of directors, to be
composed of individuals who either (A) have been directors continuously since
the beginning of that period, or (B) have been elected or nominated for election
as directors during such period by at least a majority of the directors
described in the preceding clause (A) who were still in office at the time that
election or nomination was approved by the Board of Directors; or
 
(iv) a majority of the Board of Directors votes in favor of a decision that a
Change of Control has occurred.
 
(c) Cause.  “Cause” means the commission of any act of fraud, embezzlement or
dishonesty by Employee, any unauthorized use or disclosure by Employee of
confidential information or trade secrets of the Company (or any parent or
subsidiary of the Company), or any other intentional misconduct by Employee
adversely affecting the business affairs of the Company (or any parent or
subsidiary of the Company) in a material manner.  The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which the Company (or
any parent or subsidiary of the Company) may consider as grounds for the
dismissal or discharge of any person in the employment of the Company (or any
parent or subsidiary of the Company).
 
(d) Involuntary Termination.  “Involuntary Termination” is one that occurs by
reason of Employee’s dismissal for any reason other than Cause or Employee’s
voluntary resignation following:  (i) a change in position accepted with the
Company or its subsidiaries that materially reduces Employee’s level of
responsibility; provided that for the avoidance of doubt, Employee's position
shall be deemed changed and the Employee’s level of responsibility shall be
deemed materially reduced if Employee does not effectively have the same
position and level of responsibility with respect to the acquiring entity, or
its parent organization (if the Company or another subsidiary or affiliate of
the acquiring entity survives the Change of Control) that Employee had with the
Company immediately prior to the Change of Control; or (ii) a material reduction
in Employee’s base salary; or (iii) Employee’s relocation by more than 50 miles
from the principal office where Employee is located immediately prior to the
Change of Control.  There shall not be an Involuntary Termination by reason of
an occurrence described in clause (ii) or (iii) if Employee consents to the
reduction or relocation, as the case may be.
 
2. At-Will Employment.  The Company and Employee acknowledge that Employee’s
employment is and shall continue to be at-will, as defined under applicable law,
and that Employee’s employment with the Company may be terminated by either
party at any time for any or no reason.  If Employee’s employment terminates for
any reason, Employee shall not be entitled to any payments, benefits, award or
compensation other than as provided in this Agreement.  The terms of this
Agreement shall terminate upon the earlier of (i) the date, on or following a
Change of Control, upon which Employee ceases to be employed by the Company,
other than as a result of an Involuntary Termination (as defined below); or (ii)
the date that all obligations of the parties hereunder have been satisfied.  A
termination of the terms of this Agreement pursuant to the preceding sentence
shall be effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement.  The rights and duties created by this Section 1 may not be
modified in any way except by a written agreement executed by an officer of the
Company upon direction from the Board of Directors.
 
3. Vesting Acceleration Upon Termination of Employment.  In the event of (i) a
Change of Control and (ii)  the termination of Employee’s employment by the
Company other than for Cause, or  due to an Involuntary Termination, as of. or
at any time within 12 months following, the effective date of a Change of
Control, then each outstanding equity award held by Employee (including, without
limitation, stock options and awards of restricted stock units) that is not
fully vested on the date of termination of employment shall become immediately
vested as to all of the then unvested portion of such award, and any provision
of any equity award then held by Employee that provides for less than full
vesting of all unvested shares shall be disregarded because the terms of this
Agreement shall govern whenever these two conditions are met.
 
4. Parachute Payments.  In the event that the acceleration benefit provided for
in this Agreement and other benefits provided for in any other  agreements
between Employee and the Company (collectively, the “Benefits”) constitute
“parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”) and, but for this paragraph, would be
subject to the excise tax imposed by Section 4999 of the Code, the Benefits
shall be provided either: (x) in full, or (y) as to such lesser amount which
would result in no portion of such Benefits being subject to excise tax under
Section 4999 of the Code, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by Employee on an after-tax
basis, of the greatest amount of Benefits, notwithstanding that all or some
portion of such Benefits may be taxable under Section 4999 of the Code.  Unless
the Company and Employee otherwise agree in writing, any determination required
under this paragraph shall be made in writing by the tax advisors designated by
the Company (the “Advisors”), whose determination shall be conclusive and
binding upon Employee and the Company for all purposes.  For purposes of making
the calculations required by this paragraph, the Advisors 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 Employee shall furnish to the
Advisors such information and documents as the Advisors may reasonably request
in order to make a determination under this paragraph.  The Company shall bear
all costs the Advisors may reasonably incur in connection with any calculations
contemplated by this paragraph.  In the event that a reduction in payments
and/or benefits is required under this Section 4, such reduction shall occur in
the following order (as applicable): (1) reduction of cash payments; (2)
reduction of acceleration of vesting of equity awards; and (3) reduction of
other benefits paid to Employee.  If the acceleration of vesting of options and
shares is to be reduced, such acceleration of vesting shall be cancelled in the
reverse order of the highest price option grant and highest purchase price per
share, as applicable, down to the lowest priced option grant and lowest purchase
price per share.
 
5. Limitations and Conditions on Benefits.
 
(a) Income and Employment Taxes.  Employee agrees that he/she shall be
responsible for any applicable taxes of any nature (including any penalties or
interest that may apply to such taxes) that the Company reasonably determines
apply to any benefit provided hereunder, and that his/her receipt of any benefit
hereunder is conditioned on his/her satisfaction of any applicable withholding
or similar obligations that apply to such benefit.
 
(b) Release Prior to Receipt of Benefits.  As a condition of receiving the
benefits under this Agreement, Employee shall execute, and allow to become
effective, a release of claims agreement (the “Release”) not later than 21 days
following Employee’s termination date in the form provided by the Company.  Such
Release shall specifically relate to all of Employee’s rights and claims in
existence at the time of such execution and shall, among other things, confirm
Employee’s obligations under the Company’s standard form of proprietary
information agreement.  Unless the Release is timely executed by Employee,
delivered to the Company, and becomes effective within the required period (the
date on which the Release becomes effective, the “Release Date”), Employee will
not receive the vesting acceleration benefit provided for under this Agreement.
 
(c) Code Section 409A Matters.  It is the intent of this Agreement to comply
with the requirements of Code Section 409A so that none of the benefits to be
provided hereunder will be subject to the additional tax imposed under Code
Section 409A, and any ambiguities herein will be interpreted to so comply.
 
6. Conflicts.  Employee represents that his/her performance of all the terms of
this Agreement will not breach any other agreement to which Employee is a
party.  Employee has not, and will not during the term of this Agreement, enter
into any oral or written agreement in conflict with any of the provisions of
this Agreement.  Employee further represents that he/she is entering into or has
entered into an employment relationship with the Company of his/her own free
will and that he/she has not been solicited as an employee in any way by the
Company.
 
7. Successors.  Any successor to the Company (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of the Company’s business and/or assets (including, but
not limited to, the acquirer and the surviving entity in the Change of
Control)  shall assume the obligations under this Agreement and agree expressly
to perform the obligations under this Agreement in the same manner and to the
same extent as the Company would be required to perform such obligations in the
absence of a succession.  The terms of this Agreement and all of Employee’s
rights hereunder shall inure to the benefit of, and be enforceable by,
Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
 
8. Notice.  Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally
delivered, when sent by facsimile or when mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid.  Mailed notices to Employee
shall be addressed to Employee at the home address which Employee most recently
communicated to the Company in writing.  In the case of the Company, mailed and
faxed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
 
9. Miscellaneous Provisions.
 
(a) No Duty to Mitigate.  Employee shall not be required to mitigate the amount
of any benefit contemplated by this Agreement (whether by seeking new employment
or in any other manner), nor shall any such benefit be reduced by any earnings
that Employee may receive from any other source.
 
(b) Waiver.  No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by Employee and by an authorized officer of the Company (other than
Employee).  No waiver by either party of any breach of, or of compliance with,
any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
 
(c) Whole Agreement.  No agreements, representations or understandings (whether
oral or written and whether express or implied) which are not expressly set
forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof.  This Agreement supersedes any agreement
concerning similar subject matter dated prior to the date of this Agreement and
by execution of this Agreement both parties agree that any such predecessor
agreement shall be deemed null and void.
 
(d) Choice of Law.  The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of California
without reference to conflict of laws provisions.
 
(e) Severability.  If any term or provision of this Agreement or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions of
this Agreement or the application of such terms and provisions to circumstances
other than those as to which it is held invalid or unenforceable, and a suitable
and equitable term or provision shall be substituted therefor to carry out,
insofar as may be valid and enforceable, the intent and purpose of the invalid
or unenforceable term or provision.
 
(f) Arbitration.  Employee and the Company agree to attempt to settle any
disputes arising in connection with this Agreement through good faith
consultation.  In the event that Employee and the Company are not able to
resolve any such disputes within fifteen (15) days after notification in writing
to the other, Employee and the Company agree that any dispute or claim arising
out of or in connection with this Agreement will be finally settled by binding
arbitration in Santa Clara County, California in accordance with the rules of
the American Arbitration Association by one arbitrator mutually agreed upon by
the parties.  The arbitrator will apply California law, without reference to
rules of conflicts of law or rules of statutory arbitration, to the resolution
of any dispute.  Except as set forth in subparagraph (e) above, the arbitrator
shall not have authority to modify the terms of this Agreement.  The Company
shall pay the costs of the arbitration proceeding.  Each party shall, unless
otherwise determined by the arbitrator, bear its or his/her own attorneys’ fees
and expenses, provided, however that if Employee prevails in an arbitration
proceeding, the Company shall reimburse Employee for his/her reasonable
attorneys’ fees and costs.  Judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.  Notwithstanding the
foregoing to the contrary, the Company and Employee may apply to any court of
competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this
arbitration provision.
 
(g) Legal Fees and Expenses.  The parties shall each bear their own expenses,
legal fees and other lees incurred in connection with the execution of this
Agreement.
 
(h) No Assignment of Benefits.  The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor’s
process, and any action in violation of this Section 9(h) shall he void.
 
(i) Assignment by Company.  The Company may assign its rights under this
Agreement to an affiliate, and an affiliate may assign its rights under this
Agreement to another affiliate of the Company or to the Company.  In the case of
any such assignment, the term “Company” when used in a section of this Agreement
shall mean the corporation that actually employs the Employee.
 
(j) Counterparts.  This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.
 

 
 

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The parties have executed this Agreement on the date first written above.
 
NETLOGIC MICROSYSTEMS, INC.
By:
 
Title:
 
Address:
 

EMPLOYEE
Signature:
 
Addres:
 
 

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