Exhibit 10.1

 

GSI TECHNOLOGY, INC.

EXECUTIVE RETENTION AND SEVERANCE PLAN

 

1.                                      ESTABLISHMENT AND PURPOSE OF PLAN

 

1.1                               Establishment.  The GSI Technology, Inc.
Executive Retention and Severance Plan (the “Plan”) is hereby established by the
Compensation Committee of the Board of Directors of GSI Technology, Inc.,
effective September 30, 2014 (the “Effective Date”).

 

1.2                               Purpose.  The Company draws upon the
knowledge, experience and advice of its executive officers and key employees in
order to manage its business for the benefit of the Company’s stockholders.  Due
to the widespread awareness of the possibility of mergers, acquisitions and
other strategic alliances in the Company’s industry, the topics of compensation
and other employee benefits in the event of a Change in Control are issues in
competitive recruitment and retention efforts.  The Committee recognizes that
the possibility or pending occurrence of a Change in Control could lead to
uncertainty regarding the consequences of such an event and could adversely
affect the Company’s ability to attract, retain and motivate present and future
executive officers and key employees.  The Committee has therefore determined
that it is in the best interests of the Company and its stockholders to provide
for the continued dedication of its executive officers and key employees
notwithstanding the possibility or occurrence of a Change in Control by
establishing this Plan to provide its Participants with specified compensation
and benefits in the event of a termination of employment under circumstances
specified herein.

 

2.                                      DEFINITIONS AND CONSTRUCTION

 

2.1                               Definitions.  Whenever used in this Plan, the
following terms shall have the meanings set forth below:

 

(a)                                 “Base Salary Rate” means the greater of:

 

(1)                                 the Participant’s monthly base salary rate
in effect immediately prior to the Participant’s termination of employment
(without giving effect to any reduction in the Participant’s base salary rate
constituting Good Reason); or

 

(2)                                 the Participant’s monthly base salary rate
in effect immediately prior to the applicable Change in Control.

 

For this purpose, base salary does not include any bonuses, commissions, fringe
benefits, car allowances, other irregular payments or any other compensation
except base salary.

 

(b)                                 “Base Salary Severance Period” means:

 

(1)                                 with respect to a Participant who is the
Chief Executive Officer, the greater of (i) eighteen (18) months or (ii) one
month for each full or partial year of the Participant’s employment with the
Company Group;

 

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(2)                                 with respect to a Participant who is an
Executive Officer, the greater of (i) twelve (12) months or (ii) one month for
each full or partial year of the Participant’s employment with the Company
Group; and

 

(3)                                 with respect to a Participant who is a Key
Employee, a period of twelve (12) months or such shorter period determined by
the Committee and specified by the Participant’s Participation Agreement.

 

(c)                                  “Board” means the Board of Directors of the
Company.

 

(d)                                 “Cause” means the occurrence of any of the
following, as determined in good faith by a vote of not less than two-thirds of
the entire membership of the Board at a meeting of the Board called and held in
whole or in part for such purpose:

 

(1)                                 the Participant’s commission of any material
act of fraud, embezzlement, dishonesty, intentional falsification of any
employment or other Company Group records, or any criminal act which impairs
Participant’s ability to perform his or her duties with the Company Group; or

 

(2)                                 the Participant’s intentional misconduct
adversely affecting the business or affairs of the Company Group; or

 

(3)                                 the Participant’s breach of fiduciary duty
owed to any member of the Company Group for personal profit or material failure
to abide by the Company’s code of conduct or other policies (including, without
limitation, policies relating to confidentiality and reasonable workplace
conduct); or

 

(4)                                 the Participant’s unauthorized use or
disclosure of confidential information or trade secrets of any member of the
Company Group; or

 

(5)                                 the Participant’s conviction (including any
plea of guilty or nolo contendere) of a felony causing material harm to the
reputation and standing of any member of the Company Group.

 

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

 

(1)                                 any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other
fiduciary holding securities of the Company under an employee benefit plan of
the Company, becomes the “beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of (i) the outstanding
shares of common stock of the Company or (ii) the total combined voting power of
the Company’s then-outstanding securities entitled to vote generally in the
election of directors;

 

(2)                                 the Company is party to a merger,
consolidation or similar corporate transaction, or series of related
transactions, which results in the holders of the voting securities of the
Company outstanding immediately prior to such transaction(s) failing to retain

 

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immediately after such transaction(s) direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
securities entitled to vote generally in the election of directors of the
Company or the surviving entity outstanding immediately after such
transaction(s);

 

(3)                                 the sale or disposition of all or
substantially all of the Company’s assets or consummation of any transaction, or
series of related transactions, having similar effect (other than a sale or
disposition to one or more subsidiaries of the Company); or

 

(4)                                 a change in the composition of the Board
within any consecutive twelve (12) month period as a result of which fewer than
a majority of the directors are Incumbent Directors;

 

Notwithstanding the foregoing, to the extent that any amount constituting
Section 409A Deferred Compensation would become payable under this Plan by
reason of a Change in Control, such amount shall become payable only if the
event constituting a Change in Control would also constitute a change in
ownership or effective control of the Company or a change in the ownership of a
substantial portion of the assets of the Company within the meaning of
Section 409A.

 

(f)                                   “Change in Control Period” means a period:

 

(1)                                 beginning on the date occurring two
(2) months prior to the consummation of a Change in Control, and

 

(2)                                 ending on the second anniversary of the
consummation of such Change in Control.

 

(g)                                  “Chief Executive Officer” means the
individual who serves as the Company’s Chief Executive Officer as appointed by
the Board, including the individual who, immediately prior to the consummation
of a Change in Control, serves as the Company’s Chief Executive Officer as
appointed by the Board.

 

(h)                                 “COBRA” means the group health plan
continuation coverage provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 and any applicable regulations promulgated
thereunder.

 

(i)                                     “Code” means the Internal Revenue Code
of 1986, as amended, or any successor thereto and any applicable regulations
promulgated thereunder.

 

(j)                                    “Committee” means the Compensation
Committee of the Board.

 

(k)                                 “Company” means GSI Technology, Inc., a
Delaware corporation, and, following a Change in Control, a Successor that
agrees to assume all of the rights and obligations of the Company under this
Plan or a Successor which otherwise becomes bound by operation of law under this
Plan.

 

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(l)                                     “Company Group” means the group
consisting of the Company and each present or future parent and subsidiary
corporation or other business entity thereof.

 

(m)                             “Equity Award” means any Option, Restricted
Stock, Restricted Stock Units, performance shares, performance units or other
stock-based compensation award granted by the Company or any other Company Group
member to a Participant, including any such award which is assumed by, or for
which a replacement award is substituted by, the Successor or any other member
of the Company Group in connection with a Change in Control.

 

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

 

(o)                                 “Exchange Act” means the Securities Exchange
Act of 1934, as amended.

 

(p)                                 “Executive Officer” means an individual,
other than the Chief Executive Officer, appointed by the Board as an executive
officer of the Company subject to Section 16 of the Exchange Act and serving in
such capacity both upon becoming a Participant and immediately prior to the
first to occur of (1) a condition constituting Good Reason with respect to such
individual, (2) such individual’s termination of employment with the Company
Group or (3) the consummation of a Change in Control.

 

(q)                                 “Good Reason” means:

 

(1)                                 The occurrence during a Change in Control
Period of any of the following conditions without the Participant’s informed
written consent, which condition(s) remain(s) in effect thirty (30) days after
written notice to the Company from the Participant of such condition(s) and
which notice must have been given within ninety (90) days following the initial
occurrence of such condition(s):

 

(i)                                     a material, adverse change in the
Participant’s position, duties, substantive functional responsibilities or
reporting responsibilities, causing the Participant’s position to be of
materially lesser rank or responsibility within the Company or an equivalent
business unit of its parent, as measured against the Participant’s authority,
duties or responsibilities immediately prior to the Change in Control; or

 

(ii)                                  a material, adverse change in the
authority, duties, substantive functional responsibilities or reporting
responsibilities of the officer to whom the Participant is required to report,
causing such officer’s position to be of materially lesser rank or
responsibility within the Company or an equivalent business unit of its parent,
as measured against the authority, duties and responsibilities of the officer to
whom the Participant was required to report immediately prior to the Change in
Control, including, in the case of the Chief Executive Officer, a requirement
that the Participant report to a corporate officer or employee instead of
reporting directly to the board of directors of the Company Group or the
Successor; or

 

(iii)                               a material decrease in the Participant’s
Base Salary Rate or a material decrease in the Participant’s target bonus amount
(subject to applicable

 

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performance requirements with respect to the actual amount of bonus compensation
earned by the Participant); or

 

(iv)                              any failure by the Company Group to
(i) continue to provide the Participant with the opportunity to participate, on
terms materially no less favorable than those in effect for the benefit of any
employee group which customarily includes a person holding the employment
position or a comparable position with the Company Group then held by the
Participant, in any benefit or compensation plans and programs, including, but
not limited to, the Company Group’s life, disability, health, dental, medical,
savings, profit sharing, stock purchase and retirement plans, if any, in which
the Participant was participating immediately prior to such failure, or their
equivalent, or (ii) provide the Participant with all other material fringe
benefits (or their equivalent) from time to time in effect for the benefit of
any employee group which customarily includes a person holding the employment
position or a comparable position with the Company Group then held by the
Participant; or

 

(v)                                 the relocation of the Participant’s work
place for the Company Group to a location that increases the regular commute
distance between the Participant’s residence and work place by more than
thirty-five (35) miles (one-way), or, following the consummation of a Change in
Control, the imposition of business travel requirements substantially more
demanding of the Participant than such travel requirements existing immediately
prior to the Change in Control; or

 

(vi)                              following the consummation of a Change in
Control, any material breach of this Plan by the Company Group with respect to
the Participant.

 

(2)                                 The existence of Good Reason shall not be
affected by the Participant’s temporary incapacity due to physical or mental
illness not constituting a Permanent Disability.  The Participant’s continued
employment for a period not exceeding one hundred eighty (180) days following
the initial occurrence of any condition constituting Good Reason shall not
constitute consent to, or a waiver of rights with respect to, such condition. 
For the purposes of any determination regarding the existence of Good Reason,
any claim by the Participant that Good Reason exists shall be presumed to be
correct unless the Company establishes to the Board that Good Reason does not
exist, and the Board, acting in good faith, affirms such determination by a vote
of not less than two-thirds of its entire membership (excluding the Participant
if the Participant is a member of the Board).

 

(r)                                    “Health Benefit Continuation Period”
means the period beginning upon the Participant’s termination of employment and
ending on the earliest to occur of (1) the date on which the Participant
receives substantially similar coverage from another employer; (2) the date the
Participant is no longer eligible to receive COBRA continuation coverage; and
(3) the end of the Base Salary Severance Period applicable to the Participant.

 

(s)                                   “Incumbent Director” means a director who
either (1) is a member of the Board as of the Effective Date, or (2) is elected,
or nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination,
but (3) who was not elected or nominated in connection with an actual or
threatened proxy contest relating to the election of directors of the Company.

 

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(t)                                    “Involuntary Termination” means the
occurrence of either of the following events during a Change in Control Period:

 

(1)                                 termination by the Company Group of the
Participant’s employment for any reason other than Cause; or

 

(2)                                 the Participant’s termination of employment
with the Company Group for Good Reason, provided that such termination occurs
within one hundred eighty (180) days following the initial occurrence of the
condition constituting Good Reason;

 

provided, however, that Involuntary Termination shall not include any
termination of the Participant’s employment which is (i) for Cause, (ii) a
result of the Participant’s death or Permanent Disability, or (iii) a result of
the Participant’s voluntary termination of employment other than for Good
Reason.

 

(u)                                 “Key Employee” means an individual employed
by the Company Group, other than the Chief Executive Officer or an Executive
Officer, who is designated by the Committee as a Key Employee eligible to
participate in the Plan.

 

(v)                                 “Option” means any option to purchase shares
of the capital stock of the Company or of any other member of the Company Group
granted to a Participant by the Company or any other Company Group member prior
to a Change in Control or termination of employment, including any such option
which is assumed or continued by, or for which a replacement option is
substituted by, the Successor or any other member of the Company Group in
connection with the Change in Control.

 

(w)                               “Participant” means the Chief Executive
Officer, each Executive Officer, and each Key Employee designated by the
Committee to participate in the Plan and who has executed a Participation
Agreement.

 

(x)                                 “Participation Agreement” means an Agreement
to Participate in the GSI Technology, Inc. Executive Retention and Severance
Plan in the form attached hereto as Exhibit A or in such other form as the
Committee may approve from time to time; provided, however, that, after a
Participation Agreement has been entered into between a Participant and the
Company, it may be modified only by a supplemental written agreement executed by
both the Participant and the Company.  The terms of such forms of Participation
Agreement need not be identical with respect to each Participant.

 

(y)                                 “Permanent Disability” means a Participant’s
incapacity due to bodily injury or disease which (1) prevents the Participant
from engaging in the full-time performance of the Participant’s duties for a
period of six (6) consecutive months and (2) will, in the opinion of a qualified
physician, be permanent and continuous during the remainder of the Participant’s
life.

 

(z)                                  “Prorated Annual Bonus” means the product
of:

 

(1)                                 the greatest of:

 

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(i)                                     the aggregate of all annual bonuses that
would be earned by the Participant at the targeted annual rate (assuming
attainment of 100% of all applicable performance goals) under the terms of the
programs, plans or agreements providing for such bonuses in which the
Participant was participating for the fiscal year of the Participant’s
termination of employment; or

 

(ii)                                  the aggregate of all bonuses earned by the
Participant (whether or not actually paid) under the terms of the programs,
plans or agreements providing for such bonuses for the fiscal year of the
Company immediately preceding the fiscal year of the Change in Control; or

 

(iii)                               the aggregate of all bonuses earned by the
Participant (whether or not actually paid) under the terms of the programs,
plans or agreements providing for such bonuses for the fiscal year of the
Company immediately preceding the fiscal year of the Participant’s termination
of employment (if later than the fiscal year immediately preceding the fiscal
year of the Change in Control); and

 

(2)                                 a ratio, the numerator of which the number
of calendar days of the Participant’s employment with the Company Group during
the fiscal year of the Participant’s employment termination, and the denominator
of which is the number of calendar days contained in such fiscal year.

 

(aa)                          “Prorated Annual Bonus Benefit” means:

 

(1)                                 with respect to a Participant who is the
Chief Executive Officer, an amount equal to 150% of the Participant’s Prorated
Annual Bonus;

 

(2)                                 with respect to a Participant who is an
Executive Officer, an amount equal to 100% of the Participant’s Prorated Annual
Bonus; and

 

(3)                                 with respect to a Participant who is a Key
Employee, an amount equal to 100% of the Participant’s Prorated Annual Bonus or
such lesser percentage of the Participant’s Prorated Annual Bonus determined by
the Committee and specified by the Participant’s Participation Agreement.

 

(bb)                          “Release” means a general release of all known and
unknown claims against the Company and its affiliates and their stockholders,
directors, officers, employees, agents, successors and assigns substantially in
the form attached hereto as Exhibit B (“General Release of Claims [Age 40 and
over]”) or Exhibit C (“General Release of Claims [Under age 40]”), whichever is
applicable, with any modifications thereto determined by legal counsel to the
Company to be necessary or advisable to comply with applicable law or to
accomplish the intent of Section 8 (Exclusive Remedy) hereof.

 

(cc)                            “Release Deadline Date” means the sixtieth
(60th) day following the later of (1) the date of the Participant’s Involuntary
Termination or (2) the date of the consummation of the Change in Control.

 

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(dd)                          “Restricted Stock” means any compensatory award of
shares of the capital stock of the Company or of any other member of the Company
Group granted to a Participant by the Company or any other Company Group member
prior to a Change in Control or termination of employment or acquired upon the
exercise of an Option granted prior to a Change in Control or termination of
employment, including any shares issued in exchange for any such shares by a
Successor or any other member of the Company Group in connection with a Change
in Control.

 

(ee)                            “Restricted Stock Units” means any compensatory
award of rights to receive shares of the capital stock or cash in an amount
measured by the value of shares of the capital stock of the Company or of any
other member of the Company Group granted to a Participant by the Company or any
other Company Group member prior to a Change in Control or termination of
employment, including any such rights issued in exchange for any such rights by
a Successor or any other member of the Company Group in connection with a Change
in Control.

 

(ff)                              “Section 409A” means Section 409A of the Code.

 

(gg)                            “Section 409A Deferred Compensation” means
compensation and benefits provided by the Plan that constitute deferred
compensation subject to and not exempted from the requirements of Section 409A.

 

(hh)                          “Separation from Service” means a separation from
service within the meaning of Section 409A.

 

(ii)                                  “Successor” means any successor in
interest to substantially all of the business and/or assets of the Company.

 

2.2                               Construction.  Captions and titles contained
herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan.  Except when otherwise indicated by
the context, the singular shall include the plural and the plural shall include
the singular.  Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise.

 

3.                                      ELIGIBILITY AND PARTICIPATION

 

The Chief Executive Officer and each Executive Officer shall be eligible to
participate in the Plan.  The Committee shall designate those Key Employees who
shall be eligible to become Participants in the Plan.  Notwithstanding the
foregoing, the individuals eligible to become Participants shall be limited to a
select group of management or highly compensated employees within the meaning of
Sections 201, 301 and 404 of ERISA.  To become a Participant, an eligible
individual must execute a Participation Agreement.

 

4.                                      TREATMENT OF EQUITY AWARDS UPON A CHANGE
IN CONTROL

 

4.1                               Options.  Notwithstanding any provision to the
contrary contained in any plan or agreement evidencing an Option held by a
Participant, in the event of a Change in Control in which the surviving,
continuing, successor, or purchasing corporation or other

 

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business entity or parent thereof, as the case may be (the “Acquiror”), does not
assume or continue the Company’s rights and obligations under the
then-outstanding Options held by the Participant or substitute for such Options
substantially equivalent options for the Acquiror’s stock, then the vesting and
exercisability of each such Option shall be accelerated in full effective as of
the date ten (10) days prior to but conditioned upon the consummation of the
Change in Control.

 

4.2                               Other Equity Awards.  Except as set forth in
this Section 4 and Section 5.2(f) below, the treatment of share-based
compensation upon the consummation of a Change in Control shall be determined in
accordance with the terms of the plans or agreements providing for such awards.

 

5.                                      INVOLUNTARY TERMINATION IN CONNECTION
WITH A CHANGE IN CONTROL

 

In the event of a Participant’s Involuntary Termination during a Change in
Control Period, the Participant shall be entitled to receive the compensation
and benefits described in this Section 5.

 

5.1                               Accrued Obligations.  The Participant shall be
entitled to receive:

 

(a)                                 all salary, commissions and accrued but
unused vacation or paid time off earned through the date of the Participant’s
termination of employment;

 

(b)                                 all bonuses earned and vested in accordance
with the terms of the applicable bonus plan, agreement, policy or practice prior
to the date of the Participant’s termination of employment but then remaining
unpaid;

 

(c)                                  reimbursement within ten (10) business days
of submission, such submission to be made within thirty (30) days following the
Participant’s termination of employment, of proper expense reports of all
expenses reasonably and necessarily incurred by the Participant in connection
with the business of the Company Group prior to his or her termination of
employment; and

 

(d)                                 the benefits, if any, under any Company
Group retirement plan, nonqualified deferred compensation plan, share-based
compensation plan or agreement (other than any such plan or agreement pertaining
to Options, Restricted Stock or Restricted Stock Units, or other stock-based
compensation whose treatment is prescribed by Section 4 or Section 5.2(f)),
health benefits plan or other Company Group benefit plan to which the
Participant is entitled pursuant to the terms of such plans or agreements.

 

5.2                               Severance Benefits.  Provided that, on or
before the Release Deadline Date, the Participant executes the Release
applicable to such Participant Company and the period for revocation, if any, of
such Release has lapsed without the Release having been revoked, the Participant
shall be entitled to receive the following severance payments and benefits:

 

(a)                                 Base Salary Severance Benefit.  Within ten
(10) days following the Release Deadline Date, the Company shall pay to the
Participant in a lump sum cash

 

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payment an amount equal to the Participant’s Base Salary Rate multiplied by the
number of months contained in the Participant’s Base Salary Severance Period.

 

(b)                                 Earned but Unvested and Unpaid Bonus. 
Within ten (10) days following the Release Deadline Date, the Company shall pay
to the Participant in a lump sum cash payment an amount equal to the bonuses
earned by the Participant prior to the date of the Participant’s termination of
employment in accordance with the terms of the applicable bonus plan, agreement,
policy or practice but then remaining unvested and unpaid.

 

(c)                                  Annual Bonus Benefit.  Within ten (10) days
following the Release Deadline Date, the Company shall pay to the Participant in
a lump sum cash payment an amount equal to the Participant’s Prorated Annual
Bonus Benefit.

 

(d)                                 Health Benefits.

 

(1)                                 If the Participant timely elects to receive
continued medical, dental and vision benefit coverage pursuant to COBRA
(including, if applicable, continuation coverage for the Participant’s spouse
and dependents), the Company shall pay the premiums for such coverage for the
Participant’s Health Benefit Continuation Period.  Within ten (10) days
following the Release Deadline Date, the Company shall reimburse the Participant
in a lump sum cash payment an amount equal to any premiums paid by the
Participant for such continuation coverage prior to such date.  After the
Company ceases to pay premiums pursuant to this Section, the Participant may, if
eligible, elect to continue healthcare coverage at Participant’s expense in
accordance the provisions of COBRA.

 

(2)                                 Notwithstanding the foregoing, if the
Company determines, that the payment of the COBRA premiums would result in a
violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any
statute or regulation of similar effect (including but not limited to the 2010
Patient Protection and Affordable Care Act, as amended by the 2010 Health Care
and Education Reconciliation Act), then in lieu of providing the COBRA premiums,
the Company, in its sole discretion, may elect to instead pay to the Participant
on the first day of each month of the Participant’s Health Benefit Continuation
Period, a fully taxable cash payment equal to the COBRA premiums for that month
(grossed-up on the basis of the highest marginal federal, state and local income
and employment tax rates applicable to the Participant), subject to applicable
tax withholdings (such amount, the “Special Severance Payment”), for the
remainder of the Health Benefit Continuation Period.  The Participant may, but
is not obligated to, use such Special Severance Payment toward the cost of COBRA
premiums.

 

(e)                                  Life Insurance Benefits.  Subject to
Section 6.2(b), for the Participant’s Base Salary Severance Period, the Company
shall arrange to provide the Participant with life insurance benefits
substantially similar to those provided to the Participant immediately prior to
the date of the Participant’s termination of employment (or if greater,
immediately prior to the Change in Control) or shall reimburse the Participant
for the cost of obtaining such benefits to the extent described below.  Such
life insurance benefits shall be provided to the Participant at the same premium
cost to the Participant and at the same coverage level as in effect employment
(or if greater, immediately prior to the Change in Control.  If the Company is
not reasonably able to continue life insurance benefits coverage under the
Company’s benefit

 

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plans, the Company shall provide substantially equivalent coverage from other
sources or will reimburse (without a tax gross-up) the Participant for premiums
(in excess of the Participant’s premium cost described above) incurred by the
Participant to obtain his or her own such coverage.

 

(f)                                   Acceleration of Vesting of Equity Awards. 
Notwithstanding any provision to the contrary contained in any plan or agreement
evidencing an Equity Award granted to a Participant, but subject to
Section 6.2(e), (i) the vesting, exercisability and settlement of each of the
Participant’s outstanding Equity Awards which were not otherwise accelerated
pursuant to Section 4 shall be accelerated in full so that each Equity Award
held by the Participant shall be immediately exercisable and 100% vested (and,
in the case of Restricted Stock Units, performance shares, performance units and
similar stock-based compensation, shall be settled in full) as of the later of
the date of the Participant’s termination of employment or immediately prior to
the Change in Control, and (ii) each of the Participant’s outstanding Options
shall not cease to be exercisable until the earlier of the date six (6) months
after the date of the Participant’s termination of employment or the expiration
of the Option’s original term (including expiration of the Option upon a Change
in Control if the Acquiror does not assume, continue or substitute for the
Option as described in Section 4.1).

 

5.3                               Indemnification; Insurance.

 

(a)                                 In addition to any rights a Participant may
have under any indemnification agreement previously entered into between the
Company and such Participant (a “Prior Indemnity Agreement”), from and after the
date of the Participant’s Involuntary Termination the Company shall indemnify
and hold harmless the Participant against any costs or expenses (including
attorneys’ fees), judgments, fines, losses, claims, damages or liabilities
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, by
reason of the fact that the Participant is or was a director, officer, employee
or agent of the Company Group, or is or was serving at the request of the
Company Group as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, whether asserted or
claimed prior to, at or after the date of the Participant’s termination of
employment, to the fullest extent permitted under applicable law, and the
Company shall also advance fees and expenses (including attorneys’ fees) as
incurred by the Participant to the fullest extent permitted under applicable
law.

 

(b)                                 For a period of six (6) years from and after
the date of the Participant’s Involuntary Termination, the Company shall use its
best efforts to maintain a policy of directors’ and officers’ liability
insurance for the benefit of such Participant which provides him or her with
coverage no less favorable than that provided for the Company’s continuing
officers and directors.

 

6.                                      CERTAIN FEDERAL TAX CONSIDERATIONS

 

6.1                               Federal Excise Tax Under Section 4999 of the
Code.

 

(a)                                 Excess Parachute Payments.Notwithstanding
any provision of this Plan to the contrary, if any payment or benefit a
Participant would receive pursuant to this

 

11

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Plan or otherwise (collectively, the “Payments”) would constitute a “parachute
payment” within the meaning of Section 280G of the Code, and, but for this
Section 6.1(a), would be subject to the excise tax imposed by Section 4999 of
the Code or any similar or successor provision (the “Excise Tax”), then the
aggregate amount of the Payments will be either (i) the largest portion of the
Payments that would result in no portion of the Payments (after reduction) being
subject to the Excise Tax or (ii) the entire Payments, whichever amount after
taking into account all applicable federal, state and local employment taxes,
income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate, net of the maximum reduction in federal income taxes which could
be obtained from a deduction of such state and local taxes), results in the
Participant’s receipt, on an after-tax basis, of the greatest amount of the
Payments.  Any reduction in the Payments required by this Section will be made
in the following order: (i) reduction of cash payments; (ii) reduction of
accelerated vesting of equity awards other than stock options; (iii) reduction
of accelerated vesting of stock options; and (iv) reduction of other benefits
paid or provided to the Participant.  In the event that acceleration of vesting
of equity awards is to be reduced, such acceleration of vesting will be
cancelled in the reverse order of the date of grant of the Participant’s equity
awards.  If two or more equity awards are granted on the same date, the
accelerated vesting of each award will be reduced on a pro-rata basis.

 

(b)                                 Determination by Tax Firm.The professional
firm engaged by the Company for general tax purposes as of the day prior to the
date of the event that might reasonably be anticipated to result in Payments
that would otherwise be subject to the Excise Tax will perform the foregoing
calculations.  If the tax firm so engaged by the Company is serving as
accountant or auditor for the acquiring company, the Company will appoint a
nationally recognized tax firm to make the determinations required by this
Section.  The Company will bear all expenses with respect to the determinations
by such firm required to be made by this Section.  The Company and the
Participant shall furnish such tax firm such information and documents as the
tax firm may reasonably request in order to make its required determination. 
The tax firm will provide its calculations, together with detailed supporting
documentation, to the Company and the Participant as soon as practicable
following its engagement.  Any good faith determinations of the tax firm made
hereunder will be final, binding and conclusive upon the Company and the
Participant.

 

6.2                               Compliance with Section 409A.  The Company
intends that this Plan (and all payments and other benefits provided under this
Plan) shall be exempt from the requirements of Section 409A to the maximum
extent possible, whether pursuant to the short-term deferral exception described
in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay
plan exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), or
otherwise.  To the extent Section 409A is applicable to such payments, the
Company intends that this Plan (and such payments and benefits) shall comply
with the requirements of Section 409A.  Notwithstanding any other provision of
this Plan to the contrary, this Plan shall be interpreted, operated and
administered in a manner consistent with such intentions.  Without limiting the
generality of the foregoing, and notwithstanding any other provision of this
Plan to the contrary, the provision, time and manner of payment or distribution
of all compensation and benefits provided by the Plan that constitute
Section 409A Deferred Compensation shall be subject to, limited by and construed
in accordance with the requirements of Section 409A, including the following:

 

12

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(a)                                 Separation from Service.  Payments and
benefits constituting Section 409A Deferred Compensation otherwise payable or
provided pursuant to the Plan upon a Participant’s Involuntary Termination shall
be paid or provided only at the time of a termination of the Participant’s
employment which constitutes a Separation from Service.

 

(b)                                 Six-Month Delay Applicable to Specified
Employees.  Payments and benefits constituting Section 409A Deferred
Compensation to be paid or provided pursuant to the Plan upon the Separation
from Service of a Participant who is a “specified employee” within the meaning
of Section 409A (determined using the identification methodology selected by the
Company from time to time, or if none, the default methodology described in
applicable Treasury Regulation) shall be paid or provided only upon the later of
(1) the date that is six (6) months and one (1) day after the date of such
Separation from Service or, if earlier, the date of death of the Participant (in
either case, the “Delayed Payment Date”), or (2) the date or dates on which such
Section 409A Deferred Compensation would otherwise be paid or provided in
accordance with the Plan.  All such amounts that would, but for this Section,
become payable prior to the Delayed Payment Date shall be accumulated and paid
on the Delayed Payment Date.

 

(c)                                  Separate Payments.Each payment made under
this Plan shall be treated as a separate payment, and the right of a Participant
to a series of installment payments under this Plan shall be treated as a right
to a series of separate payments.

 

(d)                                 Expense Reimbursements and In-Kind
Benefits.With regard to any provision in this Plan for reimbursement of expenses
or in-kind benefits, except for any expense, reimbursement or in-kind benefit
provided pursuant to this Plan that does not constitute Section 409A Deferred
Compensation, (i) the right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchange for another benefit, (ii) the amount of
expenses eligible for reimbursement, or in-kind benefits provided, during any
taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be deemed to be violated with regard to expenses
reimbursed under any arrangement covered by Section 105(b) of the Code solely
because such expenses are subject to a limit related to the period the
arrangement is in effect, and (iii) such payments shall be made on or before the
last day of Participant’s taxable year following the taxable year in which the
expense occurred.

 

(e)                                  Equity Awards.  The vesting of any Equity
Award which constitutes Section 409A Deferred Compensation and is held by a
Participant who is a Specified Employee shall be accelerated in accordance with
Section 5.2(f) to the extent applicable; provided, however, that the payment in
settlement of any such Equity Award shall occur on the Delayed Payment Date. 
Equity Awards which vest and become payable upon a Change in Control in
accordance with Section 4 shall not be subject to this Section.

 

7.                                      CONFLICT IN BENEFITS; NONCUMULATION OF
BENEFITS

 

7.1                               Effect of Plan.  The terms of this Plan, when
accepted by a Participant pursuant to an executed Participation Agreement, shall
supersede all prior arrangements, whether written or oral, and understandings
regarding the subject matter of this Plan and, subject to

 

13

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Section 7.2, shall be the exclusive agreement for the determination of any
payments and benefits due to the Participant upon the events described in
Sections 4 and 5.

 

7.2                               Noncumulation of Benefits.  Except as
expressly provided in a written agreement between a Participant and the Company
entered into after the date of such Participant’s Participation Agreement and
which expressly disclaims this Section 7.2 and is approved by the Board or the
Committee, the total amount of payments and benefits that may be received by the
Participant as a result of the events described in Sections 4 and 5 pursuant to
(a) the Plan, (b) any agreement between the Participant and the Company or
(c) any other plan, practice or statutory obligation of the Company, shall not
exceed the amount of payments and benefits provided by this Plan upon such
events (plus any payments and benefits provided pursuant to a Prior Indemnity
Agreement, as described in Section 5.3), and the aggregate amounts payable under
this Plan shall be reduced to the extent of any excess (but not below zero).

 

8.                                      EXCLUSIVE REMEDY

 

The payments and benefits provided by Section 4 and Section 5 (plus any payments
and benefits provided pursuant to a Prior Indemnity Agreement, as described in
Section 5.3), if applicable, shall constitute the Participant’s sole and
exclusive remedy for any alleged injury or other damages arising out of the
cessation of the employment relationship between the Participant and the Company
in the event of the Participant’s Involuntary Termination.  The Participant
shall be entitled to no other compensation, benefits, or other payments from the
Company as a result of the Participant’s Involuntary Termination with respect to
which the payments and benefits described in Section 4, if applicable, and
Section 5 (plus any payments and benefits provided pursuant to a Prior Indemnity
Agreement) have been provided to the Participant, except as expressly set forth
in this Plan or, subject to the provisions of Section 7.2, in a duly executed
employment agreement between Company and the Participant.

 

9.                                      PROPRIETARY AND CONFIDENTIAL INFORMATION

 

The Participant agrees to continue to abide by the terms and conditions of the
confidentiality and/or proprietary rights agreement between the Participant and
the Company or any other member of the Company Group.

 

10.                               NONSOLICITATION

 

If the Company performs its obligations to deliver the payments and benefits
required by Section 4 and Section 5, then for a period equal to the Base Salary
Benefit Period applicable to a Participant following the Participant’s
Involuntary Termination, the Participant shall not, directly or indirectly,
recruit, solicit or invite the solicitation of any employees of the Company or
any other member of the Company Group to terminate their employment relationship
with the Company Group.

 

11.                               NO CONTRACT OF EMPLOYMENT

 

Neither the establishment of the Plan, nor any amendment thereto, nor the
payment or provision of any benefits thereunder shall be construed as giving any
person the right

 

14

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to be retained by the Company, a Successor or any other member of the Company
Group.  Except as otherwise established in a written employment agreement
between the Company and a Participant, the employment relationship between the
Participant and the Company is an “at-will” relationship.  Accordingly, either
the Participant or the Company may terminate the relationship at any time, with
or without cause, and with or without notice except as otherwise provided by
Section 15.  In addition, nothing in this Plan shall in any manner obligate any
Successor or other member of the Company Group to offer employment to any
Participant or to continue the employment of any Participant which it does hire
for any specific duration of time.

 

12.                               CLAIMS FOR BENEFITS

 

12.1                        ERISA Plan.  This Plan is intended to be (a) an
employee welfare benefit plan as defined in Section 3(1) of ERISA and (b) a
“top-hat” plan maintained for the benefit of a select group of management or
highly compensated employees of the Company Group.

 

12.2                        Application for Benefits.  All applications for
payments and/or benefits under the Plan (“Benefits”) shall be submitted to the
Company’s Chief Financial Officer (the “Claims Administrator”), with a copy to
the Company’s Chief Financial Officer.  Applications for Benefits must be in
writing on forms acceptable to the Claims Administrator and must be signed by
the Participant or beneficiary.  The Claims Administrator reserves the right to
require the Participant or beneficiary to furnish such other proof of the
Participant’s expenses, including without limitation, receipts, canceled checks,
bills, and invoices as may be required by the Claims Administrator.

 

12.3                        Appeal of Denial of Claim.

 

(a)                                 If a claimant’s claim for Benefits is
denied, the Claims Administrator shall provide notice to the claimant in writing
of the denial within ninety (90) days after its submission.  The notice shall be
written in a manner calculated to be understood by the claimant and shall
include:

 

(1)                                 The specific reason or reasons for the
denial;

 

(2)                                 References to the specific Plan provisions
on which the denial is based;

 

(3)                                 A description of any additional material or
information necessary for the applicant to perfect the claim and an explanation
of why such material or information is necessary; and

 

(4)                                 An explanation of the Plan’s claims review
procedures and time limits applicable to such procedures, including a statement
of claimant’s right to bring a civil action under ERISA Section 502(a) following
an adverse benefit determination.

 

(b)                                 If special circumstances require an
extension of time for processing the initial claim, a written notice of the
extension and the reason therefor shall be furnished to the claimant before the
end of the initial ninety (90) day period.  In no event shall such extension
exceed ninety (90) days.

 

15

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(c)                                  If a claim for Benefits is denied, the
claimant, at the claimant’s sole expense, may appeal the denial to the Committee
as constituted immediately prior to the applicable Change in Control (the
“Appeals Administrator”), regardless of whether all or any of the members of the
Appeals Administrator continue to be affiliated with the Company following the
Change in Control, within sixty (60) days of the receipt of written notice of
the denial.  In pursuing such appeal the claimant or his or her duly authorized
representative:

 

(1)                                 may request in writing that the Appeals
Administrator review the denial;

 

(2)                                 may review pertinent documents; and

 

(3)                                 may submit issues and comments in writing.

 

(d)                                 The decision on review shall be made within
sixty (60) days of receipt of the request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than one hundred
twenty (120) days after receipt of the request for review.  If such an extension
of time is required, written notice of the extension shall be furnished to the
claimant before the end of the original sixty (60) day period.  The decision on
review shall be made in writing, shall be written in a manner calculated to be
understood by the claimant, and, if the decision on review is a denial of the
claim for Benefits, shall include:

 

(1)                                 The specific reason or reasons for the
denial;

 

(2)                                 References to the specific Plan provisions
on which the denial is based;

 

(3)                                 A statement that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
the Plan and all documents, records and other information relevant to his or her
claim for benefits; and

 

(4)                                 A statement of claimant’s right to bring a
civil action under ERISA Section 502(a) following an adverse benefit
determination.

 

12.4                        Exhaustion of Administrative Remedies.  The
exhaustion of these claims procedures is mandatory for resolving every claim and
dispute arising under the Plan.  As to such claims and disputes:

 

(a)                                 No claimant shall be permitted to commence
any legal action to recover benefits or to enforce or clarify rights under the
Plan under Section 502 or Section 510 of ERISA or under any other provision of
law, whether or not statutory, until these claims procedures have been exhausted
in their entirety; and

 

(b)                                 In any such legal action, all explicit and
implicit determinations by the Claims Administrator (including, but not limited
to, determinations as to whether the claim, or a request for a review of a
denied claim, was timely filed) shall be afforded the maximum deference
permitted by law.

 

16

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13.                               DISPUTE RESOLUTION

 

In the event of any dispute or claim relating to or arising out of this Plan
that is not resolved in accordance with procedure described in Section 12, the
Company and the Participant, each by executing a Participation Agreement, agree
that all such disputes or claims shall be resolved by means of binding
arbitration in Santa Clara County, California before a sole arbitrator, in
accordance with the laws of the State of California for agreements made in that
State or as otherwise required by ERISA.  Any arbitration shall be administered
by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. 
Judgment on the award may be entered in any court having jurisdiction.  The
prevailing party shall be entitled to recover from the losing party its
attorneys’ fees and costs incurred in any action brought to enforce any right
arising out of this Plan.

 

14.                               SUCCESSORS AND ASSIGNS

 

14.1                        Successors of the Company.  The Company shall
require any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, expressly, absolutely and unconditionally to
assume and agree to perform this Plan in the same manner and to the same extent
that the Company would be required to perform it if no such succession or
assignment had taken place.

 

14.2                        Acknowledgment by Company.  If, after a Change in
Control, the Company fails to reasonably confirm that it has performed the
obligation described in Section 14.1 within twenty (20) days after written
request for such confirmation from a Participant, such failure shall be a
material breach of this Plan and shall entitle the Participant to resign for
Good Reason and to receive the benefits provided under this Plan in the event of
Involuntary Termination.

 

14.3                        Heirs and Representatives of Participant.  This Plan
shall inure to the benefit of and be enforceable by the Participants’ personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devises, legatees or other beneficiaries.  If a Participant should
die while any amount would still be payable to the Participant hereunder (other
than amounts which, by their terms, terminate upon the death of the Participant)
if the Participant had continued to live, then all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Plan to the executors, personal representatives or administrators of the
Participant’s estate.

 

15.                               NOTICES

 

15.1                        General.  For purposes of this Plan, notices and all
other communications provided for herein shall be in writing and shall be deemed
to have been duly given when personally delivered or when mailed by United
States certified mail, return receipt requested, or by overnight courier,
postage prepaid, as follows:

 

(a)                                 if to the Company:

 

GSI Technology, Inc.

 

17

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1213 Elko Drive

Sunnyvale, CA 94089

Attention: Chief Executive Officer

 

(b)                                 if to the Participant, at the home address
which the Participant most recently communicated to the Company in writing.

 

Either party may provide the other with notices of change of address, which
shall be effective upon receipt.

 

15.2                        Notice of Termination.  Any termination by the
Company of the Participant’s employment or any resignation from employment by
the Participant shall be communicated by a notice of termination or resignation
to the other party hereto given in accordance with Section 15.1.  Such notice
shall indicate the specific termination provision in this Plan relied upon,
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and shall
specify the termination date.

 

16.                               TERMINATION AND AMENDMENT OF PLAN

 

Unless extended by the Board or the Committee, the Plan and all Participation
Agreements shall expire on the third anniversary of the Effective Date.  Except
as provided by the preceding sentence, the Plan and/or any Participation
Agreement executed by a Participant may not be terminated with respect to such
Participant without the written consent of the Participant and the approval of
the Board or the Committee.  The Plan and/or any Participation Agreement
executed by a Participant may be modified, amended or superseded with respect to
such Participant only by a supplemental written agreement between the
Participant and the Company approved by the Board or the Committee. 
Notwithstanding any other provision of the Plan to the contrary, the Committee
may, in its sole and absolute discretion and without the consent of any
Participant, amend the Plan or any Participation Agreement, to take effect
retroactively or otherwise, as it deems necessary or advisable for the purpose
of conforming the Plan or such Participation Agreement to any present or future
law relating to plans of this or similar nature (including, but not limited to,
Section 409A of the Code), and to the administrative regulations and rulings
promulgated thereunder.

 

17.                               MISCELLANEOUS PROVISIONS

 

17.1                        Administration.  The Plan shall be administered by
the Committee.  The Committee shall have the exclusive discretion and authority
to establish rules, forms and procedures for the administration of the Plan, to
construe and interpret the Plan, and to decide all questions of fact,
interpretation, definition, computation or administration arising in connection
with the Plan, including, but not limited to, eligibility to participate in the
Plan and the amount of benefits paid under the Plan.  The rules, interpretations
and other actions of the Committee shall be binding and conclusive on all
persons.  All expenses incurred in connection with the administration of the
Plan, including the claims procedures described in Section 12, shall be paid by
the Company.

 

18

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17.2                        Unfunded Obligation.  Any amounts payable to
Participants pursuant to the Plan are unfunded obligations.  The Company shall
not be required to segregate any monies from its general funds, or to create any
trusts, or establish any special accounts with respect to such obligations.  The
Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder.  Any investments or the creation or maintenance of any
trust or any Participant account shall not create or constitute a trust or
fiduciary relationship between the Board or the Company and a Participant, or
otherwise create any vested or beneficial interest in any Participant or the
Participant’s creditors in any assets of the Company.

 

17.3                        No Duty to Mitigate; Obligations of Company.  A
Participant shall not be required to mitigate the amount of any payment or
benefit contemplated by this Plan by seeking employment with a new employer or
otherwise, nor shall any such payment or benefit (except for benefits to the
extent described in Section 5.2(d)) be reduced by any compensation or benefits
that the Participant may receive from employment by another employer.  Except as
otherwise provided by this Plan, the obligations of the Company to make payments
to the Participant and to make the arrangements provided for herein are absolute
and unconditional and may not be reduced by any circumstances, including without
limitation any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Participant or any third party at any time.

 

17.4                        Clawback.  Without the consent of any Participant,
the obligations of the Company to make a payment pursuant to this Plan shall be
subject to (a) the terms and conditions of a policy on the recoupment of
incentive compensation as shall be adopted by the Company to implement the
requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the “Dodd-Frank Act”) or other mandate under law applicable to
such payment, or (b) a determination by the Committee that an action with regard
to such payment is appropriate after obtaining in connection with a Change in
Control a stockholder advisory vote required by Section 951 of the Dodd-Frank
Act, or any successor provision, on golden parachute compensation arrangements,
provided that such payment is a subject of that advisory vote.

 

17.5                        No Representations.  By executing a Participation
Agreement, the Participant acknowledges that in becoming a Participant in the
Plan, the Participant is not relying and has not relied on any promise,
representation or statement made by or on behalf of the Company which is not set
forth in this Plan.

 

17.6                        Waiver.  No waiver by the Participant or the Company
of any breach of, or of any lack of compliance with, any condition or provision
of this Plan 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.

 

17.7                        Choice of Law.  The validity, interpretation,
construction and performance of this Plan shall be governed by the substantive
laws of the State of California, without regard to its conflict of law
provisions.

 

19

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17.8                        Validity.  The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or enforceability of any
other provision of this Plan, which shall remain in full force and effect.

 

17.9                        Benefits Not Assignable.  Except as otherwise
provided herein or by law, no right or interest of any Participant under the
Plan shall be assignable or transferable, in whole or in part, either directly
or by operation of law or otherwise, including, without limitation, by
execution, levy, garnishment, attachment, pledge or in any other manner, and no
attempted transfer or assignment thereof shall be effective.  No right or
interest of any Participant under the Plan shall be liable for, or subject to,
any obligation or liability of such Participant.

 

17.10                 Tax Withholding.  All payments made pursuant to this Plan
will be subject to withholding of applicable income and employment taxes.

 

17.11                 Consultation with Legal and Financial Advisors.  By
executing a Participation Agreement, the Participant acknowledges that this Plan
confers significant legal rights, and may also involve the waiver of rights
under other agreements; that the Company has encouraged the Participant to
consult with the Participant’s personal legal and financial advisors; and that
the Participant has had adequate time to consult with the Participant’s advisors
before executing the Participation Agreement.

 

17.12                 Further Assurances.  From time to time, at the Company’s
request and without further consideration, the Participant shall execute and
deliver such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of the Plan, the Participant’s
Participation Agreement and the Release, and to provide adequate assurance of
the Participant’s due performance thereunder.

 

18.                               AGREEMENT

 

By executing a Participation Agreement, the Participant acknowledges that the
Participant has received a copy of this Plan and has read, understands and is
familiar with the terms and provisions of this Plan.  This Plan shall constitute
an agreement between the Company and the Participant executing a Participation
Agreement.

 

IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing sets forth the Plan as duly adopted by the Committee on September 30,
2014.

 

 

/s/ Robert Yau

 

Robert Yau, Secretary

 

 

20

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EXHIBIT A

 

FORM OF

 

AGREEMENT TO PARTICIPATE IN THE

 

GSI TECHNOLOGY, INC.

 

EXECUTIVE RETENTION AND SEVERANCE PLAN

 

--------------------------------------------------------------------------------

 

AGREEMENT TO PARTICIPATE IN THE

GSI TECHNOLOGY, INC.

EXECUTIVE RETENTION AND SEVERANCE PLAN

 

In consideration of the benefits provided by the GSI Technology, Inc. Executive
Retention and Severance Plan (the “Plan”), the undersigned employee of GSI
Technology, Inc. (the “Company”) and the Company agree that, as of the date
written below, the undersigned shall become a Participant in the Plan and shall
be fully bound by and subject to all of its provisions.  All references to a
“Participant” in the Plan shall be deemed to refer to the undersigned.

 

[Key Employee — Alternative Base Salary Severance Period and/or Prorated Annual
Bonus Benefit (if applicable)]

 

The undersigned employee acknowledges that the Plan confers significant legal
rights and may also constitute a waiver of rights under other agreements with
the Company; that the Company has encouraged the undersigned to consult with the
undersigned’s personal legal and financial advisors; and that the undersigned
has had adequate time to consult with the undersigned’s advisors before
executing this agreement.

 

The undersigned employee acknowledges that he or she has received a copy of the
Plan and has read, understands and is familiar with the terms and provisions of
the Plan.  The undersigned employee further acknowledges that (1) by accepting
the arbitration provision set forth in Section 13 of the Plan, the undersigned
is waiving any right to a jury trial in the event of any dispute covered by such
provision and (2) except as otherwise established in a written employment
agreement between the Company and the undersigned, the employment relationship
between the undersigned and the Company is an “at-will” relationship.

 

Executed on                                                   .

 

PARTICIPANT

 

GSI TECHNOLOGY, INC.

 

 

 

 

 

 

 

 

By:

 

Signature

 

 

 

 

 

 

 

 

 

Title:

 

Name Printed

 

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF

 

GENERAL RELEASE OF CLAIMS

[Age 40 and over]

 

--------------------------------------------------------------------------------

 

GENERAL RELEASE OF CLAIMS

[Age 40 and over]

 

This Agreement is by and between [Employee Name] (“Employee”) and [GSI
Technology, Inc. or successor that agrees to assume the Executive Retention and
Severance Plan following a Change in Control] (the “Company”).  This Agreement
will become effective on the eighth (8th) day after it is signed by Employee
(the “Effective Date”), provided that the Company has signed this Agreement and
Employee has not revoked this Agreement (by written notice to [Company Contact
Name] at the Company) prior to that date.

 

RECITALS

 

A.                                    Employee was employed by the Company as of
                      ,         .

 

B.                                    Employee and the Company entered into an
Agreement to Participate in the GSI Technology, Inc. Executive Retention and
Severance Plan (such agreement and plan being referred to herein as the “Plan”)
effective as of                     ,          wherein Employee is entitled to
receive certain benefits in the event of an Involuntary Termination (as defined
by the Plan), provided Employee signs and does not revoke a Release (as defined
by the Plan).

 

C.                                    A Change in Control (as defined by the
Plan) has occurred as a result of [briefly describe change in control]

 

D.                                    Employee’s employment has been terminated
as a result of an Involuntary Termination during the Change in Control Period
(as defined by the Plan).  Employee’s last day of work and termination are
effective as of                               ,         .  Employee desires to
receive the payments and benefits provided by the Plan by executing this
Release.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      Commencing on the Effective Date, the
Company shall provide Employee with the applicable payments and benefits set
forth in the Plan in accordance with the terms of the Plan.  Employee
acknowledges that the payments and benefits made pursuant to this paragraph are
made in full satisfaction of the Company’s obligations under the Plan.  Employee
further acknowledges that Employee has been paid all wages and accrued, unused
vacation that Employee earned during his or her employment with the Company.

 

2.                                      Employee and Employee’s successors
release the Company, its respective subsidiaries, stockholders, investors,
directors, officers, employees, agents, attorneys, insurers, legal successors
and assigns of and from any and all claims, actions and causes of action,
whether now known or unknown, which Employee now has, or at any other time had,
or shall or may have against those released parties based upon or arising out of
any matter, cause, fact, thing, act or omission whatsoever directly related to
Employee’s employment by the Company or the termination of such employment and
occurring or existing at any time up to and including the Effective Date,
including, but not limited to, any claims of breach of written contract,
wrongful termination, retaliation, fraud, defamation, infliction of emotional
distress, or national origin, race, age, sex, sexual orientation, disability or
other discrimination or harassment under the Civil Rights Act of 1964, the Age
Discrimination In Employment Act of 1967, the Americans with

 

--------------------------------------------------------------------------------

 

Disabilities Act, the Fair Employment and Housing Act or any other applicable
law.  Notwithstanding the foregoing, this release shall not apply to any right
of the Employee to receive the applicable payments and benefits set forth in the
Plan in accordance with the terms of the Plan and pursuant to Section 5.3 of the
Plan or pursuant to a Prior Indemnity Agreement (as such term is defined by the
Plan).

 

3.                                      Employee acknowledges that he or she has
read Section 1542 of the Civil Code of the State of California, which states in
full:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

 

Employee waives any rights that Employee has or may have under Section 1542 and
comparable or similar provisions of the laws of other states in the United
States to the full extent that he or she may lawfully waive such rights
pertaining to this general release of claims, and affirms that Employee is
releasing all known and unknown claims that he or she has or may have against
the parties listed above.

 

4.                                      Employee and the Company acknowledge and
agree that they shall continue to be bound by and comply with the terms and
obligations under the following agreements: (i) any proprietary rights or
confidentiality agreements between the Company and Employee, (ii) the Plan,
(iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to
which Employee is a party, and (iv) any stock option, stock grant or stock
purchase agreements between the Company and Employee.

 

5.                                      This Agreement shall be binding upon,
and shall inure to the benefit of, the parties and their respective successors,
assigns, heirs and personal representatives.

 

6.                                      The parties agree that any and all
disputes that both (i) arise out of the Plan, the interpretation, validity or
enforceability of the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement or the interpretation of the terms of this
Agreement shall be subject to the provisions of Section 12 and Section 13 of the
Plan.

 

7.                                      The parties agree that any and all
disputes that (i) do not arise out of the Plan, the interpretation, validity or
enforceability of the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement, the interpretation of the terms of this
Agreement or any of the matters herein released or herein described shall be
resolved by means of a court trial conducted by the superior or district court
in Santa Clara County, California.  The parties hereby irrevocably waive their
respective rights to have any such disputes tried to a jury, and the parties
hereby agree that such courts will have personal and subject matter jurisdiction
over all such disputes.  Notwithstanding the foregoing, in the event of any such
dispute, the parties may agree to mediate or arbitrate the dispute on such terms
and conditions as may be agreed in writing by the parties.  The prevailing party
shall be entitled to recover from the losing party its attorneys’ fees and costs
incurred in any action brought to resolve any such dispute.

 

2

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8.                                      This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether written or oral, with
the exception of any agreements described in paragraph 4 of this Agreement. 
This Agreement may not be modified or amended except by a document signed by an
authorized officer of the Company and Employee.  If any provision of this
Agreement is deemed invalid, illegal or unenforceable, such provision shall be
modified so as to make it valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected.

 

EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO
SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE
HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT.  EMPLOYEE
FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO [21] [45] DAYS TO CONSIDER THIS
AGREEMENT, THAT EMPLOYEE MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS AFTER
EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY
PERIOD HAS PASSED.  EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS
AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION
AND BENEFITS DESCRIBED IN PARAGRAPH 1.

 

Dated:

 

 

 

 

 

 

 

 

[Employee Name]

Dated:

 

 

 

[Company]

 

 

 

 

 

 

 

 

By:

 

 

3

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EXHIBIT C

 

FORM OF

 

GENERAL RELEASE OF CLAIMS

[Under age 40]

 

--------------------------------------------------------------------------------

 

GENERAL RELEASE OF CLAIMS

[Under age 40]

 

This Agreement is by and between [Employee Name] (“Employee”) and [GSI
Technology, Inc. or successor that agrees to assume the Executive Retention and
Severance Plan following a Change in Control] (the “Company”).  This Agreement
is effective on the day it is signed by Employee (the “Effective Date”).

 

RECITALS

 

A.                                    Employee was employed by the Company as of
                        ,         .

 

B.                                    Employee and the Company entered into an
Agreement to Participate in the GSI Technology, Inc. Executive Retention and
Severance Plan (such agreement and plan being referred to herein as the “Plan”)
effective as of                       ,          wherein Employee is entitled to
receive certain benefits in the event of an Involuntary Termination (as defined
by the Plan), provided Employee signs a Release (as defined by the Plan).

 

C.                                    A Change in Control (as defined by the
Plan) has occurred as a result of [briefly describe change in control].

 

D.                                    Employee’s employment has been terminated
as a result of an Involuntary Termination during the Change in Control Period
(as defined by the Plan).  Employee’s last day of work and termination are
effective as of                             ,          (the “Termination
Date”).  Employee desires to receive the payments and benefits provided by the
Plan by executing this Release.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      Commencing on the Effective Date, the
Company shall provide Employee with the applicable payments and benefits set
forth in the Plan in accordance with the terms of the Plan.  Employee
acknowledges that the payments and benefits made pursuant to this paragraph are
made in full satisfaction of the Company’s obligations under the Plan.  Employee
further acknowledges that Employee has been paid all wages and accrued, unused
vacation that Employee earned during his or her employment with the Company.

 

2.                                      Employee and Employee’s successors
release the Company, its respective subsidiaries, stockholders, investors,
directors, officers, employees, agents, attorneys, insurers, legal successors
and assigns of and from any and all claims, actions and causes of action,
whether now known or unknown, which Employee now has, or at any other time had,
or shall or may have against those released parties based upon or arising out of
any matter, cause, fact, thing, act or omission whatsoever directly related to
Employee’s employment by the Company or the termination of such employment and
occurring or existing at any time up to and including the Termination Date,
including, but not limited to, any claims of breach of written contract,
wrongful termination, retaliation, fraud, defamation, infliction of emotional
distress, or national origin, race, age, sex, sexual orientation, disability or
other discrimination or harassment under the Civil Rights Act of 1964, the Age
Discrimination In Employment Act of 1967, the Americans with Disabilities Act,
the Fair Employment and Housing Act or any other applicable

 

1

--------------------------------------------------------------------------------

 

law.  Notwithstanding the foregoing, this release shall not apply to any right
of the Employee to receive the applicable payments and benefits set forth in the
Plan in accordance with the terms of the Plan and pursuant to Section 5.3 of the
Plan or pursuant to a Prior Indemnity Agreement (as such term is defined by the
Plan).

 

3.                                      Employee acknowledges that he or she has
read Section 1542 of the Civil Code of the State of California, which states in
full:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

 

Employee waives any rights that Employee has or may have under Section 1542 and
comparable or similar provisions of the laws of other states in the United
States to the full extent that he or she may lawfully waive such rights
pertaining to this general release of claims, and affirms that Employee is
releasing all known and unknown claims that he or she has or may have against
the parties listed above.

 

4.                                      Employee and the Company acknowledge and
agree that they shall continue to be bound by and comply with the terms and his
obligations under the following agreements: (i) any proprietary rights or
confidentiality agreements between the Company and Employee, (ii) the Plan,
(iii) any Prior Indemnity Agreement (as such term is defined by the Plan) to
which Employee is a party, and (iv) any stock option, stock grant or stock
purchase agreements between the Company and Employee.

 

5.                                      This Agreement shall be binding upon,
and shall inure to the benefit of, the parties and their respective successors,
assigns, heirs and personal representatives.

 

6.                                      The parties agree that any and all
disputes that both (i) arise out of the Plan, the interpretation, validity or
enforceability of the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement or the interpretation of the terms of this
Agreement shall be subject to Section 12 and Section 13 of the Plan.

 

7.                                      The parties agree that any and all
disputes that (i) do not arise out of the Plan, the interpretation, validity or
enforceability of the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement, the interpretation of the terms of this
Agreement or any of the matters herein released or herein described shall be
resolved by means of a court trial conducted by the superior or district court
in Santa Clara County, California.  The parties hereby irrevocably waive their
respective rights to have any such disputes tried to a jury, and the parties
hereby agree that such courts will have personal and subject matter jurisdiction
over all such disputes.  Notwithstanding the foregoing, in the event of any such
dispute, the parties may agree to mediate or arbitrate the dispute on such terms
and conditions as may be agreed in writing by the parties.  The prevailing party
shall be entitled to recover from the losing party its attorneys’ fees and costs
incurred in any action brought to resolve any such dispute.

 

8.                                      This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether

 

2

--------------------------------------------------------------------------------

 

written or oral, with the exception of any agreements described in paragraph 4
of this Agreement.  This Agreement may not be modified or amended except by a
document signed by an authorized officer of the Company and Employee.  If any
provision of this Agreement is deemed invalid, illegal or unenforceable, such
provision shall be modified so as to make it valid, legal and enforceable, and
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected.

 

EMPLOYEE UNDERSTANDS THAT EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO
SIGNING THIS AGREEMENT AND THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE
HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT.  EMPLOYEE
ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND
VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN
PARAGRAPH 1.

 

Dated:

 

 

 

 

 

 

 

 

[Employee Name]

Dated:

 

 

 

[Company]

 

 

 

 

 

 

 

 

By:

 

 

3

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