Exhibit 10.1

 

GSI TECHNOLOGY, INC.

2020 VARIABLE COMPENSATION PLAN

(Effective as of April 1, 2019)

 

1.                                            Introduction.  The Company hereby
adopts the Plan, effective as of April 1, 2019.  The purpose of the Plan is to
encourage performance and achieve retention of a select group of executive
employees of GSI Technology, Inc.  This document constitutes the written
instrument under which the Plan is maintained.

 

2.                                            Definitions.

 

“Cause” means (i) conviction of a felony or a crime of moral turpitude;
(ii) misconduct that results in harm to the Company; (iii) material failure to
perform assigned duties; or (iv) willful disregard of lawful instructions from
the chief executive officer of the Company or the Board of Directors relating to
the business of the Company or any of its affiliates.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
issued with respect thereof.

 

“Committee” means the Compensation Committee of the Company’s Board of
Directors.

 

“Company” means GSI Technology, Inc., a Delaware corporation.

 

“Disability” means that a Participant (i)  is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii)  is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than 3 months under an accident and health plan covering employees
of the Participant’s employer.

 

“Eligible Employee” means each employee who is eligible for the Plan as
designated by the Committee as set forth in approved minutes.

 

“Operating Income” means the Company’s operating income for fiscal 2020,
excluding (1) share based compensation, (2) acquisition-related costs and/or the
impact of any completed acquisition, (3) patent/IP related litigation costs,
(4) purchased intellectual property and (5) any adjustments as deemed necessary
by the Committee for 2020.

 

“Normal Retirement Age” means age sixty (60).

 

“Participant” means each Eligible Employee who is designated from time to time
by the Committee in writing.

 

“Plan” means the GSI Technology, Inc. 2020 Variable Compensation Plan, as set
forth in this document and as hereafter amended.

 

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“Retirement” means the termination of employment after Normal Retirement Age.

 

3.                                            Variable Compensation Award.

 

(a)                                 Variable Compensation Award and Calculation
of Payable Amount. Each Participant will receive an award, entitling the
Participant to earn variable compensation, the payment of which will be based
upon (i) the achievement of performance criteria based on Associative Processing
Unit (APU) milestones, operating income, net revenues and RadHard/RadTolerant
net revenues determined in accordance with US GAAP, or a combination of the four
and (ii) continued employment by the Participant through the vesting dates set
forth in Section 4 hereof (the “Variable Compensation Award”).  The Committee
shall designate in writing the amount payable under the Variable Compensation
Award and, if applicable, the percentage of the amount payable under the
Variable Compensation Award that is allocable to each of the criteria. 
Notwithstanding the foregoing, the maximum amount payable under a Variable
Compensation Award granted to any Participant shall not exceed two times the
Participant’s target Variable Compensation Award for 2020, unless the Committee,
in its sole discretion, decides to permit a greater amount with respect to such
Participant based on the performance and condition of the Company’s business.
Also, at any time prior to April 1, 2020, the Committee or the CEO, in his, her,
or its sole discretion, may reduce the amount payable under any Participant’s
Variable Compensation Award.  The amount of the Variable Compensation Award that
may become payable to the extent it becomes vested in accordance with the
schedule set forth in Section 4 hereof shall be calculated as soon as reasonably
practicable following April 1, 2020 based on the extent to which the performance
criteria set forth in this Section 3(a) have been achieved (the “Award Payment
Amount”).

 

4.                                            Payment of Variable Compensation
Award.

 

(a)                                 Vesting, Timing and Form of Payment. Subject
to Sections 4(b), 4(c), 4(d) and 7, each Participant’s Award Payment Amount
shall vest and be paid as follows:

 

(i)                                     Sixty percent (60%) of the Participant’s
Award Payment Amount shall vest and be payable to the Participant on the last
business day in April 2020; and

 

(ii)                                  Twenty percent (20%) of the Participant’s
Award Payment Amount (i.e. fifty percent (50%) of the Award Payment Amount then
remaining) shall vest and be payable to the Participant on the last business day
in April 2021; and

 

(iii)                               Twenty percent (20%) of the Participant’s
Award Payment Amount (i.e. one-hundred percent (100%) of the Award Payment
Amount then remaining) shall vest and be payable to the Participant on the last
business day in April 2022.

 

(b)                                 Distribution in the Event of Retirement,
Termination as a result of Disability or without Cause. If a Participant
terminates employment because of Retirement or Disability, or the Company
terminates a Participant’s employment without Cause, the Participant shall be
entitled to payment of all of his or her Award Payment Amount according to the
schedule in Section 4(a), provided that if termination under these conditions
occurs prior to April 1, 2020, the amount of the Variable Compensation Award

 

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payable will be the Award Payment Amount calculated pursuant to Section 3(a),
multiplied by the number of days employee was employed in Fiscal 2020 by the
Company and then divided by 365 days, and all remaining amounts payable under
Variable Compensation Award for 2020 shall be forfeited.

 

(c)                                  Forfeiture. If the Company terminates a
Participant’s employment for Cause or if the Participant’s employment is
terminated for any reason other than as a result of Retirement or Disability, he
or she shall forfeit all or any portion of his or her entire Award Payment
Amount for 2020 (as set forth in Section 3(a)) which is not yet vested and
payable under the schedule set forth in Section 4(a) as of the date of
termination.

 

(d)                                 Timing of Distribution to a Beneficiary. If
a Participant dies while still employed by the Company or after termination due
to Retirement, Disability, or termination by the Company without Cause but
before receiving a distribution of all of his or her Award Payment Amount
according to the schedule in Section 4(a), then the vesting of the Participant’s
Award Payment Amount shall be fully accelerated such that one-hundred percent
(100%) of the Award Payment Amount, as calculated pursuant to
Section 4(b) hereof (with the amount prorated to the date of death in the event
death occurs prior to April 1, 2020), will be distributed to his or her
beneficiary as a lump sum distribution on the April 30 following the
Participant’s death.

 

(e)                                  Beneficiary Designation. Each Participant
must designate a beneficiary to receive a distribution of his or her Variable
Compensation Award if the Participant dies before such amount is fully
distributed to him or her. To be effective, a beneficiary designation must be
signed, dated and delivered to the Committee. In the absence of a valid or
effective beneficiary designation, the Participant’s surviving spouse will be
his or her beneficiary or, if there is no surviving spouse, the Participant’s
estate will be his or her beneficiary. If a married Participant designates
anyone other than his or her spouse as his or her beneficiary, such designation
will be void unless it is signed and dated by the Participant’s spouse.

 

5.                                            Withholding. The Company will
withhold from any Plan distribution all required federal, state, local and other
taxes and any other payroll deductions that may be required.

 

6.                                            Administration.  The Committee has
the full and exclusive discretion to interpret and administer the Plan. All
actions, interpretations and decisions of the Committee are conclusive and
binding on all persons, and will be given the maximum possible deference allowed
by law.  Subject to the provisions of the Plan, the Committee shall have full
authority to select, in its sole discretion the Participants to whom Variable
Compensation Awards will be granted.

 

7.                                            Amendment or Termination. Through
March 31, 2020, the Committee, in its sole and unlimited discretion, may amend
or terminate the Plan at any time, without prior notice to any Participant.
After April 1, 2020, the Committee may amend or terminate the Plan provided that
any such amendment does not reduce or increase any benefit to which a
Participant has accrued and is otherwise entitled to under the terms of the
Plan, nor accelerate the timing of any payment under the Plan. Notwithstanding
the foregoing to the contrary, the Company reserves the right to the extent it
deems necessary or advisable, in its sole discretion, to unilaterally alter

 

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or modify the Plan and any Variable Compensation Awards made thereunder to
ensure that the Plan and Variable Compensation Awards provided to Participants
who are U.S. taxpayers are made in such a manner that either qualify for
exemption from or comply with Code Section 409A; provided, however, that the
Company makes no representations that the Plan or any Variable Compensation
Awards made thereunder will be exempt from or comply with Code Section 409A and
makes no undertaking to preclude Code Section 409A from applying to the Plan or
any Variable Compensation Awards made thereunder. The Plan shall automatically
terminate on the date when no Participant (or beneficiary) has any right to or
expectation of payment of further benefits under the Plan.

 

8.                                            Source of Payments. All payments
under the Plan will be paid in cash from the general funds of the Company. No
separate fund will be established under the Plan, and the Plan will have no
assets. Any right of any person to receive any payment under the Plan is no
greater than the right of any other general unsecured creditor of the Company. 
The Plan shall be binding upon the Company’s successors and assigns.

 

9.                                            Inalienability. A Participant’s
rights to benefits under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant or the Participant’s beneficiary.

 

10.                                     Applicable Law. The provisions of the
Plan will be construed, administered and enforced in accordance with the laws of
the State of California without reference to its principles of
conflicts-of-laws.

 

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

 

12.                                     No Right of Continued Employment.  THE
PLAN DOES NOT GIVE ANY ELIGIBLE EMPLOYEE OR PARTICIPANT THE RIGHT TO BE RETAINED
AS AN EMPLOYEE. SUBJECT TO THE TERMS OF ANY WRITTEN EMPLOYMENT AGREEMENT TO THE
CONTRARY, THE COMPANY SHALL HAVE THE RIGHT TO TERMINATE OR CHANGE THE TERMS OF
EMPLOYMENT OF AN ELIGIBLE EMPLOYEE OR A PARTICIPANT AT ANY TIME AND FOR ANY
REASON WHATSOEVER, WITH OR WITHOUT CAUSE.

 

13.                                     Bindings on Successor.  The liabilities
and obligations of the Company under the Plan will be binding upon any successor
corporation or entity which succeeds to all or substantially all of the assets
and business of the Company by merger or other transaction.

 

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IN WITNESS WHEREOF, GSI Technology, Inc., by its duly authorized officer, has
executed the Plan on the date indicated below.

 

GSI TECHNOLOGY, INC.

 

/s/ Lee-Lean Shu

 

Name: Lee-Lean Shu

 

Title: Chief Executive Officer

 

 

 

Date:

 

 

 

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