Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), entered into on April 26, 2018
(the “Effective Date”), is made by and between Young Joon Kim (the “Executive”),
MagnaChip Semiconductor Corporation, a Delaware corporation (“Parent”) and
MagnaChip Semiconductor, Ltd. (together with any of its Affiliates as may employ
the Executive from time to time, any and all successors thereto, and Parent,
the ”Company”).

RECITALS

A.     The Company and the Executive desire to enter into this Agreement to
assure the Company of the continued exclusive services of the Executive and to
set forth the rights and duties of the parties hereto.

B.     Except as otherwise set forth herein, this Agreement is intended to
supersede any prior agreements or understandings, whether formal or informal,
between the Executive and the Company or any of its Affiliates (as defined
below), including, without limitation, the letter agreement, dated as of
November 3, 2015, by and between the Executive, the Company and Parent (the
“Prior Agreement”).

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:

1.    Certain Definitions.

(a)    “Affiliate” shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, where “control” shall have the meaning given such term under
Rule 405 of the Securities Act of 1933, as amended.

(b)    “Agreement” shall have the meaning set forth in the preamble hereto.

(c)    “Annual Base Salary” shall have the meaning set forth in Section 3(a).

(d)    “Annual Bonus” shall have the meaning set forth in Section 3(b).

(e)    “Board” shall mean the Board of Directors of the Company.

(f)    The Company shall have “Cause” to terminate the Executive’s employment
pursuant to Section 4(a)(iii) hereunder upon (i) the Executive’s conviction of,
or a plea of nolo contendere to, a felony or other crime involving moral
turpitude (or, in each case, equivalent crimes in a jurisdiction other than the
United States), but excluding minor traffic violations; (ii) the Executive’s
commission of fraud, embezzlement, or misappropriation of funds; (iii) a breach
by the Executive of his fiduciary duty to the Company or any of its Affiliates;
(iv) the Executive’s refusal to fulfill the Executive’s duties and
responsibilities (other than by reason of death or Disability) to the Company or
any of its Affiliates; (v) the Executive’s material violation of any

 

1

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

established lawful policy of the Company or any of its Affiliates; (vi) the
Executive’s material breach of any of the terms of any agreement the Executive
has with the Company or any of its Affiliates; (vii) the Executive’s habitual
use of illicit drugs or habitual abuse of alcohol that affects his job
performance; or (viii) any gross negligence, material misconduct, or material
wrongful act or omission on the Executive’s part in connection with the
Executive’s duties and responsibilities to the Company or any of its Affiliates.
The Company may terminate the Executive’s employment for Cause under this
Agreement following issuance to the Executive of written notice of the
circumstances the Company believes constitute Cause within ninety (90) days
after it becomes aware of such circumstances; provided, that if the basis for
termination is curable, then the Executive shall have fifteen (15) days after
receipt of such written notice to cure such basis, and if not cured, the Company
may terminate the Executive’s employment for Cause within ninety (90) days after
the expiration of such cure period. If, within ninety (90) days subsequent to
the Executive’s termination of employment for any reason other than by the
Company for Cause, the Company determines that the Executive’s employment could
have been terminated for Cause, the Executive’s employment will be deemed to
have been terminated for Cause for all purposes, and the Executive will be
required to disgorge to the Company all amounts received pursuant to this
Agreement or otherwise on account of such termination that would not have been
payable to the Executive had such termination been by the Company for Cause;
provided that the Company’s ability to retroactively determine that the
Executive’s employment could have been terminated for Cause under this sentence
will cease upon the occurrence of a Change in Control.

(g)    “Change in Control” has the meaning given to such term in the MagnaChip
Semiconductor Corporation 2011 Equity Incentive Plan.

(h)    “Code” shall mean the Internal Revenue Code of 1986, as amended.

(i)    “Date of Termination” shall mean (i) if the Executive’s employment is
terminated by his death, the date of his death or (ii) if the Executive’s
employment is terminated pursuant to Section 4(a)(ii)-(vi), the date specified
or otherwise effective pursuant to Section 4(b).

(j)    “Disability” shall mean a finding by the Company of the Executive’s
incapacitation through any illness, injury, accident or condition of either a
physical or psychological nature that has resulted in his inability to perform
the essential functions of his position, even with reasonable accommodations,
for one hundred eighty (180) calendar days during any period of three hundred
sixty-five (365) consecutive calendar days, and such incapacity is expected to
continue.

(k)    “Executive” shall have the meaning set forth in the preamble hereto.

(l)    “Expatriate Benefits” means the expatriate expenses that the Executive
incurs in accordance with the terms set forth on Exhibit A hereto. For the
avoidance of doubt, (i) Expatriate Benefits shall not include the Special
Allowances or any other payments or benefits the Executive receives from the
Company with respect to living expenses or tuition for the Executive’s family in
the United States and (ii) other than the Special Allowances, the Company has no
obligation to make or provide payments or benefits with respect to living
expenses or tuition for the Executive’s family in the United States, and the
Executive shall not have Good Reason as a result of the Company not making or
providing any such payments or benefits.

 

2

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

(m)    “Final Base Salary” means the Executive’s Annual Base Salary as in effect
immediately prior to the termination of the Executive’s employment (or, if
clause (i) or (ii) of “Good Reason” is implicated, immediately before any
relevant diminution of the Executive’s Annual Base Salary).

(n)    “Final Target Annual Bonus” means the Executive’s Target Annual Bonus as
in effect immediately prior to the termination of the Executive’s employment
(or, if clause (i) or (ii) of “Good Reason” is implicated, immediately before
any relevant diminution of the Executive’s Target Annual Bonus); provided that
in no event shall such amount exceed 100% of the Executive’s Final Base Salary
for purposes of any severance calculation hereunder. For the avoidance of doubt,
the foregoing sentence is not intended to limit the Executive’s target Annual
Bonus opportunity or payout amount for any other purpose.

(o)    The Executive shall have “Good Reason” to resign from his employment
pursuant to Section 4(a)(v) in the event that any of the following actions are
taken by the Company without his consent: (i) if upon or following a Change in
Control, a diminution in the Executive’s Annual Base Salary, Target Annual Bonus
opportunity, or, if the Executive’s primary residence is not then located in the
United States, the Expatriate Benefits; (ii) if prior to a Change in Control, a
diminution in (A) the Executive’s Annual Base Salary, other than an across the
board cumulative reduction of no more than fifteen (15%) that applies in a
similar manner to all similarly-situated members of the senior management of the
Company, (B) the Executive’s Target Annual Bonus opportunity (other than a
reduction that occurs as a result of a reduction described in clause (A)
hereof), or (C) if the Executive’s primary residence is not then located in the
United States, the Expatriate Benefits; (iii) the Company’s material breach of
any of the material terms of any material agreement between the Executive and
the Company or any of its Affiliates; (iv) a non-temporary relocation of the
Executive’s primary work location by the Company to a location that is more than
thirty five (35) miles from the Executive’s principal place of employment as of
the date hereof (which the parties acknowledge is Seoul, South Korea and/or
Cheongju, South Korea) and that increases the Executive’s one-way commute to
work by more than thirty five (35) miles; (v) a material diminution of the
Executive’s title, duties or responsibilities; provided, that no diminution of
the Executive’s title, duties or responsibilities shall be deemed to occur
solely as a result of the Company (or its successor or Parent) no longer being a
publicly traded entity. For the avoidance of doubt, the hiring or promotion of a
President or a Chief Operating Officer (“COO”) or other officer will not be
deemed to be a Good Reason event, as long as the Executive remains the most
senior officer of Parent and the Company and the COO or other officer reports to
the Executive; or (vi) the consummation of a sale of all of the Company’s SPG
business line. The Executive will not have Good Reason to terminate the
Executive’s employment and receive payments or benefits under Section 5(b) of
this Agreement unless the Executive provides the Board with written notice of
the circumstances the Executive believes constitute Good Reason within thirty
(30) days after the occurrence of such circumstances. If the Company does not
cure within fifteen (15) days after receipt of such written notice, then the
Executive may terminate the Executive’s employment for Good Reason within ninety
(90) days after the expiration of such cure period. If the Executive terminates
the Executive’s employment prior to the expiration of the fifteen (15) day cure
period or more than ninety (90) days after the expiration of the cure period,
the Executive will not be treated as having terminated the Executive’s
employment for Good Reason.

 

3

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

(p)     “Inventions” shall have the meaning set forth in Section 7(c)(i).

(q)    “Notice of Termination” shall have the meaning set forth in Section 4(b).

(r)    “Parent” shall have the meaning set forth in the preamble hereto.

(s)    “Person” shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority, or other entity of whatever
nature.

(t)    “Proprietary Rights” shall have the meaning set forth in Section 7(c)(i).

(u)    “Target Annual Bonus” means the Executive’s target Annual Bonus,
expressed as a percentage of the Annual Base Salary, under the terms of the
Company’s Profit Sharing Plan as are then in effect.

(v)    “Term” shall have the meaning set forth in Section 2(b).

2.    Employment.

(a)    In General. The Company shall employ the Executive, and the Executive
shall be employed by the Company, for the period set forth in Section 2(b), in
the position set forth in Section 2(c), and upon the other terms and conditions
herein provided.

(b)    Term of Employment. The term of this Agreement (the ”Term”) shall begin
on the Effective Date and remain in effect, until terminated as provided in
Section 4.

(c)    Position and Duties.

(i)    During the Term, the Executive shall serve as Chief Executive Officer of
the Parent and the Company, with responsibilities, duties, and authority
customary for such position. The Executive shall also serve as an officer of
other Affiliates of the Company as requested by the Board. Except as otherwise
provided herein, the Executive shall not be entitled to any additional
compensation for service as a member of the Board or other positions or titles
he may hold with any Affiliate of the Company to the extent he is so appointed.
The Executive shall report to the Board. The Executive agrees to observe and
comply with the Company’s rules and policies as adopted from time to time by the
Company. The Executive shall devote his full business time, skill, attention,
and best efforts to the performance of his duties hereunder; provided, however,
that the Executive shall be entitled to (A) serve on civic, charitable, and
religious boards, and (B) manage the Executive’s personal and family
investments, in each case, to the extent that such activities do not materially
interfere with the performance of the Executive’s duties and responsibilities
hereunder, are not in conflict with the business interests of the Company or its
Affiliates, and do not otherwise compete with the business of the Company or its
Affiliates. The Executive may also serve on the boards of directors or serve as
a consultant to for profit companies with the prior written consent of the
Board, which consent shall be in the sole discretion of the Board.

 

4

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

(ii)    The Executive’s employment shall be principally based at the Company’s
headquarters in the Seoul, South Korea area or Cheongju, South Korea. The
Executive shall perform his duties and responsibilities to the Company at such
principal place of employment and at such other location(s) to which the Company
may reasonably require the Executive to travel for Company business purposes.

3.    Compensation and Related Matters.

(a)    Annual Base Salary. During the Term, the Executive shall receive a base
salary at a rate of five hundred fifty seven thousand three hundred ninety six
dollars ($557,396) per annum, which shall be paid in accordance with the
customary payroll practices of the Company (the ”Annual Base Salary”).

(b)    Annual Bonus. With respect to each calendar year that ends during the
Term, the Executive shall be eligible to receive an annual cash bonus (the
“Annual Bonus”) under the terms of the Company’s Profit Sharing Plan as are then
in effect. It is currently intended that the Board will set the Executive’s
target Annual Bonus at 100% of the Executive’s Annual Base Salary.

(c)    Equity Compensation. On April 30, 2018, subject to the Executive’s
continued employment on such date, the Executive will receive equity grants in
respect of 2018 in the form of (i) annual operation planning-based performance
stock units (“AOP PSUs”), (ii) relative total shareholder return-based
performance stock units (“TSR PSUs”), and (iii) time-based restricted stock
units, in each case pursuant to an award agreement substantially in the form
attached hereto as Exhibit B-1, Exhibit B-2, and Exhibit B-3, respectively
(Exhibit B-1 and Exhibit B-2, the “Award Agreements”). Subject to the
Executive’s continued employment with the Company, the Executive will receive
additional AOP PSU and TSR PSU grants with respect to 2019 and 2020 (the “2019
Grants” and the “2020 Grants”, respectively) that are generally subject to same
terms as in the applicable Award Agreement, except as otherwise set forth in
Exhibit B-4.

(d)    Benefits. During the Term, the Executive shall be entitled to participate
in the employee benefit plans, programs, and arrangements of the Company now
(or, to the extent determined by the Board, hereafter) in effect, in accordance
with their terms, including, without limitation, medical and welfare benefits
and the Expatriate Benefits. For the avoidance of doubt, nothing in this
Agreement shall limit or otherwise affect the rights that the Executive may have
under any statutory pension under Korean law that is accrued to his account as
of the effective date of his separation from the Company.

(e)    Tax Equalization. The Company shall provide for tax equalization and tax
consulting/preparation services for the Executive for any compensation that he
receives pursuant to this Agreement (regardless of whether the Executive is
still employed by the Company at the time of any payment pursuant to this
Agreement). Executive shall take all actions necessary to minimize taxes,
subject to applicable law. For each taxable year, to the extent necessary, the
Company shall make a tax equalization payment to the Executive in an amount
equal to the amount necessary to put the Executive in the same after-tax
position that he would been in if the Executive had been subject to only United
States federal, state, and local income taxes. For the avoidance of doubt, the
Special Allowances will not be included as expatriate benefits for this purpose.
For the avoidance of doubt, tax equalization does not include indemnification or
other payments relating

 

5

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

to any additional tax, interest, or penalties that may be imposed on the
Executive as a result of Section 409A of the Code or any damages for failing to
comply with Section 409A of the Code, or any excise tax imposed by Section 4999
of the Code.

(f)    Visas and Work Permits. The Company shall provide the necessary services
and cover the cost to obtain the necessary visas and/or work permits to enable
the Executive and his family to legally work and stay or visit in Korea for the
duration that the Executive is assigned to perform services in Korea.

(g)    Transportation. The Company shall provide a vehicle with a driver for the
Executive’s use while in Korea.

(h)    Annual Vacation and Home Leave. During the Term, the Executive shall be
entitled to two (2) weeks of vacation per year in accordance with the Company’s
vacation policies, as well as ten business days of annual home leave in
accordance with the Company’s expatriate benefit policy for its executives. Any
vacation and any home leave shall be taken at the reasonable and mutual
convenience of the Company and the Executive.

(i)    Business Expenses. During the Term, the Company shall reimburse the
Executive for all reasonable travel and other business expenses incurred by him
in the performance of his duties to the Company, in accordance with the
Company’s expense reimbursement policies and procedures. Further, the Company
shall reimburse the Executive for the difference in cost between business class
and first class airfare for first class flights taken by him in the performance
of his duties to the Company, in accordance with the Company’s expense
reimbursement policies and procedures, up to $20,000 per year.

(j)    Special Allowances. The Company shall pay to the Executive a cash special
allowance of $27,000 for each subsequent year of employment beginning in 2019 no
later than January 15 of each such year (the “Special Allowances”).

4.    Termination. The Executive’s employment hereunder may be terminated
without any breach of this Agreement only under the following circumstances:

(a)    Circumstances.

(i)    Death. The Executive’s employment hereunder shall terminate upon his
death.

(ii)    Disability. If the Executive has incurred a Disability, the Company may
give the Executive written notice of its intention to terminate the Executive’s
employment. In that event, the Executive’s employment with the Company shall
terminate effective on the later of the thirtieth (30th) day after receipt of
such notice by the Executive and the date specified in such notice, provided
that within the thirty (30) day period following receipt of such notice, the
Executive shall not have returned to full-time performance of his duties
hereunder.

(iii)    Termination with Cause. The Company may terminate the Executive’s
employment with Cause.

 

6

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

(iv)    Termination without Cause. The Company may terminate the Executive’s
employment without Cause.

(v)    Resignation with Good Reason. The Executive may resign from his
employment with Good Reason.

(vi)    Resignation without Good Reason. The Executive may resign from his
employment without Good Reason upon not less than thirty (30) days’ advance
written notice to the Board.

(b)    Notice of Termination. Any termination of the Executive’s employment by
the Company or by the Executive under this Section 4 (other than termination
pursuant to Section 4(a)(i)) shall be communicated by a written notice to the
other party hereto (i) indicating the specific termination provision in this
Agreement relied upon, (ii) except with respect to a termination pursuant to
Section 4(a)(iv) or (vi), setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, and (iii) specifying a Date of
Termination as provided herein (a “Notice of Termination”). If the Company
delivers a Notice of Termination under Section 4(a)(ii), the Date of Termination
shall be at least thirty (30) days following the date of such notice; provided,
however, that such notice need not specify a Date of Termination, in which case
the Date of Termination shall be determined pursuant to Section 4(a)(ii). If the
Company delivers a Notice of Termination under Section 4(a)(iii) or 4(a)(iv),
the Date of Termination shall be, in the Company’s sole discretion, the date on
which the Executive receives such notice or any subsequent date selected by the
Company. If the Executive delivers a Notice of Termination under Section 4(a)(v)
or (a)(vi), the Date of Termination shall be at least thirty (30) days following
the date of such notice; provided, however, that the Company may, in its sole
discretion, accelerate the Date of Termination to any date that occurs following
the Company’s receipt of such notice, without changing the characterization of
such termination as voluntary, even if such date is prior to the date specified
in such notice. The failure by the Company or the Executive to set forth in the
Notice of Termination any fact or circumstance that contributes to a showing of
Cause or Good Reason shall not waive any right of the Company or the Executive
hereunder or preclude the Company or the Executive from asserting such fact or
circumstance in enforcing the Company’s or the Executive’s rights hereunder.

(c)    Termination and Resignation of All Positions. Upon termination of the
Executive’s employment for any reason, the Executive agrees to resign, as of the
Date of Termination or such other date requested by the Company, from all
positions and offices that the Executive then holds with the Company and its
Affiliates. In addition, as applicable, if the Executive fails to resign from
any such positions or offices, the Company shall be relieved of its obligations
under Section 5(b) hereof.

5.    Company Obligations upon Termination of Employment.

(a)    In General. Subject to Section 11(a), upon termination of the Executive’s
employment for any reason, the Executive (or the Executive’s estate) shall be
entitled to receive (i) any amount of the Executive’s Annual Base Salary earned
through the Date of Termination not theretofore paid, (ii) any Annual Bonus for
the year prior to the year in which the Date of

 

7

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

Termination occurred, that was earned but not yet paid, (iii) any expenses owed
to the Executive under Section 3(i), and (iv) any vested payment or benefit
arising from the Executive’s participation in, or benefits under, any qualified
employee benefit plans, programs, or arrangements under Section 3(d) (other than
severance plans, programs, or arrangements), which amounts shall be payable in
accordance with the terms and conditions of such employee benefit plans,
programs, or arrangements including, where applicable, any death and disability
benefits (the “Accrued Obligations”). Notwithstanding anything to the contrary,
upon a Termination with Cause, and only in the case of such a termination, the
Accrued Obligations shall not include the amount set forth in clause (ii) of the
preceding sentence or any other amounts or benefits not payable in accordance
with the terms and conditions of any employee benefit plan, program or
arrangement.

(b)    Termination without Cause or Resignation with Good Reason. Subject to
Section 11(a) and subject to the Executive’s continued compliance with the
covenants contained in Sections 6, 7 and 10, if the Company terminates the
Executive’s employment without Cause pursuant to Section 4(a)(iv) or the
Executive resigns from his employment with Good Reason pursuant to
Section 4(a)(v), the Company shall, in addition to the Accrued Obligations:

(i)    continue to pay the Final Base Salary in accordance with the Company’s
customary payroll practices during the period beginning on the Date of
Termination and ending on the earlier to occur of (A) the second anniversary of
the Date of Termination and (B) the first date that the Executive violates any
covenant contained in Section 6 or 7 (the “Salary Payment”), and if the Date of
Termination occurs after June 30 of the calendar year in which the Date of
Termination occurs, pay the Executive a prorated portion of the Annual Bonus
payable with respect to the calendar year in which such termination occurs,
determined on a daily basis, based on actual performance achievement for such
year, and payable if and when annual bonuses are paid to other senior executives
of the Company with respect to such year (the “Pro Rata Bonus”, together with
the Salary Payment, the “Severance Payment”). Notwithstanding the foregoing, if
the Company terminates the Executive’s employment without Cause pursuant to
Section 4(a)(iv), the Executive resigns from his employment with Good Reason
pursuant to Section 4(a)(v), the Executive dies as described in Section 4(a)(i),
or the Executive’s employment is terminated by reason of the Executive’s
Disability pursuant to Section 4(a)(ii), in each case, either (x) during a
period of time when the Company is party to a definitive corporate transaction
agreement, the consummation of which would result in a Change in Control or
(y) within eighteen (18) months following a Change in Control (such a
termination a “CIC Qualified Termination”), then the Salary Payment shall be
equal to two (2) times the sum of (x) the Final Base Salary and (y) the Final
Target Annual Bonus and be payable (1) in a single cash lump sum on the sixtieth
(60th) day following the Date of Termination in the event that the Change in
Control is also a “change in control event” (within the meaning of Section 409A
of the Code) or (2) in accordance with the schedule contemplated by the first
sentence of this Section 5(b)(i) in the event that the Change in Control is not
a “change in control event”, in each case, so long as the Release (as defined
below) has become effective and the Executive has not violated any covenant
contained in Section 6 or 7, in which case the Severance Payment shall be
forfeited;

(ii)    pay to the Executive on the sixtieth (60th) day following the Date of
Termination a lump sum amount equal to twelve (12) times the employer portion of
the monthly cost of maintaining medical, dental and/or vision benefits for the
Executive under a group health

 

8

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

plan of the Company for purposes of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”); provided, however, that if a
CIC Qualified Termination occurs, then such payment will be equal to eighteen
(18) times the employer portion of the monthly cost of maintaining medical,
dental and/or vision benefits for the Executive under a group health plan of the
Company for purposes of COBRA;

(iii)    notwithstanding the Company’s expatriate benefit policy for executives,
continue to provide the Expatriate Benefits (as if the Executive were still an
employed expatriate) as in effect immediately prior to the Date of Termination
(or, if clause (i) or (ii) of “Good Reason” is implicated, immediately before
any relevant diminution of the Executive’s Annual Base Salary, Target Annual
Bonus, or Expatriate Benefits), during the 90-day period following the Date of
Termination, or, if earlier, until the date on which the Executive’s primary
residence is relocated back to the United States;

(iv)    provide the repatriation allowance and repatriation expenses, to the
extent the Executive is eligible to receive such payments as part of the
Expatriate Benefits; and

(v)    provide for vesting of outstanding unvested equity awards (A) for any
awards granted prior to January 1, 2018, in full as of the Date of Termination,
and (B) for any awards granted on or following January 1, 2018, as set forth in
the applicable award agreement or on Exhibit B-4, as applicable;

provided, however, that all payments and benefits to be paid or provided
pursuant to this Section 5(b) shall commence on the sixtieth (60th) day
following the Date of Termination, and, only with respect to any cash payments,
the initial installment of such payments shall include a lump-sum payment of all
amounts accrued under this Section 5(b) from the Date of Termination through the
date of such initial payment.

Notwithstanding any provision in this Agreement to the contrary, if the
Executive breaches any of the covenants contained in Sections 6 and 7 hereof,
the Company shall have the right to cease providing any payments or benefits
under this Section 5(b) and, if requested, the Executive shall repay to the
Company within sixty (60) days of such request any previously paid payments or
benefits under this Section 5(b); provided that the foregoing shall not apply
unless the Company provides the Executive with written notice of the
circumstances it believes constitutes a breach of such covenants within ninety
(90) days after it becomes aware of such circumstances; provided further that,
if the basis for the alleged breach is curable, then the Executive shall have
fifteen (15) days after receipt of such written notice to cure such basis.

Payment of the amounts and benefits under this Section 5(b) is in lieu of any
other severance or separation pay payable to the Executive whether under any
employment agreement, offer letter or severance program, plan or policy,
applicable law (including law of the Republic of Korea) or other statute, or
otherwise; provided, nothing in this Agreement shall limit or otherwise affect
the rights of the Executive may have under any statutory pension under Korean
law that has accrued to the Executive’s account as of the Date of Termination.

(c)    Release. Notwithstanding anything herein to the contrary, the amounts
payable and benefits to be provided to the Executive under Section 5(b), other
than the Accrued Obligations,

 

9

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

shall be contingent upon and subject to the Executive’s (or the Executive’s
estate’s, if applicable) execution and non-revocation of a general waiver and
release of claims agreement in substantially in the form attached as Exhibit C
hereto (the “Release”) (and the expiration of any applicable revocation period),
on or prior to the sixtieth (60th) day following the Date of Termination.

(d)    Survival. The obligations of any of the parties under this Agreement
which by their nature may require either partial or total performance after the
termination of the Term or this Agreement (including those under Sections 3(e),
6, 7, 8, 9, and 10) will survive any termination of this Agreement.

6.    Non-Competition; Non-Solicitation; Non-Hire.

(a)    To the fullest extent permitted by applicable law, the Executive agrees
that during the Executive’s employment with the Company, and for the twenty four
(24) month period following the Executive’s termination of employment for any
reason, the Executive will not, directly or indirectly, have any equity or
equity-based interest, or work or otherwise provide services as an employee,
contractor, officer, owner, consultant, partner, director or otherwise, in any
business anywhere in the world that competes with any of the businesses of the
Company. Notwithstanding the foregoing, the Executive shall be permitted to
acquire a passive stock or equity interest in such a business, provided that the
stock or other equity interest acquired is not more than five percent (5%) of
the outstanding interest in such business;

(b)    To the fullest extent permitted by applicable law, the Executive agrees
that during the Executive’s employment with the Company, and for the twenty four
(24) month period following the Executive’s termination of employment for any
reason, the Executive will not, directly or indirectly, on the Executive’s own
behalf or on behalf of another (i) solicit, induce or attempt to solicit or
induce any officer, director, employee or consultant of the Company to terminate
their relationship with or leave the employ of the Company, or in any way
interfere with the relationship between the Company, on the one hand, and any
officer, director, employee, or consultant thereof, on the other hand, (ii) hire
(or other similar arrangement) any Person (in any capacity whether as an
officer, director, employee or consultant) who is, or at any time in the twelve
(12) months preceding the Date of Termination was, an officer, director,
employee or consultant of the Company or (iii) induce or attempt to induce any
customer, supplier, prospect, licensee or other business relation of the Company
to cease doing business with the Company, or in any way interfere with the
relationship between any such customer, supplier, prospect, licensee or business
relation, on the one hand, and the Company, on the other hand.

(c)    In the event that the terms of this Section 6 shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or over too great a geographical area or by
reason of its being too extensive in any other respect, it will be interpreted
to extend only over the maximum period of time for which it may be enforceable,
over the maximum geographical area as to which it may be enforceable, or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. The Executive hereby acknowledges that
the terms of this Section 6 are reasonable in terms of duration, scope and area
restrictions and are necessary to protect the goodwill of the Company. The
Executive hereby authorizes the Company to inform any future employer or
prospective employer of the existence and terms of Sections 6 and 7 of this
Agreement without liability for interference with the Executive’s employment or
prospective employment.

 

10

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

(d)    As used in this Section 6, the term “Company” shall include Parent, the
Company, and any direct or indirect subsidiaries thereof or any successors
thereto.

7.    Nondisclosure of Confidential Information; Nondisparagement; Intellectual
Property.

(a)    Non-Disclosure of Confidential Information; Return of Property. The
Executive recognizes and acknowledges that he has access to confidential
information and/or has had or will have material contact with the Company’s
customers, suppliers, licensees, representatives, agents, partners, licensors,
or business relations. The Executive agrees that during his employment and in
perpetuity thereafter, the Executive shall maintain in confidence and shall not
directly, indirectly or otherwise, use, disseminate, disclose or publish, or use
for the Executive’s benefit or the benefit of any Person, any confidential or
proprietary information or trade secrets of or relating to the Company,
including, without limitation, information with respect to the Company’s
operations, processes, products, inventions, business practices, finances,
principals, vendors, suppliers, customers, potential customers, marketing
methods, costs, prices, contractual relationships, regulatory status,
compensation paid to employees or other terms of employment, or deliver to any
Person any document, record, notebook, computer program or similar repository of
or containing any such confidential or proprietary information or trade secrets.
Upon the Executive’s termination of employment for any reason, the Executive
shall promptly deliver to the Company all correspondence, drawings, manuals,
letters, notes, notebooks, reports, programs, plans, proposals, financial
documents, or any other documents concerning the Company’s customers, business
plans, marketing strategies, products or processes. The Executive may respond to
a lawful and valid subpoena or other legal process but shall give the Company
the earliest possible notice thereof, shall, as much in advance of the return
date as possible, make available to the Company and its counsel the documents
and other information sought and, if requested by the Company, shall reasonably
assist such counsel in resisting or otherwise responding to such process.

(b)    Non-Disparagement. The Executive shall not, at any time during his
employment and in perpetuity thereafter, directly or indirectly, knowingly
disparage, criticize, or otherwise make derogatory statements regarding the
Company, or any of its successors, directors or officers. The foregoing shall
not be violated by the Executive’s truthful responses to legal process or
inquiry by a governmental authority.

(c)    Intellectual Property Rights.

(i)    The Executive agrees that the results and proceeds of the Executive’s
services for the Company (including any trade secrets, products, services,
processes, know-how, designs, developments, innovations, analyses, drawings,
reports, techniques, formulas, methods, developmental or experimental work,
improvements, discoveries, inventions, ideas, source and object codes, programs,
matters of a literary, musical, dramatic or otherwise creative nature, writings
and other works of authorship) resulting from services performed for the Company
and any works in progress, whether or not patentable or registrable under
copyright or similar statutes, that were made, developed, conceived or reduced
to practice or learned by the Executive, either

 

11

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

alone or jointly with others (collectively, “Inventions”), shall be
works-made-for-hire and the Company (or, if applicable or as directed by the
Company) shall be deemed the sole owner throughout the universe of any and all
trade secret, patent, copyright and other intellectual property rights
(collectively, “Proprietary Rights”) of whatsoever nature therein, whether or
not now or hereafter known, existing, contemplated, recognized or developed,
with the right to use the same in perpetuity in any manner the Company
determines in its sole discretion, without any further payment to the Executive
whatsoever. If, for any reason, any of such results and proceeds shall not
legally be a work-made-for-hire and/or there are any Proprietary Rights which do
not accrue to the Company under the immediately preceding sentence, then the
Executive hereby irrevocably assigns and agrees to assign any and all of the
Executive’s right, title and interest thereto, including, without limitation,
any and all Proprietary Rights of whatsoever nature therein, whether or not now
or hereafter known, existing, contemplated, recognized or developed, to the
Company (or, if applicable or as directed by the Company, any of its
Affiliates), and the Company or such Affiliates shall have the right to use the
same in perpetuity throughout the universe in any manner determined by the
Company or such Affiliates without any further payment to the Executive
whatsoever. As to any Invention that the Executive is required to assign, the
Executive shall promptly and fully disclose to the Company all information known
to the Executive concerning such Invention. The Executive hereby waives and
quitclaims to the Company any and all claims, of any nature whatsoever, that the
Executive now or may hereafter have for infringement of any Proprietary Rights
assigned hereunder to the Company.

(ii)    The Executive agrees that, from time to time, as may be requested by the
Company and at the Company’s sole cost and expense, the Executive shall do any
and all things that the Company may reasonably deem useful or desirable to
establish or document the Company’s exclusive ownership throughout the United
States of America or any other country of any and all Proprietary Rights in any
such Inventions, including, without limitation, the execution of appropriate
copyright and/or patent applications or assignments. To the extent the Executive
has any Proprietary Rights in the Inventions that cannot be assigned in the
manner described above, the Executive unconditionally and irrevocably waives the
enforcement of such Proprietary Rights. This Section 7(c)(ii) is subject to and
shall not be deemed to limit, restrict or constitute any waiver by the Company
of any Proprietary Rights of ownership to which the Company may be entitled by
operation of law by virtue of the Executive’s employment with, or service to,
the Company. The Executive further agrees that, from time to time, as may be
requested by the Company and at the Company’s sole cost and expense, the
Executive shall assist the Company in every proper and lawful way to obtain and
from time to time enforce Proprietary Rights relating to Inventions in any and
all countries. To this end, the Executive shall execute, verify and deliver such
documents and perform such other acts (including appearances as a witness) as
the Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and
the assignment thereof. In addition, the Executive shall execute, verify, and
deliver assignments of such Proprietary Rights to the Company or its designees.
The Executive’s obligation to assist the Company with respect to Proprietary
Rights relating to such Inventions in any and all countries shall continue
beyond the termination of the Executive’s employment with the Company.

(d)    As used in this Section 7, the term “Company” shall include Parent, the
Company, and any direct or indirect subsidiaries thereof or any successors
thereto.

 

12

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

(e)    Protected Disclosures.

(i)    Nothing in this Agreement will preclude, prohibit or restrict the
Executive from (A) communicating with, any federal, state or local
administrative or regulatory agency or authority, including the Securities and
Exchange Commission (the “SEC”); (B) participating or cooperating in any
investigation conducted by any governmental agency or authority; or (C) filing a
charge of discrimination with the United States Equal Employment Opportunity
Commission or any other federal state or local administrative agency or
regulatory authority.

(ii)    Nothing in this Agreement, or any other agreement between the parties,
prohibits or is intended in any manner to prohibit, the Executive from
(A) reporting a possible violation of federal or other applicable law or
regulation to any governmental agency or entity, including the Department of
Justice, the SEC, the U.S. Congress, and any governmental agency Inspector
General, or (B) making other disclosures that are protected under whistleblower
provisions of federal law or regulation. This Agreement does not limit the
Executive’s right to receive an award (including, without limitation, a monetary
reward) for information provided to the SEC. The Executive does not need the
prior authorization of anyone at the Company to make any such reports or
disclosures, and the Executive is not required to notify the Company that the
Executive has made such reports or disclosures.

(iii)    Nothing in this Agreement or any other agreement or policy of the
Company is intended to interfere with or restrain the immunity provided under 18
U.S.C. §1833(b). The Executive cannot be held criminally or civilly liable under
any federal or state trade secret law for the disclosure of a trade secret that
is made (A) (1) in confidence to federal, state or local government officials,
directly or indirectly, or to an attorney, and (2) for the purpose of reporting
or investigating a suspected violation of law; (B) in a complaint or other
document filed in a lawsuit or other proceeding, if filed under seal; or (C) in
connection with a lawsuit alleging retaliation for reporting a suspected
violation of law, if filed under seal and does not disclose the trade secret,
except pursuant to a court order.

(iv)    The foregoing provisions regarding protected disclosures are intended to
comply with all applicable laws. If any laws are adopted, amended or repealed
after the execution of this Agreement, this Section 7(e) shall be deemed to be
amended to reflect the same.

8.    Injunctive Relief. The Executive recognizes and acknowledges that a breach
of any of the covenants contained in Sections 6 and 7 will cause irreparable
damage to the Company and its goodwill, the exact amount of which will be
difficult or impossible to ascertain, and that the remedies at law for any such
breach will be inadequate. Accordingly, the Executive agrees that in the event
of a breach or threatened breach of any of the covenants contained in Sections 6
and 7, in addition to any other remedy that may be available at law or in
equity, the Company will be entitled to specific performance and injunctive
relief (without posting a bond). In the event of any breach or violation by the
Executive of any of the covenants contained in Section 6 and 7, the time period
of such covenant with respect to the Executive shall, to the fullest extent
permitted by law, be tolled until such breach or violation is resolved.

9.    Indemnification. During the Executive’s employment and service as a
director or officer (or both) and at all times thereafter during which the
Executive may be subject to liability, the

 

13

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

Executive shall be entitled to the protection set forth in the Indemnification
Agreement between the Executive and the Company, dated February 4, 2014, in
addition to the protection of any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers against all
costs, charges, and expenses incurred or sustained by him in connection with any
action, suit, or proceeding to which he may be made a party by reason of his
being or having been a director, officer, or employee of the Company or any of
its subsidiaries, as well as any rights the Executive may have under the
Company’s articles of incorporation and bylaws (in each case, other than any
dispute, claim, or controversy arising under or relating to this Agreement or
otherwise arising under or relating to the Executive’s employment, equity
ownership or compensation). Notwithstanding anything to the contrary herein, the
Executive’s rights under this Section 9 shall survive the termination of his
employment for any reason and the expiration of this Agreement for any reason.

10.    Cooperation. The Executive agrees that, subject to the Executive’s
reasonable availability, during and after the Executive’s employment by the
Company, and without the necessity of the Company obtaining a subpoena or court
order, the Executive shall provide reasonable cooperation in connection with any
suit, action or proceeding (or any appeal from any suit, action or proceeding),
and any investigation and/or defense of any claims asserted against the Company
Releasees (as defined in the Release), which relates to events occurring during
the Executive’s employment (including furnishing relevant information and
materials to the Company or its designee and/or providing testimony at
depositions and at trial); provided that the Company shall reimburse the
Executive for reasonable out-of-pocket expenses the Executive incurs that are
associated with any such cooperation; provided further that any such cooperation
occurring after the termination of the Executive’s employment shall be scheduled
to the extent reasonably practicable so as not to unreasonably interfere with
the Executive’s business or personal affairs. Notwithstanding anything herein to
the contrary, the preceding cooperation covenant shall not apply to any suit,
action, proceeding, investigation, defense or claim that arises out of or
relates to a dispute between the Executive and any of the Company Releasees.

11.    Section 409A of the Code.

(a)    General. The parties hereto acknowledge and agree that, to the extent
applicable, this Agreement shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Section 409A of the Code and
the Department of Treasury Regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued after the Effective Date. Notwithstanding any provision of
this Agreement to the contrary, in the event that the Company determines that
any amounts payable hereunder will be taxable currently to the Executive under
Section 409A(a)(1)(A) of the Code and related Department of Treasury guidance,
the Company and the Executive shall cooperate in good faith to (i) adopt such
amendments to this Agreement and appropriate policies and procedures, including
amendments and policies with retroactive effect, that they mutually determine to
be necessary or appropriate to preserve the intended tax treatment of the
benefits provided by this Agreement, to preserve the economic benefits of this
Agreement, and to avoid less-favorable accounting or tax consequences for the
Company, and/or (ii) take such other actions as mutually determined to be
necessary or appropriate to exempt the amounts payable hereunder from
Section 409A of the Code or to comply with the requirements of Section 409A of
the Code and thereby avoid the application of penalty taxes thereunder;
provided, however, that this

 

14

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

Section 11(a) does not create an obligation on the part of the Company to modify
this Agreement and does not guarantee that the amounts payable hereunder will
not be subject to interest or penalties under Section 409A, and in no event
whatsoever shall the Company or any of its Affiliates be liable for any
additional tax, interest, or penalties that may be imposed on the Executive as a
result of Section 409A of the Code or any damages for failing to comply with
Section 409A of the Code.

(b)    Separation from Service under Section 409A. Notwithstanding any provision
to the contrary in this Agreement: (i) no amount shall be payable pursuant to
Section 5(a) or (b) unless the termination of the Executive’s employment
constitutes a “separation from service” within the meaning of
Section 1.409A-1(h) of the Department of Treasury Regulations; (ii) if the
Executive is deemed at the time of his separation from service to be a
“specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to
the extent that delayed commencement of any portion of the termination benefits
to which the Executive is entitled under this Agreement (after taking into
account all exclusions applicable to such termination benefits under
Section 409A), including, without limitation, any portion of the additional
compensation awarded pursuant to Section 5(a) or (b), is required in order to
avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such
portion of the Executive’s termination benefits shall not be provided to the
Executive prior to the earlier of (A) the expiration of the six-month period
measured from the date of the Executive’s “separation from service” with the
Company (as such term is defined in the Department of Treasury Regulations
issued under Section 409A) and (B) the date of the Executive’s death; provided,
that upon the earlier of such dates, all payments deferred pursuant to this
Section 11(b)(ii) shall be paid to the Executive in a lump sum, and any
remaining payments due under this Agreement shall be paid as otherwise provided
herein; (iii) the determination of whether the Executive is a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of
his separation from service shall be made by the Company in accordance with the
terms of Section 409A of the Code and applicable guidance thereunder (including,
without limitation, Section 1.409A-1(i) of the Department of Treasury
Regulations and any successor provision thereto); (iv) for purposes of
Section 409A of the Code, the Executive’s right to receive installment payments
pursuant to Section 5 shall be treated as a right to receive a series of
separate and distinct payments; (v) if the sixty day period following the Date
of Termination ends in the calendar year following the year that includes the
Date of Termination, then payment of any amount that is conditioned upon the
execution of the Release and is subject to Section 409A shall not be paid until
the first day of the calendar year following the year that includes the Date of
Termination, regardless of when the Release is signed; and (vi) to the extent
that any reimbursement of expenses or in-kind benefits constitutes “deferred
compensation” under Section 409A, such reimbursement or benefit shall be
provided no later than December 31 of the year following the year in which the
expense was incurred. The amount of expenses reimbursed in one year shall not
affect the amount eligible for reimbursement in any subsequent year. The amount
of any in-kind benefits provided in one year shall not affect the amount of
in-kind benefits provided in any other year.

12.    Section 280G of the Code.

(a)    If there is a change of ownership or effective control or change in the
ownership of a substantial portion of the assets of a corporation (within the
meaning of Section 280G of the Code) and any payment or benefit (including
payments and benefits pursuant to this Agreement)

 

15

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

that the Executive would receive from the Company or otherwise (“Transaction
Payment”) would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986 (the “Code”), and (ii) but for
this sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then the Company shall cause to be determined, before any
amounts of the Transaction Payment are paid to the Executive, which of the
following two alternative forms of payment would result in the Executive’s
receipt, on an after-tax basis, of the greater amount of the Transaction Payment
notwithstanding that all or some portion of the Transaction Payment may be
subject to the Excise Tax: (1) payment in full of the entire amount of the
Transaction Payment (a “Full Payment”), or (2) payment of only a part of the
Transaction Payment so that the Executive receives the largest payment possible
without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of
determining whether to make a Full Payment or a Reduced Payment, the Company
shall cause to be taken into account all applicable federal, state and local
income and employment 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). If a
Reduced Payment is made, the reduction in payments and/or benefits will occur in
the following order: (1) first, reduction of cash payments, in reverse order of
scheduled payment date (or if necessary, to zero), (2) then, reduction of
non-cash and non-equity benefits provided to the Executive, on a pro rata basis
(or if necessary, to zero), and (3) then, cancellation of the acceleration of
vesting of equity award compensation in the reverse order of the date of grant
of the Executive’s equity awards.

(b)    Unless the Executive and the Company otherwise agree in writing, any
determination required under this section shall be made in writing by the
Company’s independent public accountants (the “Accountants”), whose
determination shall be conclusive and binding upon the Executive and the Company
for all purposes. For purposes of making the calculations required by this
section, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code. The Accountants shall provide detailed supporting calculations to the
Company and the Executive as requested by the Company or the Executive. The
Executive and the Company shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 12(b).

13.    Assignment and Successors. The Company may assign its rights and
obligations under this Agreement to any entity, including any successor to all
or substantially all the assets of the Company, by merger or otherwise, and may
assign or encumber this Agreement and its rights hereunder as security for
indebtedness of the Company and its Affiliates. The Executive may not assign his
rights or obligations under this Agreement to any individual or entity. This
Agreement shall be binding upon and inure to the benefit of the Company and the
Executive and their respective successors, assigns, personnel, legal
representatives, executors, administrators, heirs, distributees, devisees, and
legatees, as applicable. In the event of the Executive’s death following a
termination of his employment, all unpaid amounts otherwise due to the Executive
(including under Section 5) shall be paid to his estate.

14.    Governing Law. This Agreement shall be governed, construed, interpreted,
and enforced in accordance with the substantive laws of the State of Delaware,
without reference to the principles of conflicts of law of Delaware or any other
jurisdiction, and where applicable, the laws of the United States.

 

16

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

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

16.    Notices. Any notice, request, claim, demand, document, and other
communication hereunder to any party hereto shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex, telecopy, email or sent by nationally recognized overnight courier, or
certified or registered mail, postage prepaid, to the following address (or at
any other address as any party hereto shall have specified by notice in writing
to the other party hereto):

(a)    If to the Company, to it at its current executive offices, Attn: Chairman
of the Board.

and a copy (which shall not constitute notice) to:

Milbank, Tweed, Hadley &McCloy LLP

28 Liberty Street

New York, New York 10005

Fax: (212) 822-5501

Attention: Manan Shah

Email: mdshah@milbank.com

(b)    If to the Executive, at his most recent address on the payroll records of
the Company.

17.    Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.

18.    Entire Agreement. The terms of this Agreement (together with the
Indemnification Agreement between Parent and the Executive, any pre-invention
assignment agreements with the Company and any other agreements and instruments
contemplated hereby or referred to herein) are intended by the parties hereto to
be the final expression of their agreement with respect to the employment of the
Executive by the Company and its Affiliates and to supersede any and all prior
employment agreements, offer letters, severance agreements and similar
agreements, plans, provisions, understandings or arrangements, whether written
or oral (including, without limitation, the offer letter, dated April 15, 2013
(as amended July 7, 2015), by and between the Executive and the Company, and the
Prior Agreement), and all such prior agreements, plans, provisions,
understandings or arrangements shall be null and void in their entirety and of
no further force or effect as of the Effective Date. The parties hereto further
intend that this Agreement shall constitute the complete and exclusive statement
of its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.

 

17

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

19.    Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing signed by the Executive and a duly
authorized officer of the Company that expressly identifies the amended
provision of this Agreement. By an instrument in writing similarly executed and
similarly identifying the waived compliance, the Executive or a duly authorized
officer of the Company may waive compliance by the other party or parties with
any provision of this Agreement that such other party was or is obligated to
comply with or perform; provided, however, that such waiver shall not operate as
a waiver of, or estoppel with respect to, any other or subsequent failure to
comply or perform. No failure to exercise and no delay in exercising any right,
remedy, or power hereunder shall preclude any other or further exercise of any
other right, remedy, or power provided herein or by law or in equity.

20.    No Inconsistent Actions. The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it is the
intent of the parties hereto to act in a fair and reasonable manner with respect
to the interpretation and application of the provisions of this Agreement.

21.    Construction. This Agreement shall be deemed drafted equally by both of
the parties hereto. Its language shall be construed as a whole and according to
its fair meaning. Any presumption or principle that the language is to be
construed against any party shall not apply. The headings in this Agreement are
only for convenience and are not intended to affect construction or
interpretation. Any references to paragraphs, subparagraphs, sections, or
subsections are to those parts of this Agreement, unless the context clearly
indicates to the contrary. Also, unless the context clearly indicates to the
contrary: (a) the plural includes the singular, and the singular includes the
plural; (b) “and” and “or” are each used both conjunctively and disjunctively;
(c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”;
(d) “includes” and “including” are each “without limitation”; and (e) “herein,”
“hereof,” “hereunder,” and other similar compounds of the word “here” refer to
the entire Agreement and not to any particular paragraph, subparagraph, section,
or subsection.

22.    Dispute Resolution. The parties agree that any suit, action or proceeding
brought by or against such party in connection with this Agreement shall be
brought exclusively in the United States District Court for the District of
Delaware to the extent that federal jurisdiction exists, and in the Delaware
Chancery Court to the extent that federal jurisdiction does not exist. Each
party expressly and irrevocably consents and submits to the jurisdiction and
venue of each such court in connection with any such legal proceeding, including
to enforce any settlement, order or award, and such party agrees to accept
service of process by the other party or any of its agents in connection with
any such proceeding. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH
PARTY IN RESPECT OF ITS RIGHTS OR OBLIGATIONS HEREUNDER.

23.    Enforcement. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
of this Agreement, such provision shall be fully severable, this Agreement shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision were never a part of this Agreement, and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid, or unenforceable provision or by its severance from
this Agreement. Furthermore,

 

18

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

in lieu of such illegal, invalid, or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as similar in terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.

24.    Withholding. The Company shall be entitled to withhold from any amounts
payable under this Agreement any federal, state, local, and foreign withholding
and other taxes and charges that the Company is required to withhold. The
Company shall be entitled to rely on an opinion of counsel if any questions as
to the amount or requirement of withholding shall arise.

25.    Clawback. To the extent required by applicable law (including, without
limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and
regulations of any securities exchange or inter-dealer quotation service on
which equity of the Company or Parent is listed or quoted, or if so required
pursuant to a written policy adopted by the Company or Parent, payments under
this Agreement or in respect of Company or Parent equity incentive awards shall
be subject (including on a retroactive basis) to clawback, forfeiture or similar
requirements (and such requirements shall be deemed incorporated by reference
into this Agreement and all agreements governing the terms of Company or Parent
incentive equity compensation).

26.    Other Benefit Plans. No payment under this Agreement shall be taken into
account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company except as
expressly required otherwise by law or the terms of such plan.

27.    Employee Representations. The Executive represents, warrants and
covenants that (i) that he has read and understands this Agreement, is fully
aware of its legal effect, has not acted in reliance upon any representations or
promises made by the Company other than those contained in writing herein, and
has entered into this Agreement freely based on his own judgment, (ii) Executive
has the full right, authority and capacity to enter into this Agreement and
perform Executive’s obligations hereunder, (iii) Executive is not bound by any
agreement that conflicts with or prevents or restricts the full performance of
Executive’s duties and obligations to the Company hereunder during or after the
Term, (iv) the execution and delivery of this Agreement shall not result in any
breach or violation of, or a default under, any existing obligation, commitment
or agreement to which Executive is subject, and (v) the Executive shall keep all
terms of this Agreement confidential, except with respect to disclosure to the
Executive’s spouse, accountants or attorneys, each of whom shall agree to keep
all terms of this Agreement confidential.

28.    Equity Ownership. The Executive will be subject to such stock ownership
guidelines and holding requirements as may be implemented by the Board from time
to time.

[signature page follows]

 

19

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

The parties have executed this Agreement as of the date first written above.

 

MAGNACHIP SEMICONDUCTOR, LTD. By:   /s/ Theodore Kim   Name: Theodore Kim  
Title:   EVP MAGNACHIP SEMICONDUCTOR CORPORATION By:   /s/ Theodore Kim   Name:
Theodore Kim   Title:   CCO, GC, EVP EXECUTIVE

/s/ Young Joon Kim

Young Joon Kim

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

EXHIBIT A

EXPATRIATE BENEFITS

 

Benefit

  

Description

Housing Support    The Executive will receive housing support/reimbursement from
the Company while the Executive remains in the same housing as he maintains as
of the Effective Date. Housing Expenses    Reasonable housing accommodations and
expenses, including utilities Tax EQ    Federal and, if applicable, state. For
the avoidance of doubt, the Special Allowances will not be included as
expatriate benefits for this purpose. Insurance   

Life insurance coverage ($5 million) for executive

Health insurance coverage for executive and family

Transportation    Vehicle (commensurate with title) and driver Repatriation
Expense   

Actual cost of relocation (including disassembly, packing, shipping, unpacking
and assembly of household goods, and shipping of 1 automobile) up to $100,000

 

One-way business class airfare for executive

Repatriation Allowance    One-time lump sum allowance in the amount of one
months’ base salary Exception    If termination is for Cause, then Repatriation
Expense and Repatriation Allowance will not apply

 

21

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

EXHIBIT B-1

AOP PSU NOTICE OF GRANT AND AWARD AGREEMENT

 

22

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

MAGNACHIP SEMICONDUCTOR CORPORATION

NOTICE OF GRANT OF AOP RESTRICTED STOCK UNITS

The Participant has been granted an award (the “Award”) of certain Restricted
Stock Units (the “Units”) of MagnaChip Semiconductor Corporation pursuant to the
MagnaChip Semiconductor Corporation 2011 Equity Incentive Plan (the “Plan”) and
the Magnachip Semiconductor Corporation Restricted Stock Units Agreement (AOP
Performance) (the “Restricted Stock Units Agreement”) as follows:

 

Participant:    Young Joon Kim Date of Grant:    April 30, 2018 (the “Grant
Date”) Total Number of Restricted Stock Units:    At maximum achievement, 65,100
Restricted Stock Units (the “Maximum Award”), subject to adjustment as provided
by the Restricted Stock Units Agreement. The Participant’s overall target-level
award hereunder is equal to 55,720 Restricted Stock Units (the “Target Award”).
Initial Vesting Date and Vesting Conditions:   

The Participant’s right to receive all or any portion of the Units granted
hereunder is contingent upon the Company’s achievement of the performance goals
(the “Performance Goals”) specified in the performance matrix attached as
Exhibit A to this Grant Notice (the “Performance Matrix”), measured over the
“Performance Period” indicated in the Performance Matrix.

 

Within 60 days following the end of the Performance Period, the Committee shall
certify whether and to what extent the Units have been earned for each
Performance Goal for the Performance Period (the actual date of such Committee
certification, the “Certification Date”). The Committee’s determination of the
foregoing shall be final and binding on the Participant absent a showing of
manifest error or that the Committee acted in bad faith. Upon such
determinations by the Committee, the applicable portion of the Units determined
by the Cumulative Payout Percentage (as defined in the Performance Matrix) as a
fraction of the Target Award shall vest and become non-forfeitable (subject to
the Participant’s continuous Service from the Grant Date through the end of the
Performance Period except as provided by Section 2.2(b) of the Restricted Stock
Units Agreement) (each such Unit, a “Vested Unit”). On the Certification Date,
any Units which do not vest in accordance with the immediately preceding
sentence shall immediately be forfeited and cancelled, and the Participant shall
not be entitled to any compensation or other amount with respect thereto.
Notwithstanding any other provision of this Grant Notice or the Restricted Stock
Units Agreement, but subject to Section 2.2

 

23

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

   of the Restricted Stock Units Agreement, no portion of the Units shall vest
until the Committee has made the foregoing determinations. Local Law:    The
laws, rules and regulations of South Korea and the United States, of which the
Participant is a resident or taxpayer.

 

24

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

By their signatures below, the Company and the Participant agree that the Award
is governed by this Grant Notice and by the provisions of the Plan and the
Restricted Stock Units Agreement, each of which are attached to and made a part
of this document. The Participant acknowledges receipt of copies of the Plan and
the Restricted Stock Units Agreement, represents that the Participant has read
and is familiar with their provisions, and hereby accepts the Award subject to
all of their terms and conditions.

 

MAGNACHIP SEMICONDUCTOR CORPORATION   PARTICIPANT
By:                                                                            
 

 

    Signature Its:                                     
                                        

 

    Date Address:    

 

    Address    

 

 

ATTACHMENTS: 2011 Equity Incentive Plan, as amended to the Date of Grant, and
Restricted Stock Units Agreement

 

25

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

EXHIBIT A

Performance Matrix

“Adjusted EBITDA” means the Company’s GAAP net income (loss) before interest
expense, net, income tax expenses (benefits), depreciation and amortization,
adjusted to exclude (i) restructuring, impairment and other (gain),
(ii) equity-based compensation expense, (iii) foreign currency loss (gain), net,
(iv) derivative valuation loss (gain), net, and (v) restatement related expense.
Specific determination of Adjusted EBITDA shall be based solely upon the
judgment of the Committee.

“Gross Margin” means the aggregate consolidated gross profit for the Performance
Period as a percentage of the Revenue for the Performance Period.

“Revenue” means the dollar amount net product revenue recognized by the Company
on a consolidated basis for the Performance Period.

The “Performance Period” shall be January 1, 2018 through December 31, 2018.

The “Performance Goals” shall be Adjusted EBITDA (weighted 1/3), Revenue
(weighted 1/3) and Gross Margin (weighted 1/3), each as measured on a cumulative
basis over the Performance Period.

Each “Payout Percentage” shall be determined as follows:

 

Achievement

   Gross Margin     Payout Percentage (as a
fraction of Target Award)  

Threshold

     27.0 %      50 % 

Target

     28.0 %      100 % 

Maximum

     31.0 %      *  

 

Achievement

   Adjusted EBITDA      Payout Percentage (as a
fraction of Target Award)  

Threshold

   $ 79.1 M        50 % 

Target

   $ 93.1M        100 % 

Maximum

   $ 107.1M        *  

 

26

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

Achievement

   Revenue      Payout Percentage (as a
fraction of Target Award)  

Threshold

   $ 737M        50 % 

Target

   $ 758M        100 % 

Maximum

   $ 790M        *  

 

* Indicates the Payout Percentage determined by dividing the Maximum Award by
the Target Award.

Straight-line interpolation shall be used to determine the Payout Percentage for
any level of achievement between threshold performance and the target
performance and between target achievement and maximum achievement, based upon
the Payout Percentages set forth above.

To determine the total number of Restricted Stock Units that become Vested Units
in respect of the Performance Period, the Committee shall add the Payout
Percentage achieved for each Performance Goal, and divide such amount by 3 (the
resulting percentage, the “Cumulative Payout Percentage”), and then multiply the
Cumulative Payout Percentage (expressed as a fraction) by the Target Award;
provided, that in the event that “threshold” level is not achieved for a
Performance Goal, then the Payout Percentage for such Performance Goal for
purposes of the foregoing calculation shall be 0%. For the avoidance of doubt,
no Restricted Stock Units shall vest in respect of a Performance Goal unless the
“threshold” level of achievement shown above for such Performance Goal has been
achieved.

 

27

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

MAGNACHIP SEMICONDUCTOR CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

(AOP PERFORMANCE)

MagnaChip Semiconductor Corporation (the “Company”) has granted to the
Participant named in the Notice of Grant of AOP Restricted Stock Units (the
“Grant Notice”) to which this Restricted Stock Units Agreement (this
“Agreement”) is attached an Award consisting of Restricted Stock Units subject
to the terms and conditions set forth in the Grant Notice and this Agreement.
The Participant shall be entitled to Dividend Equivalent Rights with respect to
the Award.

The Award has been granted pursuant to and shall in all respects be subject to
the terms conditions of the MagnaChip Semiconductor Corporation 2011 Equity
Incentive Plan (the “Plan”), as amended from time to time, the provisions of
which are incorporated herein by reference. By signing the Grant Notice, the
Participant: (a) acknowledges receipt of and represents that the Participant has
read and is familiar with the Grant Notice, this Agreement, the Plan and a
prospectus for the Plan prepared in connection with the registration with the
Securities and Exchange Commission of the shares issuable pursuant to the Award
(the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and
conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Grant Notice, this Agreement or
the Plan.

1.    DEFINITIONS AND CONSTRUCTION.

1.1    Definitions. Unless otherwise defined herein, capitalized terms shall
have the meanings assigned to such terms in the Grant Notice or the Plan.

(a)    “Dividend Equivalent Units” mean additional Restricted Stock Units
credited pursuant to Section 4.3.

(b)    “Units” mean the Restricted Stock Units originally granted pursuant to
the Award and the Dividend Equivalent Units credited pursuant to the Award, as
both shall be adjusted from time to time pursuant to Section 10.

1.2    Construction. Captions and titles contained herein are for convenience
only and shall not affect the meaning or interpretation of any provision of this
Agreement. 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.

2.    CERTAIN CONDITIONS OF THE AWARD.

2.1    Compliance with Local Law. The Participant agrees that the Participant
will not acquire shares pursuant to the Award, or transfer, assign, sell or
otherwise deal in such shares except in compliance with Local Law.

 

28

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

2.2    Employment Conditions. By accepting the Award, the Participant
acknowledges and agrees that:

(a)    Any notice period mandated under Local Law shall not be treated as
Service for the purpose of determining the vesting of the Award; and the
Participant’s right to receive shares in settlement of the Award after
termination of Service, if any, will be measured by the date of termination of
the Participant’s active Service and will not be extended by any notice period
mandated under Local Law. Subject to the foregoing and the provisions of the
Plan, the Company, in its sole discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such termination.

(b)    Notwithstanding anything to the contrary in the Grant Notice, if the
Participant is terminated without Cause or resigns for Good Reason (each as
defined in the Participant’s employment agreement with the Company dated
April 26, 2018) prior to the settlement of the Award, the Participant will
remain eligible to vest (determined in accordance with the terms set forth in
the Grant Notice) in a pro rata portion of the Restricted Stock Units on the
Certification Date, determined by multiplying the total number of Restricted
Stock Units remaining outstanding and unvested immediately prior to such
termination by a fraction, the numerator of which is the number of full months
that the Participant provided continuous Service during the Performance Period,
and the denominator of which is the number of full months in the full
Performance Period. All Restricted Stock Units in excess of the pro rata portion
thereof that remains outstanding in accordance with the immediately preceding
sentence shall immediately be forfeited and cancelled, and the Participant shall
not be entitled to any compensation or other amount with respect thereto. If a
Change in Control occurs upon or following such termination and prior to the end
of the Performance Period, then the Restricted Stock Units remaining outstanding
and unvested immediately prior to the Change in Control (after application of
the foregoing provisions of this Section 2.2(b)) shall vest and become
non-forfeitable at the target level of achievement (determined in accordance
with the Grant Notice) immediately upon the occurrence of the Change in Control
and the date that the Change in Control is consummated shall be the Settlement
Date for purposes of Section 7 hereof.

(c)    The vesting of the Award shall cease upon, and no Units shall vest
following, the Participant’s termination of Service for any reason other than as
set forth in Section 2.2 (b). Further, all unvested Units will be forfeited and
cancelled and the Participant will not be entitled to any compensation or other
amount with respect thereto.

(d)    The Plan is established voluntarily by the Company. It is discretionary
in nature and it may be modified, amended, suspended or terminated by the
Company at any time, unless otherwise provided in the Plan and this Agreement.

(e)    The grant of the Award is voluntary and occasional and does not create
any contractual or other right to receive future grants of Awards, or benefits
in lieu of Awards, even if Awards have been granted repeatedly in the past.

(f)    All decisions with respect to future Award grants, if any, will be at the
sole discretion of the Company.

(g)    The Participant’s participation in the Plan shall not create a right to
further Service with any Participating Company and shall not interfere with the
ability of any Participating Company to terminate the Participant’s Service at
any time, with or without cause, insofar as permitted under Local Law.

 

29

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

(h)    The Participant is voluntarily participating in the Plan.

(i)    The Award and resulting shares, if any, are an extraordinary item that
does not constitute compensation of any kind for Service of any kind rendered to
any Participating Company, and which is outside the scope of the Participant’s
employment contract, if any.

(j)    The Award is not part of normal or expected compensation or salary for
any purpose, including, but not limited to, calculating any severance,
resignation, termination, redundancy, end-of-service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments.

(k)    In the event that the Participant is not an employee of the Company, the
Award grant will not be interpreted to form an employment contract or
relationship with the Company; and furthermore the Award grant will not be
interpreted to form an employment contract with any other Participating Company.

(l)    The future value of the underlying shares is unknown and cannot be
predicted with certainty. If the Participant obtains shares upon settlement of
the Award, the value of those shares may increase or decrease.

(m)    In consideration of the grant of an Award, no claim or entitlement to
compensation or damages arises from termination of the Award or diminution in
value of the Award or shares acquired upon settlement of the Award resulting
from termination of the Participant’s Service (for any reason whether or not in
breach of Local Law) and the Participant irrevocably releases the Company and
each other Participating Company from any such claim that may arise. If,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen then, by signing this Agreement, the Participant
shall be deemed irrevocably to have waived the Participant’s entitlement to
pursue such a claim.

2.3    Data Privacy Consent.

(a)    THE PARTICIPANT HEREBY EXPLICITLY AND UNAMBIGUOUSLY CONSENTS TO THE
COLLECTION, USE AND TRANSFER, IN ELECTRONIC OR OTHER FORM, OF THE PARTICIPANT’S
PERSONAL DATA AS DESCRIBED IN THIS DOCUMENT BY AND AMONG THE MEMBERS OF THE
PARTICIPATING COMPANY GROUP FOR THE EXCLUSIVE PURPOSE OF IMPLEMENTING,
ADMINISTERING AND MANAGING THE PARTICIPANT’S PARTICIPATION IN THE PLAN.

(b)    THE PARTICIPANT UNDERSTANDS THAT THE PARTICIPATING COMPANY GROUP HOLDS
CERTAIN PERSONAL INFORMATION ABOUT THE PARTICIPANT, INCLUDING, BUT NOT LIMITED
TO, THE PARTICIPANT’S NAME, HOME ADDRESS AND TELEPHONE NUMBER, DATE OF BIRTH,
SOCIAL INSURANCE NUMBER OR OTHER IDENTIFICATION NUMBER, SALARY, NATIONALITY, JOB
TITLE, ANY SHARES OR DIRECTORSHIPS HELD IN THE COMPANY, DETAILS OF ALL AWARDS OR
ANY OTHER ENTITLEMENT TO SHARES AWARDED, CANCELED,

 

30

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

EXERCISED, VESTED, UNVESTED OR OUTSTANDING IN THE PARTICIPANT’S FAVOR, FOR THE
PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING THE PLAN (“DATA”). THE
PARTICIPANT UNDERSTANDS THAT DATA MAY BE TRANSFERRED TO ANY THIRD PARTIES
ASSISTING IN THE IMPLEMENTATION, ADMINISTRATION AND MANAGEMENT OF THE PLAN, THAT
THESE RECIPIENTS MAY BE LOCATED IN THE PARTICIPANT’S COUNTRY OR ELSEWHERE, WHICH
MAY INCLUDE AREAS OUTSIDE THE EUROPEAN ECONOMIC AREA AND THAT THE RECIPIENT’S
COUNTRY MAY HAVE DIFFERENT DATA PRIVACY LAWS AND PROTECTIONS THAN THE
PARTICIPANT’S COUNTRY. THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY REQUEST A
LIST WITH THE NAMES AND ADDRESSES OF ANY POTENTIAL RECIPIENTS OF THE DATA BY
CONTACTING THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE. THE
PARTICIPANT AUTHORIZES THE RECIPIENTS TO RECEIVE, POSSESS, USE, RETAIN AND
TRANSFER THE DATA, IN ELECTRONIC OR OTHER FORM, FOR THE PURPOSES OF
IMPLEMENTING, ADMINISTERING AND MANAGING THE PARTICIPANT’S PARTICIPATION IN THE
PLAN, INCLUDING ANY REQUISITE TRANSFER OF SUCH DATA AS MAY BE REQUIRED TO A
BROKER OR OTHER THIRD PARTY WITH WHOM THE PARTICIPANT MAY ELECT TO DEPOSIT ANY
SHARES ACQUIRED UPON SETTLEMENT OF THE AWARD. THE PARTICIPANT UNDERSTANDS THAT
DATA WILL BE HELD ONLY AS LONG AS IS NECESSARY TO IMPLEMENT, ADMINISTER AND
MANAGE THE PARTICIPANT’S PARTICIPATION IN THE PLAN. THE PARTICIPANT UNDERSTANDS
THAT HE OR SHE MAY, AT ANY TIME, VIEW DATA, REQUEST ADDITIONAL INFORMATION ABOUT
THE STORAGE AND PROCESSING OF DATA, REQUIRE ANY NECESSARY AMENDMENTS TO DATA OR
REFUSE OR WITHDRAW THE CONSENTS HEREIN, IN ANY CASE WITHOUT COST, BY CONTACTING
IN WRITING THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE. THE
PARTICIPANT UNDERSTANDS, HOWEVER, THAT REFUSING OR WITHDRAWING THE PARTICIPANT’S
CONSENT MAY AFFECT THE PARTICIPANT’S ABILITY TO PARTICIPATE IN THE PLAN. FOR
MORE INFORMATION ON THE CONSEQUENCES OF THE PARTICIPANT’S REFUSAL TO CONSENT OR
WITHDRAWAL OF CONSENT, THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY CONTACT
THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE.

3.    ADMINISTRATION.

All questions of interpretation concerning the Grant Notice, this Agreement, the
Plan or any other form of agreement or other document employed by the Company in
the administration of the Plan or the Award shall be determined by the
Committee. All such determinations by the Committee shall be final, binding and
conclusive upon all persons having an interest in the Award, unless fraudulent
or made in bad faith. Any and all actions, decisions and determinations taken or
made by the Committee in the exercise of its discretion pursuant to the Plan or
the Award or other agreement thereunder (other than determining questions of
interpretation pursuant to the preceding sentence) shall be final, binding and
conclusive upon all persons having an interest in the Award. Any Officer shall
have the authority to act on behalf of the Company with respect to any matter,
right, obligation, or election which is the responsibility of or which is
allocated to the Company herein, provided the Officer has actual authority with
respect to such matter, right, obligation, or election.

4.    THE AWARD.

4.1    Grant of Units. The Company hereby grants to the Participant, subject to
the provisions of this Agreement, the Total Number of Restricted Stock Units set
forth in the Grant

 

31

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

Notice, subject to adjustment as provided in Section 4.3 and Section 10. Subject
to the terms and conditions set forth in the Grant Notice, this Agreement and
the Plan, each Unit represents a right to receive on a date determined in
accordance with the Grant Notice and this Agreement one (1) share of Stock.

4.2    No Monetary Payment Required. The Participant is not required to make any
monetary payment (other than applicable tax withholding, if any) as a condition
to receiving the Units or shares of Stock issued upon settlement of the Units,
the consideration for which shall be past services actually rendered or future
services to be rendered to a Participating Company or for its benefit.
Notwithstanding the foregoing, if required by applicable law, the Participant
shall furnish consideration in the form of cash or past services rendered to a
Participating Company or for its benefit having a value not less than the par
value of the shares of Stock issued upon settlement of the Units.

4.3    Dividend Equivalent Units. On the date that the Company pays a cash
dividend to holders of Stock generally, the Participant shall be credited with a
number of additional whole Dividend Equivalent Units determined by dividing
(a) the product of (i) the dollar amount of the cash dividend paid per share of
Stock on such date and (ii) the total number of Restricted Stock Units and
Dividend Equivalent Units previously credited to the Participant pursuant to the
Award and which have not been settled or forfeited pursuant to the Company
Reacquisition Right (as defined below) as of such date, by (b) the Fair Market
Value per share of Stock on such date. Any resulting fractional Dividend
Equivalent Unit shall be rounded to the nearest whole number. Such additional
Dividend Equivalent Units shall be subject to the same terms and conditions and
shall be settled or forfeited in the same manner and at the same time as the
Restricted Stock Units originally subject to the Award with respect to which
they have been credited.

5.    VESTING OF UNITS.

Units acquired pursuant to this Agreement shall become Vested Units as provided
in the Grant Notice. Dividend Equivalent Units shall become Vested Units at the
same time as the Restricted Stock Units originally subject to the Award with
respect to which they have been credited.

6.    COMPANY REACQUISITION RIGHT.

6.1    Grant of Company Reacquisition Right. In the event that the Participant’s
Service with a Participating Company is terminated by the Participating Company
for Cause, insofar as permitted under Local Law the Participant shall forfeit
and the Company shall automatically reacquire all Units (whether vested or
unvested), and the Participant shall not be entitled to any payment therefor
(the “Company Reacquisition Right”).

7.    SETTLEMENT OF THE AWARD.

7.1    Issuance of Shares of Stock. Subject to the provisions of Section 7.3
below, as soon as reasonably practicable following the date upon which Units
vest (such date, the “Settlement Date”) (but in no event later than March 15th
of the calendar year following the calendar year in which such vesting occurs),
the Company shall issue to the Participant with respect to each such Vested Unit
one (1) share of Stock. Shares of Stock issued in settlement of Units

 

32

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

shall not be subject to any restriction on transfer other than any such
restriction as may be required pursuant to Section 7.3, Section 7 or the
Company’s Trading Compliance Policy or any stock ownership guidelines or holding
period guidelines established by the Board from time to time.

7.2    Beneficial Ownership of Shares; Certificate Registration. The Participant
hereby authorizes the Company, in its sole discretion, to deposit any or all
shares acquired by the Participant pursuant to the settlement of the Award with
the Company’s transfer agent, including any successor transfer agent, to be held
in book entry form, or to deposit such shares for the benefit of the Participant
with any broker with which the Participant has an account relationship of which
the Company has notice. Except as provided by the foregoing, a certificate for
the shares acquired by the Participant shall be registered in the name of the
Participant, or, if applicable, in the names of the heirs of the Participant.

7.3    Restrictions on Grant of the Award and Issuance of Shares. The grant of
the Award and issuance of shares of Stock upon settlement of the Award shall be
subject to compliance with all applicable requirements of United States federal,
state law and Local Law with respect to such securities. No shares of Stock may
be issued hereunder if the issuance of such shares would constitute a violation
of any applicable United States federal, state, or Local Law, or other law or
regulations or the requirements of any stock exchange or market system upon
which the Stock may then be listed. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, or the
impracticality of doing so, deemed by the Company’s legal counsel to be
necessary to the lawful issuance of any shares subject to the Award shall
relieve the Company of any liability in respect of the failure to issue such
shares as to which such requisite authority shall not have been obtained. As a
condition to the settlement of the Award, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate,
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Company.

7.4    Fractional Shares. The Company shall not be required to issue fractional
shares upon the settlement of the Award.

8.    TAX WITHHOLDING.

Regardless of any action the Company or the Participant’s employer (the
“Employer”) takes with respect to any or all income tax, social insurance,
payroll tax, payment on account or other tax-related withholding (“Tax-Related
Items”), the Participant acknowledges and agrees that the ultimate liability for
all Tax-Related Items legally due by the Participant is and remains the
Participant’s responsibility and that the Company and or the Employer (i) make
no representations nor undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of this grant of Units, including the grant
and vesting of Units, subsequent delivery of shares and/or cash related to such
Units or the subsequent sale of any shares acquired pursuant to such Units and
receipt of any dividend equivalent payments (if any) and (ii) do not commit to
structure the terms or any aspect of this grant of Units to reduce or eliminate
the Participant’s liability for Tax-Related Items. The Participant shall pay the
Company or the Employer any amount of Tax-Related Items that the Company or the
Employer may be required to withhold as a result of the Participant’s
participation in the Plan or the Participant’s receipt of Units that cannot be
satisfied by the means described below. Further, if the Participant is subject
to tax in more than one jurisdiction, the

 

33

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

Participant acknowledges that the Company and/or Employer (or former Employer,
as applicable) may be required to withhold or account for Tax-Related Items in
more than one jurisdiction. The Company may refuse to deliver the shares if the
Participant fails to comply with the Participant’s obligations in connection
with the Tax-Related Items.

Prior to the taxable or tax withholding event, as applicable, the Participant
shall pay, or make adequate arrangements satisfactory to the Company or to the
Employer (in their sole discretion) to satisfy all Tax-Related Items; provided
that the arrangement in clause (1) of the following sentence shall be deemed to
be satisfactory to the extent that it alone, or combined with any other
arrangement satisfactory to the Board, satisfies the Participant’s obligations
in connection with the Tax-Related Items. In this regard, the Participant
authorizes the Company or Employer to withhold all applicable Tax-Related Items
legally payable by the Participant by (1) withholding a number of Shares
otherwise deliverable equal to the Retained Share Amount (as defined below),
(2) withholding from the Participant’s wages or other cash compensation paid by
the Company and/or Employer; and/or (3) withholding from proceeds of the sale of
shares acquired upon settlement of the Units, either through a voluntary sale or
through a sale arranged by the Company (on the Participant’s behalf pursuant to
this authorization), to the extent permitted by the Administrator. The “Retained
Share Amount” shall mean a number of shares equal to the quotient of the
statutory tax withholding obligation of the Company triggered by the Units on
the relevant date, divided by the Fair Market Value of one share on the relevant
date or as otherwise provided in the Plan. If the obligation for Tax-Related
Items is satisfied by withholding a number of shares as described herein, the
Participant understands that he or she will be deemed to have been issued the
full number of shares subject to the settled Units, notwithstanding that a
number of shares are held back solely for the purpose of paying the Tax-Related
Items due as a result of the settlement of the Units.

The Participant acknowledges and understands that the Participant should consult
a tax adviser regarding the Participant’s tax obligations prior to such
settlement or disposition.

9.    EFFECT OF CHANGE IN CONTROL.

In the event of a Change in Control during the Performance Period, subject to
the Participant’s continued Service on the date that such Change in Control is
consummated, the Target Award (and any Dividend Equivalent Units associated
therewith) will vest and the date that the Change in Control is consummated will
be treated as the Settlement Date for purposes of Section 7 hereof. No
Restricted Stock Units in excess of the Target Award shall vest pursuant to this
Agreement and all Restricted Stock Units in excess of the Target Award shall
immediately be forfeited and cancelled, and the Participant shall not be
entitled to any compensation or other amount with respect thereto.

10.    ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

Subject to any required action by the stockholders of the Company, in the event
of any change in the Stock effected without receipt of consideration by the
Company, whether through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of the Company, or in the event of

 

34

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

payment of a dividend or distribution to the stockholders of the Company in a
form other than Stock (other than regular, periodic cash dividends paid on Stock
pursuant to the Company’s dividend policy) that has a material effect on the
Fair Market Value of shares of Stock, appropriate and proportionate adjustments
shall be made in the number of Units subject to the Award and/or the number and
kind of shares or other property to be issued in settlement of the Award, in
order to prevent dilution or enlargement of the Participant’s rights under the
Award. For purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without receipt of
consideration by the Company.” Any and all new, substituted or additional
securities or other property (other than regular, periodic cash dividends paid
on Stock pursuant to the Company’s dividend policy, which shall be treated in
accordance with Section 4.3) to which the Participant is entitled by reason of
ownership of Units acquired pursuant to this Award will be immediately subject
to the provisions of this Award on the same basis as all Units originally
acquired hereunder. Any fractional Unit or share resulting from an adjustment
pursuant to this Section shall be rounded down to the nearest whole number. Such
adjustments shall be determined by the Committee, and its determination shall be
final, binding and conclusive.

11.    RIGHTS AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.

The Participant shall have no rights as a stockholder with respect to any shares
which may be issued in settlement of this Award until the date of the issuance
of such shares (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date the shares are issued, except as provided in
Section 4.3 and Section 10. If the Participant is an Employee, the Participant
understands and acknowledges that, except as otherwise provided in a separate,
written employment agreement between a Participating Company and the
Participant, the Participant’s employment is “at will” and is for no specified
term unless otherwise required under applicable law. Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Participant’s Service at any time.

12.    LEGENDS.

The Company may at any time place legends referencing any applicable United
States federal, state or non-U.S. securities law, including Local Law,
restrictions on all certificates representing shares of stock issued pursuant to
this Agreement. The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares acquired
pursuant to this Award in the possession of the Participant in order to carry
out the provisions of this Section.

13.    MISCELLANEOUS PROVISIONS.

13.1    Termination or Amendment. The Committee may terminate or amend the Plan
or this Agreement at any time; provided, however, that except as provided in
Section 9 in connection with a Change in Control, no such termination or
amendment may adversely affect the Participant’s rights under this Agreement
without the consent of the Participant unless such termination or amendment is
necessary to comply with applicable law or government regulation. No amendment
or addition to this Agreement shall be effective unless in writing.

 

35

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

13.2    Nontransferability of the Award. Prior to the issuance of shares of
Stock on the applicable Settlement Date, neither this Award nor any Units
subject to this Award shall be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights
with respect to the Award shall be exercisable during the Participant’s lifetime
only by the Participant or the Participant’s guardian or legal representative.

13.3    Further Instruments. The parties hereto agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.

13.4    Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.

13.5    Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by a Participating Company, or upon deposit in
the U.S. Post Office or non-U.S. postal service, by registered or certified
mail, or with a nationally recognized overnight courier service, with postage
and fees prepaid, addressed to the other party at the address of such party set
forth in the Grant Notice or at such other address as such party may designate
in writing from time to time to the other party.

(a)    Description of Electronic Delivery. The Plan documents, which may include
but do not necessarily include: the Plan, the Grant Notice, this Agreement, the
Plan Prospectus, and any reports of the Company provided generally to the
Company’s stockholders, may be delivered to the Participant electronically. In
addition, if permitted by the Company, the Participant may deliver
electronically the Grant Notice to the Company or to such third party involved
in administering the Plan as the Company may designate from time to time. Such
means of electronic delivery may include but do not necessarily include the
delivery of a link to a Company intranet or the Internet site of a third party
involved in administering the Plan, the delivery of the document via e-mail or
such other means of electronic delivery specified by the Company.

(b)    Consent to Electronic Delivery. The Participant acknowledges that the
Participant has read Section 13.5(a) of this Agreement and consents to the
electronic delivery of the Plan documents and, if permitted by the Company, the
delivery of the Grant Notice, as described in Section 13.5(a). The Participant
acknowledges that he or she may receive from the Company a paper copy of any
documents delivered electronically at no cost to the Participant by contacting
the Company by telephone or in writing. The Participant further acknowledges
that the Participant will be provided with a paper copy of any documents if the
attempted electronic

 

36

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

delivery of such documents fails. Similarly, the Participant understands that
the Participant must provide the Company or any designated third party
administrator with a paper copy of any documents if the attempted electronic
delivery of such documents fails. The Participant may revoke his or her consent
to the electronic delivery of documents described in Section 13.5(a) or may
change the electronic mail address to which such documents are to be delivered
(if the Participant has provided an electronic mail address) at any time by
notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant
understands that he or she is not required to consent to electronic delivery of
documents described in Section 13.5(a).

13.6    Integrated Agreement. The Grant Notice (including its exhibits), this
Agreement and the Plan shall constitute the entire understanding and agreement
of the Participant and the Participating Company Group with respect to the
subject matter contained herein or therein and supersede any prior agreements,
understandings, restrictions, representations, or warranties among the
Participant and the Participating Company Group with respect to such subject
matter. To the extent contemplated herein or therein, the provisions of the
Grant Notice, this Agreement and the Plan shall survive any settlement of the
Award and shall remain in full force and effect.

13.7    Country-Specific Terms and Conditions. Notwithstanding any other
provision of this Agreement to the contrary, the Award shall be subject to the
specific terms and conditions, if any, set forth in the Appendix to this
Agreement which are applicable to the Participant’s country of residence, the
provisions of which are incorporated in and constitute part of this Agreement.
Moreover, if the Participant relocates to one of the countries included in the
Appendix, the specific terms and conditions applicable to such country will
apply to the Award to the extent the Company determines that the application of
such terms and conditions is necessary or advisable in order to comply with
local law or facilitate the administration of the Plan or this Agreement.

13.8    Applicable Law. This Agreement shall be governed by the laws of the
State of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within the State of
California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties as evidenced by this Agreement,
the parties hereby submit to and consent to the jurisdiction of the State of
California and agree that such litigation shall be conducted only in the courts
of the County of Santa Clara, California, or the federal courts of the United
States for the Northern District of California, and no other courts, where this
Agreement is made and/or performed.

13.9    Counterparts. The Grant Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

13.10    Clawback. The Award will be subject to recoupment in accordance with
any clawback or recoupment policy of the Company, including, without limitation,
any clawback or recoupment policy that the Company is required to adopt pursuant
to the listing standards of any national securities exchange or association on
which the Company’s securities are listed or as is otherwise required by the
Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law.

 

37

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

APPENDIX

ADDITIONAL TERMS AND CONDITIONS OF

MAGNACHIP SEMICONDUCTOR CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

TERMS AND CONDITIONS

This Appendix, which is part of the Agreement, includes additional terms and
conditions of the Agreement that will apply to the Participant if the
Participant is resident in the countries listed below. Capitalized terms used
but not defined herein shall have the same meanings assigned to them in the Plan
and the Agreement.

NOTIFICATIONS

This Appendix also includes information regarding exchange control and certain
other issues of which the Participant should be aware with respect to the
Participant’s participation in the Plan. The information is based on the
securities, exchange control and other laws in effect in the respective
countries as of February 2016. Such laws are often complex and change
frequently. As a result, the Company strongly recommends that the Participant
not rely on the information in this Appendix as the only source of information
relating to the consequences of the Participant’s participation in the Plan
because such information may be out-of-date when the Participant’s Units vest
and/or the Participant sells any shares acquired under the Plan.

In addition, the information contained herein is general in nature and may not
apply to the Participant’s particular situation. As a result, the Company is not
in a position to assure the Participant of any particular result. The
Participant is therefore advised to seek appropriate professional advice as to
how the relevant laws in the Participant’s country may apply to the
Participant’s situation.

Finally, if the Participant is a citizen or resident of a country other than
that in which the Participant is currently working, the information contained
herein may not apply to the Participant.

COUNTRY-SPECIFIC LANGUAGE

Below please find country specific language that applies to Korea.

SOUTH KOREA

Terms and Conditions

There are no country-specific provisions.

Notifications

Exchange Control Information. If the Participant receives in excess of
US$500,000 from the sale of shares, Korean exchange control laws require the
Participant to repatriate the proceeds to South Korea within 36 months of sale.

 

38

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

UNITED STATES

Terms and Conditions for Participants subject to Tax in the United States

 

1. The following paragraph is inserted as a new Section 13.10:

“Section 409A of the U.S. Internal Revenue Code. To the extent applicable, it is
intended that this Agreement comply with the provisions of Code Section 409A, so
that the income inclusion provisions of Code Section 409A(a)(1) do not apply.
This Agreement shall be administered in a manner consistent with this intent.
Notwithstanding the foregoing, the Company makes no representations that the
payments and benefits provided under this Agreement comply with Section 409A,
and in no event shall any Participating Company or any of their respective
Subsidiary Corporations or Affiliates be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred by the
Participant on account of non-compliance with Section 409A or otherwise. For
purposes of this Agreement, “Code Section 409A” means Section 409A of the
Internal Revenue Code of 1986, as amended, and will also include any regulations
or any other formal guidance promulgated with respect to such Section by the
U.S. Department of the Treasury or the Internal Revenue Service.”

Notifications

None.

 

39

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

EXHIBIT B-2

TSR PSU NOTICE OF GRANT AND AWARD AGREEMENT

 

40

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

MAGNACHIP SEMICONDUCTOR CORPORATION

NOTICE OF GRANT OF TSR RESTRICTED STOCK UNITS

The Participant has been granted an award (the “Award”) of certain Restricted
Stock Units (the “Units”) of MagnaChip Semiconductor Corporation pursuant to the
MagnaChip Semiconductor Corporation 2011 Equity Incentive Plan (the “Plan”) and
the MagnaChip Semiconductor Corporation Restricted Stock Units Agreement (TSR)
(the “Restricted Stock Units Agreement”), as follows:

 

Participant:    Young Joon Kim Date of Grant:    April 30, 2018 (the “Grant
Date”) Total Number of Restricted Stock Units:    At supermaximum achievement,
37,200, subject to adjustment as provided by the Restricted Stock Units
Agreement. The Participant’s overall target-level award hereunder is equal
to 18,600 Restricted Stock Units (the “Target Award”). Initial Vesting Date and
Vesting Conditions:   

The Participant’s right to receive all or any portion of the Units granted
hereunder is contingent upon the Company’s achievement of the performance goal
(the “Performance Goal”) specified in the performance matrix attached as
Exhibit A to this Grant Notice (the “Performance Matrix”), measured over the
“Performance Period” indicated in the Performance Matrix.

 

Within 60 days following the end of the Performance Period, the Committee shall
certify whether and to what extent the Units have been earned for the
Performance Period (the actual date of such Committee certification, the
“Certification Date”). The Committee’s determination of the foregoing shall be
final and binding on the Participant absent a showing of manifest error or that
the Committee acted in bad faith. Upon such determinations by the Committee, the
applicable portion of the Units determined by the Payout Percentage (as defined
in the Performance Matrix) as a fraction of the Target Award shall vest and
become non-forfeitable (subject to the Participant’s continuous Service from the
Grant Date through the end of the Performance Period except as provided by
Section 2.2(b) of the Restricted Stock Units Agreement) (each such Unit, a
“Vested Unit”). On the Certification Date, any Units which do not vest in
accordance with the immediately preceding sentence shall immediately be
forfeited and cancelled, and the Participant shall not be entitled to any
compensation or other amount with respect thereto. Notwithstanding any other
provision of this Grant Notice or the Restricted Stock Units Agreement, but
subject to Section 2.2 of the

 

41

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

   Restricted Stock Units Agreement, no portion of the Units shall vest until
the Committee has made the foregoing determinations. Local Law:    The laws,
rules and regulations of South Korea and the United States, of which the
Participant is a resident or taxpayer.

 

42

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

By their signatures below, the Company and the Participant agree that the Award
is governed by this Grant Notice and by the provisions of the Plan and the
Restricted Stock Units Agreement, each of which are attached to and made a part
of this document. The Participant acknowledges receipt of copies of the Plan and
the Restricted Stock Units Agreement, represents that the Participant has read
and is familiar with their provisions, and hereby accepts the Award subject to
all of their terms and conditions.

 

MAGNACHIP SEMICONDUCTOR CORPORATION   PARTICIPANT
By:                                     
                                            

 

    Signature Its:                                     
                                            

 

    Date Address:    

 

    Address    

 

 

ATTACHMENTS: 2011 Equity Incentive Plan, as amended to the Date of Grant, and
Restricted Stock Units Agreement

 

43

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

EXHIBIT A

Performance Matrix

The “Performance Period” shall be January 1, 2018 through December 31, 2020.

The “Performance Goal” shall be the three-year total shareholder return
(“TSR”) of the Company relative to the other entities in the S&P Semiconductor
Index (the “TSR Index”). Achievement of the Performance Goal shall be determined
by the percentile rank of the Company’s TSR relative to the TSR of each other
entity in the TSR Index.

Determination of TSR: TSR for the Company and each other entity in the TSR Index
shall be determined in accordance with the following formula. TSR shall be equal
to the quotient of (a) divided by (b), expressed as a percentage, where:

(a) is equal to the sum of (i) and (ii), where (i) is the difference determined
by the Ending Price minus the Starting Price (each as defined below); and
(ii) is the sum of all dividends paid on one share of common stock during the
Performance Period, provided that all dividends are treated as reinvested at the
time paid; and

(b) is equal to the Starting Price.

For purposes of determining TSR:

(i) “Starting Price” means the volume-weighted average price of one share of
common stock on the applicable stock exchange during the 30 days immediately
preceding the first day of the Performance Period.

(ii) “Ending Price” means the volume-weighted average price of one share of
common stock on the applicable stock exchange during the 30 days immediately
preceding the last day of the Performance Period.

The Company’s “Percentile” shall be equal to the absolute value of the
difference obtained by (I) the quotient of (A) the Rank (as defined below),
divided by (B) the total number of entities in the TSR Index (including the
Company, but after removal of any entities in accordance with calculation of the
Rank), expressed as a percentage, minus (II) 100%.

The Company’s “Rank” shall be determined by the Company’s position within the
ranking of each entity in the TSR Index (including the Company) in descending
order based on their respective TSRs (with the highest TSR having a Rank of
one). For purposes of developing the ordering provided in the
immediately-preceding sentence, (A) any entity that filed for bankruptcy
protection under the United States Bankruptcy Code during the Performance Period
shall be assigned the lowest order of any entity in the TSR Index, and (B) any
entity that is acquired during the Performance Period, or otherwise no longer
listed on a national securities exchange at the end of the Performance Period
(other than the Company), shall be removed from the TSR Index and shall be
excluded for purposes of ordering the entities in the TSR Index (and for
purposes of calculating the Company’s Percentile).

 

44

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

The “Payout Percentage” shall be determined as follows, subject to the
exceptions below:

 

  •   Threshold Performance: If the Company’s Percentile equals 35% (the
“Threshold Percentile”), the Payout Percentage shall be 50%. The Payout
Percentage shall equal zero if the Company Percentile is less than 35%.

 

  •   Target Performance: If the Company’s Percentile equals 60% (the “Target
Percentile”), the Payout Percentage shall be 100%.

 

  •   Maximum Performance: If the Company’s Percentile equals 75% (the “Maximum
Percentile”), the Payout Percentage shall be 150%.

 

  •   Supermaximum Performance: If the Company’s Percentile equals the
Percentile achieved by a Rank of one in the TSR Index, the Payout Percentage
shall be 200%.

 

  •   Straight-line interpolation shall be used to determine the Payout
Percentage for any Company Percentile between the Threshold Percentile and the
Target Percentile and between the Target Percentile and the Maximum Percentile,
based upon the Payout Percentages set forth above.

The following exception exists with respect to the Payout Percentage
determination set forth above: If the Company’s absolute TSR (irrespective of
its Rank or Percentile) is less than 0%, then the Payout Percentage shall be 0%.

 

45

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

MAGNACHIP SEMICONDUCTOR CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

(TSR PERFORMANCE)

MagnaChip Semiconductor Corporation (the “Company”) has granted to the
Participant named in the Notice of Grant of TSR Restricted Stock Units (the
“Grant Notice”) to which this Restricted Stock Units Agreement (this
“Agreement”) is attached an Award consisting of Restricted Stock Units subject
to the terms and conditions set forth in the Grant Notice and this Agreement.
The Participant shall be entitled to Dividend Equivalent Rights with respect to
the Award.

The Award has been granted pursuant to and shall in all respects be subject to
the terms conditions of the MagnaChip Semiconductor Corporation 2011 Equity
Incentive Plan (the “Plan”), as amended from time to time, the provisions of
which are incorporated herein by reference. By signing the Grant Notice, the
Participant: (a) acknowledges receipt of and represents that the Participant has
read and is familiar with the Grant Notice, this Agreement, the Plan and a
prospectus for the Plan prepared in connection with the registration with the
Securities and Exchange Commission of the shares issuable pursuant to the Award
(the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and
conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Grant Notice, this Agreement or
the Plan.

1.    DEFINITIONS AND CONSTRUCTION.

1.1    Definitions. Unless otherwise defined herein, capitalized terms shall
have the meanings assigned to such terms in the Grant Notice or the Plan.

(a)    “Dividend Equivalent Units” mean additional Restricted Stock Units
credited pursuant to Section 4.3.

(b)    “Units” mean the Restricted Stock Units originally granted pursuant to
the Award and the Dividend Equivalent Units credited pursuant to the Award, as
both shall be adjusted from time to time pursuant to Section 10.

1.2    Construction. Captions and titles contained herein are for convenience
only and shall not affect the meaning or interpretation of any provision of this
Agreement. 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.

2.    CERTAIN CONDITIONS OF THE AWARD.

2.1    Compliance with Local Law. The Participant agrees that the Participant
will not acquire shares pursuant to the Award, or transfer, assign, sell or
otherwise deal in such shares except in compliance with Local Law.

 

46

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

2.2    Employment Conditions. By accepting the Award, the Participant
acknowledges and agrees that:

(a)    Any notice period mandated under Local Law shall not be treated as
Service for the purpose of determining the vesting of the Award; and the
Participant’s right to receive shares in settlement of the Award after
termination of Service, if any, will be measured by the date of termination of
the Participant’s active Service and will not be extended by any notice period
mandated under Local Law. Subject to the foregoing and the provisions of the
Plan, the Company, in its sole discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such termination.

(b)    Notwithstanding anything to the contrary in the Grant Notice, if the
Participant is terminated without Cause or resigns for Good Reason (each as
defined in the Participant’s employment agreement with the Company dated
April 26, 2018) prior to the settlement of the Award, the Participant will
remain eligible to vest (determined in accordance with the terms set forth in
the Grant Notice) in a pro rata portion of the Restricted Stock Units on the
Certification Date, determined by multiplying the total number of Restricted
Stock Units remaining outstanding and unvested immediately prior to such
termination by a fraction, the numerator of which is the number of full months
that the Participant provided continuous Service during the Performance Period,
and the denominator of which is the number of full months in the full
Performance Period. All Restricted Stock Units in excess of the pro rata portion
thereof that remains outstanding in accordance with the immediately preceding
sentence shall immediately be forfeited and cancelled, and the Participant shall
not be entitled to any compensation or other amount with respect thereto. If a
Change in Control occurs upon or following such termination and prior to the end
of the Performance Period, then the Restricted Stock Units remaining outstanding
and unvested immediately prior to the Change in Control (after application of
the foregoing provisions of this Section 2.2(b)) shall vest and become
non-forfeitable at the target level of achievement (determined in accordance
with the Grant Notice) immediately upon the occurrence of the Change in Control
and the date that the Change in Control is consummated shall be the Settlement
Date for purposes of Section 7 hereof.

(c)    The vesting of the Award shall cease upon, and no Units shall vest
following, the Participant’s termination of Service for any reason other than as
set forth in Section 2.2 (b). Further, all unvested Units will be forfeited and
cancelled and the Participant will not be entitled to any compensation or other
amount with respect thereto.

(d)    The Plan is established voluntarily by the Company. It is discretionary
in nature and it may be modified, amended, suspended or terminated by the
Company at any time, unless otherwise provided in the Plan and this Agreement.

(e)    The grant of the Award is voluntary and occasional and does not create
any contractual or other right to receive future grants of Awards, or benefits
in lieu of Awards, even if Awards have been granted repeatedly in the past.

(f)    All decisions with respect to future Award grants, if any, will be at the
sole discretion of the Company.

(g)    The Participant’s participation in the Plan shall not create a right to
further Service with any Participating Company and shall not interfere with the
ability of any Participating Company to terminate the Participant’s Service at
any time, with or without cause, insofar as permitted under Local Law.

 

47

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

(h)    The Participant is voluntarily participating in the Plan.

(i)    The Award and resulting shares, if any, are an extraordinary item that
does not constitute compensation of any kind for Service of any kind rendered to
any Participating Company, and which is outside the scope of the Participant’s
employment contract, if any.

(j)    The Award is not part of normal or expected compensation or salary for
any purpose, including, but not limited to, calculating any severance,
resignation, termination, redundancy, end-of-service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments.

(k)    In the event that the Participant is not an employee of the Company, the
Award grant will not be interpreted to form an employment contract or
relationship with the Company; and furthermore the Award grant will not be
interpreted to form an employment contract with any other Participating Company.

(l)    The future value of the underlying shares is unknown and cannot be
predicted with certainty. If the Participant obtains shares upon settlement of
the Award, the value of those shares may increase or decrease.

(m)    In consideration of the grant of an Award, no claim or entitlement to
compensation or damages arises from termination of the Award or diminution in
value of the Award or shares acquired upon settlement of the Award resulting
from termination of the Participant’s Service (for any reason whether or not in
breach of Local Law) and the Participant irrevocably releases the Company and
each other Participating Company from any such claim that may arise. If,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen then, by signing this Agreement, the Participant
shall be deemed irrevocably to have waived the Participant’s entitlement to
pursue such a claim.

2.3    Data Privacy Consent.

(a)    THE PARTICIPANT HEREBY EXPLICITLY AND UNAMBIGUOUSLY CONSENTS TO THE
COLLECTION, USE AND TRANSFER, IN ELECTRONIC OR OTHER FORM, OF THE PARTICIPANT’S
PERSONAL DATA AS DESCRIBED IN THIS DOCUMENT BY AND AMONG THE MEMBERS OF THE
PARTICIPATING COMPANY GROUP FOR THE EXCLUSIVE PURPOSE OF IMPLEMENTING,
ADMINISTERING AND MANAGING THE PARTICIPANT’S PARTICIPATION IN THE PLAN.

(b)    THE PARTICIPANT UNDERSTANDS THAT THE PARTICIPATING COMPANY GROUP HOLDS
CERTAIN PERSONAL INFORMATION ABOUT THE PARTICIPANT, INCLUDING, BUT NOT LIMITED
TO, THE PARTICIPANT’S NAME, HOME ADDRESS AND TELEPHONE NUMBER, DATE OF BIRTH,
SOCIAL INSURANCE NUMBER OR OTHER IDENTIFICATION NUMBER, SALARY, NATIONALITY, JOB
TITLE, ANY SHARES OR DIRECTORSHIPS HELD IN THE COMPANY, DETAILS OF ALL AWARDS OR
ANY OTHER ENTITLEMENT TO SHARES AWARDED, CANCELED,

 

48

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

EXERCISED, VESTED, UNVESTED OR OUTSTANDING IN THE PARTICIPANT’S FAVOR, FOR THE
PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING THE PLAN (“DATA”). THE
PARTICIPANT UNDERSTANDS THAT DATA MAY BE TRANSFERRED TO ANY THIRD PARTIES
ASSISTING IN THE IMPLEMENTATION, ADMINISTRATION AND MANAGEMENT OF THE PLAN, THAT
THESE RECIPIENTS MAY BE LOCATED IN THE PARTICIPANT’S COUNTRY OR ELSEWHERE, WHICH
MAY INCLUDE AREAS OUTSIDE THE EUROPEAN ECONOMIC AREA AND THAT THE RECIPIENT’S
COUNTRY MAY HAVE DIFFERENT DATA PRIVACY LAWS AND PROTECTIONS THAN THE
PARTICIPANT’S COUNTRY. THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY REQUEST A
LIST WITH THE NAMES AND ADDRESSES OF ANY POTENTIAL RECIPIENTS OF THE DATA BY
CONTACTING THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE. THE
PARTICIPANT AUTHORIZES THE RECIPIENTS TO RECEIVE, POSSESS, USE, RETAIN AND
TRANSFER THE DATA, IN ELECTRONIC OR OTHER FORM, FOR THE PURPOSES OF
IMPLEMENTING, ADMINISTERING AND MANAGING THE PARTICIPANT’S PARTICIPATION IN THE
PLAN, INCLUDING ANY REQUISITE TRANSFER OF SUCH DATA AS MAY BE REQUIRED TO A
BROKER OR OTHER THIRD PARTY WITH WHOM THE PARTICIPANT MAY ELECT TO DEPOSIT ANY
SHARES ACQUIRED UPON SETTLEMENT OF THE AWARD. THE PARTICIPANT UNDERSTANDS THAT
DATA WILL BE HELD ONLY AS LONG AS IS NECESSARY TO IMPLEMENT, ADMINISTER AND
MANAGE THE PARTICIPANT’S PARTICIPATION IN THE PLAN. THE PARTICIPANT UNDERSTANDS
THAT HE OR SHE MAY, AT ANY TIME, VIEW DATA, REQUEST ADDITIONAL INFORMATION ABOUT
THE STORAGE AND PROCESSING OF DATA, REQUIRE ANY NECESSARY AMENDMENTS TO DATA OR
REFUSE OR WITHDRAW THE CONSENTS HEREIN, IN ANY CASE WITHOUT COST, BY CONTACTING
IN WRITING THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE. THE
PARTICIPANT UNDERSTANDS, HOWEVER, THAT REFUSING OR WITHDRAWING THE PARTICIPANT’S
CONSENT MAY AFFECT THE PARTICIPANT’S ABILITY TO PARTICIPATE IN THE PLAN. FOR
MORE INFORMATION ON THE CONSEQUENCES OF THE PARTICIPANT’S REFUSAL TO CONSENT OR
WITHDRAWAL OF CONSENT, THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY CONTACT
THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE.

3.    ADMINISTRATION.

All questions of interpretation concerning the Grant Notice, this Agreement, the
Plan or any other form of agreement or other document employed by the Company in
the administration of the Plan or the Award shall be determined by the
Committee. All such determinations by the Committee shall be final, binding and
conclusive upon all persons having an interest in the Award, unless fraudulent
or made in bad faith. Any and all actions, decisions and determinations taken or
made by the Committee in the exercise of its discretion pursuant to the Plan or
the Award or other agreement thereunder (other than determining questions of
interpretation pursuant to the preceding sentence) shall be final, binding and
conclusive upon all persons having an interest in the Award. Any Officer shall
have the authority to act on behalf of the Company with respect to any matter,
right, obligation, or election which is the responsibility of or which is
allocated to the Company herein, provided the Officer has actual authority with
respect to such matter, right, obligation, or election.

4.    THE AWARD.

4.1    Grant of Units. The Company hereby grants to the Participant, subject to
the provisions of this Agreement, the Total Number of Restricted Stock Units set
forth in the Grant

 

49

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

Notice, subject to adjustment as provided in Section 4.3 and Section 10. Subject
to the terms and conditions set forth in the Grant Notice, this Agreement and
the Plan, each Unit represents a right to receive on a date determined in
accordance with the Grant Notice and this Agreement one (1) share of Stock.

4.2    No Monetary Payment Required. The Participant is not required to make any
monetary payment (other than applicable tax withholding, if any) as a condition
to receiving the Units or shares of Stock issued upon settlement of the Units,
the consideration for which shall be past services actually rendered or future
services to be rendered to a Participating Company or for its benefit.
Notwithstanding the foregoing, if required by applicable law, the Participant
shall furnish consideration in the form of cash or past services rendered to a
Participating Company or for its benefit having a value not less than the par
value of the shares of Stock issued upon settlement of the Units.

4.3    Dividend Equivalent Units. On the date that the Company pays a cash
dividend to holders of Stock generally, the Participant shall be credited with a
number of additional whole Dividend Equivalent Units determined by dividing
(a) the product of (i) the dollar amount of the cash dividend paid per share of
Stock on such date and (ii) the total number of Restricted Stock Units and
Dividend Equivalent Units previously credited to the Participant pursuant to the
Award and which have not been settled or forfeited pursuant to the Company
Reacquisition Right (as defined below) as of such date, by (b) the Fair Market
Value per share of Stock on such date. Any resulting fractional Dividend
Equivalent Unit shall be rounded to the nearest whole number. Such additional
Dividend Equivalent Units shall be subject to the same terms and conditions and
shall be settled or forfeited in the same manner and at the same time as the
Restricted Stock Units originally subject to the Award with respect to which
they have been credited.

5.    VESTING OF UNITS.

Units acquired pursuant to this Agreement shall become Vested Units as provided
in the Grant Notice. Dividend Equivalent Units shall become Vested Units at the
same time as the Restricted Stock Units originally subject to the Award with
respect to which they have been credited.

6.    COMPANY REACQUISITION RIGHT.

6.1    Grant of Company Reacquisition Right. In the event that the Participant’s
Service with a Participating Company is terminated by the Participating Company
for Cause, insofar as permitted under Local Law the Participant shall forfeit
and the Company shall automatically reacquire all Units (whether vested or
unvested), and the Participant shall not be entitled to any payment therefor
(the “Company Reacquisition Right”).

7.    SETTLEMENT OF THE AWARD.

7.1    Issuance of Shares of Stock. Subject to the provisions of Section 7.3
below, as soon as reasonably practicable following the date upon which Units
vest (such date, the “Settlement Date”) (but in no event later than March 15th
of the calendar year following the calendar year in which such vesting occurs),
the Company shall issue to the Participant with respect to each such Vested Unit
one (1) share of Stock. Shares of Stock issued in settlement of Units

 

50

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

shall not be subject to any restriction on transfer other than any such
restriction as may be required pursuant to Section 7.3, Section 7 or the
Company’s Trading Compliance Policy or any stock ownership guidelines or holding
period guidelines established by the Board from time to time.

7.2    Beneficial Ownership of Shares; Certificate Registration. The Participant
hereby authorizes the Company, in its sole discretion, to deposit any or all
shares acquired by the Participant pursuant to the settlement of the Award with
the Company’s transfer agent, including any successor transfer agent, to be held
in book entry form, or to deposit such shares for the benefit of the Participant
with any broker with which the Participant has an account relationship of which
the Company has notice. Except as provided by the foregoing, a certificate for
the shares acquired by the Participant shall be registered in the name of the
Participant, or, if applicable, in the names of the heirs of the Participant.

7.3    Restrictions on Grant of the Award and Issuance of Shares. The grant of
the Award and issuance of shares of Stock upon settlement of the Award shall be
subject to compliance with all applicable requirements of United States federal,
state law and Local Law with respect to such securities. No shares of Stock may
be issued hereunder if the issuance of such shares would constitute a violation
of any applicable United States federal, state, or Local Law, or other law or
regulations or the requirements of any stock exchange or market system upon
which the Stock may then be listed. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, or the
impracticality of doing so, deemed by the Company’s legal counsel to be
necessary to the lawful issuance of any shares subject to the Award shall
relieve the Company of any liability in respect of the failure to issue such
shares as to which such requisite authority shall not have been obtained. As a
condition to the settlement of the Award, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate,
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Company.

7.4    Fractional Shares. The Company shall not be required to issue fractional
shares upon the settlement of the Award.

8.    TAX WITHHOLDING.

Regardless of any action the Company or the Participant’s employer (the
“Employer”) takes with respect to any or all income tax, social insurance,
payroll tax, payment on account or other tax-related withholding (“Tax-Related
Items”), the Participant acknowledges and agrees that the ultimate liability for
all Tax-Related Items legally due by the Participant is and remains the
Participant’s responsibility and that the Company and or the Employer (i) make
no representations nor undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of this grant of Units, including the grant
and vesting of Units, subsequent delivery of shares and/or cash related to such
Units or the subsequent sale of any shares acquired pursuant to such Units and
receipt of any dividend equivalent payments (if any) and (ii) do not commit to
structure the terms or any aspect of this grant of Units to reduce or eliminate
the Participant’s liability for Tax-Related Items. The Participant shall pay the
Company or the Employer any amount of Tax-Related Items that the Company or the
Employer may be required to withhold as a result of the Participant’s
participation in the Plan or the Participant’s receipt of Units that cannot be
satisfied by the means described below. Further, if the Participant is subject
to tax in more than one jurisdiction, the

 

51

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

Participant acknowledges that the Company and/or Employer (or former Employer,
as applicable) may be required to withhold or account for Tax-Related Items in
more than one jurisdiction. The Company may refuse to deliver the shares if the
Participant fails to comply with the Participant’s obligations in connection
with the Tax-Related Items.

Prior to the taxable or tax withholding event, as applicable, the Participant
shall pay, or make adequate arrangements satisfactory to the Company or to the
Employer (in their sole discretion) to satisfy all Tax-Related Items; provided
that the arrangement in clause (1) of the following sentence shall be deemed to
be satisfactory to the extent that it alone, or combined with any other
arrangement satisfactory to the Board, satisfies the Participant’s obligations
in connection with the Tax-Related Items. In this regard, the Participant
authorizes the Company or Employer to withhold all applicable Tax-Related Items
legally payable by the Participant by (1) withholding a number of Shares
otherwise deliverable equal to the Retained Share Amount (as defined below),
(2) withholding from the Participant’s wages or other cash compensation paid by
the Company and/or Employer; and/or (3) withholding from proceeds of the sale of
shares acquired upon settlement of the Units, either through a voluntary sale or
through a sale arranged by the Company (on the Participant’s behalf pursuant to
this authorization), to the extent permitted by the Administrator. The “Retained
Share Amount” shall mean a number of shares equal to the quotient of the
statutory tax withholding obligation of the Company triggered by the Units on
the relevant date, divided by the Fair Market Value of one share on the relevant
date or as otherwise provided in the Plan. If the obligation for Tax-Related
Items is satisfied by withholding a number of shares as described herein, the
Participant understands that he or she will be deemed to have been issued the
full number of shares subject to the settled Units, notwithstanding that a
number of shares are held back solely for the purpose of paying the Tax-Related
Items due as a result of the settlement of the Units.

The Participant acknowledges and understands that the Participant should consult
a tax adviser regarding the Participant’s tax obligations prior to such
settlement or disposition.

9.    EFFECT OF CHANGE IN CONTROL.

In the event of a Change in Control during the Performance Period, subject to
the Participant’s continued Service on the date that such Change in Control is
consummated, the Target Award (and any Dividend Equivalent Units associated
therewith) will vest and the date that the Change in Control is consummated will
be treated as the Settlement Date for purposes of Section 7 hereof. No
Restricted Stock Units in excess of the Target Award shall vest pursuant to this
Agreement and all Restricted Stock Units in excess of the Target Award shall
immediately be forfeited and cancelled, and the Participant shall not be
entitled to any compensation or other amount with respect thereto.

10.    ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

Subject to any required action by the stockholders of the Company, in the event
of any change in the Stock effected without receipt of consideration by the
Company, whether through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of the Company, or in the event of

 

52

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

payment of a dividend or distribution to the stockholders of the Company in a
form other than Stock (other than regular, periodic cash dividends paid on Stock
pursuant to the Company’s dividend policy) that has a material effect on the
Fair Market Value of shares of Stock, appropriate and proportionate adjustments
shall be made in the number of Units subject to the Award and/or the number and
kind of shares or other property to be issued in settlement of the Award, in
order to prevent dilution or enlargement of the Participant’s rights under the
Award. For purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without receipt of
consideration by the Company.” Any and all new, substituted or additional
securities or other property (other than regular, periodic cash dividends paid
on Stock pursuant to the Company’s dividend policy, which shall be treated in
accordance with Section 4.3) to which the Participant is entitled by reason of
ownership of Units acquired pursuant to this Award will be immediately subject
to the provisions of this Award on the same basis as all Units originally
acquired hereunder. Any fractional Unit or share resulting from an adjustment
pursuant to this Section shall be rounded down to the nearest whole number. Such
adjustments shall be determined by the Committee, and its determination shall be
final, binding and conclusive.

11.    RIGHTS AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.

The Participant shall have no rights as a stockholder with respect to any shares
which may be issued in settlement of this Award until the date of the issuance
of such shares (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date the shares are issued, except as provided in
Section 4.3 and Section 10. If the Participant is an Employee, the Participant
understands and acknowledges that, except as otherwise provided in a separate,
written employment agreement between a Participating Company and the
Participant, the Participant’s employment is “at will” and is for no specified
term unless otherwise required under applicable law. Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Participant’s Service at any time.

12.    LEGENDS.

The Company may at any time place legends referencing any applicable United
States federal, state or non-U.S. securities law, including Local Law,
restrictions on all certificates representing shares of stock issued pursuant to
this Agreement. The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares acquired
pursuant to this Award in the possession of the Participant in order to carry
out the provisions of this Section.

13.    MISCELLANEOUS PROVISIONS.

13.1    Termination or Amendment. The Committee may terminate or amend the Plan
or this Agreement at any time; provided, however, that except as provided in
Section 9 in connection with a Change in Control, no such termination or
amendment may adversely affect the Participant’s rights under this Agreement
without the consent of the Participant unless such termination or amendment is
necessary to comply with applicable law or government regulation. No amendment
or addition to this Agreement shall be effective unless in writing.

 

53

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

13.2    Nontransferability of the Award. Prior to the issuance of shares of
Stock on the applicable Settlement Date, neither this Award nor any Units
subject to this Award shall be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights
with respect to the Award shall be exercisable during the Participant’s lifetime
only by the Participant or the Participant’s guardian or legal representative.

13.3    Further Instruments. The parties hereto agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.

13.4    Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.

13.5    Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by a Participating Company, or upon deposit in
the U.S. Post Office or non-U.S. postal service, by registered or certified
mail, or with a nationally recognized overnight courier service, with postage
and fees prepaid, addressed to the other party at the address of such party set
forth in the Grant Notice or at such other address as such party may designate
in writing from time to time to the other party.

(a)    Description of Electronic Delivery. The Plan documents, which may include
but do not necessarily include: the Plan, the Grant Notice, this Agreement, the
Plan Prospectus, and any reports of the Company provided generally to the
Company’s stockholders, may be delivered to the Participant electronically. In
addition, if permitted by the Company, the Participant may deliver
electronically the Grant Notice to the Company or to such third party involved
in administering the Plan as the Company may designate from time to time. Such
means of electronic delivery may include but do not necessarily include the
delivery of a link to a Company intranet or the Internet site of a third party
involved in administering the Plan, the delivery of the document via e-mail or
such other means of electronic delivery specified by the Company.

(b)    Consent to Electronic Delivery. The Participant acknowledges that the
Participant has read Section 13.5(a) of this Agreement and consents to the
electronic delivery of the Plan documents and, if permitted by the Company, the
delivery of the Grant Notice, as described in Section 13.5(a). The Participant
acknowledges that he or she may receive from the Company a paper copy of any
documents delivered electronically at no cost to the Participant by contacting
the Company by telephone or in writing. The Participant further acknowledges
that the Participant will be provided with a paper copy of any documents if the
attempted electronic

 

54

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

delivery of such documents fails. Similarly, the Participant understands that
the Participant must provide the Company or any designated third party
administrator with a paper copy of any documents if the attempted electronic
delivery of such documents fails. The Participant may revoke his or her consent
to the electronic delivery of documents described in Section 13.5(a) or may
change the electronic mail address to which such documents are to be delivered
(if the Participant has provided an electronic mail address) at any time by
notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant
understands that he or she is not required to consent to electronic delivery of
documents described in Section 13.5(a).

13.6    Integrated Agreement. The Grant Notice (including its exhibits), this
Agreement and the Plan shall constitute the entire understanding and agreement
of the Participant and the Participating Company Group with respect to the
subject matter contained herein or therein and supersede any prior agreements,
understandings, restrictions, representations, or warranties among the
Participant and the Participating Company Group with respect to such subject
matter. To the extent contemplated herein or therein, the provisions of the
Grant Notice, this Agreement and the Plan shall survive any settlement of the
Award and shall remain in full force and effect.

13.7    Country-Specific Terms and Conditions. Notwithstanding any other
provision of this Agreement to the contrary, the Award shall be subject to the
specific terms and conditions, if any, set forth in the Appendix to this
Agreement which are applicable to the Participant’s country of residence, the
provisions of which are incorporated in and constitute part of this Agreement.
Moreover, if the Participant relocates to one of the countries included in the
Appendix, the specific terms and conditions applicable to such country will
apply to the Award to the extent the Company determines that the application of
such terms and conditions is necessary or advisable in order to comply with
local law or facilitate the administration of the Plan or this Agreement.

13.8    Applicable Law. This Agreement shall be governed by the laws of the
State of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within the State of
California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties as evidenced by this Agreement,
the parties hereby submit to and consent to the jurisdiction of the State of
California and agree that such litigation shall be conducted only in the courts
of the County of Santa Clara, California, or the federal courts of the United
States for the Northern District of California, and no other courts, where this
Agreement is made and/or performed.

13.9    Counterparts. The Grant Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

13.10    Clawback. The Award will be subject to recoupment in accordance with
any clawback or recoupment policy of the Company, including, without limitation,
any clawback or recoupment policy that the Company is required to adopt pursuant
to the listing standards of any national securities exchange or association on
which the Company’s securities are listed or as is otherwise required by the
Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law.

 

55

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

APPENDIX

ADDITIONAL TERMS AND CONDITIONS OF

MAGNACHIP SEMICONDUCTOR CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

TERMS AND CONDITIONS

This Appendix, which is part of the Agreement, includes additional terms and
conditions of the Agreement that will apply to the Participant if the
Participant is resident in the countries listed below. Capitalized terms used
but not defined herein shall have the same meanings assigned to them in the Plan
and the Agreement.

NOTIFICATIONS

This Appendix also includes information regarding exchange control and certain
other issues of which the Participant should be aware with respect to the
Participant’s participation in the Plan. The information is based on the
securities, exchange control and other laws in effect in the respective
countries as of February 2016. Such laws are often complex and change
frequently. As a result, the Company strongly recommends that the Participant
not rely on the information in this Appendix as the only source of information
relating to the consequences of the Participant’s participation in the Plan
because such information may be out-of-date when the Participant’s Units vest
and/or the Participant sells any shares acquired under the Plan.

In addition, the information contained herein is general in nature and may not
apply to the Participant’s particular situation. As a result, the Company is not
in a position to assure the Participant of any particular result. The
Participant is therefore advised to seek appropriate professional advice as to
how the relevant laws in the Participant’s country may apply to the
Participant’s situation.

Finally, if the Participant is a citizen or resident of a country other than
that in which the Participant is currently working, the information contained
herein may not apply to the Participant.

COUNTRY-SPECIFIC LANGUAGE

Below please find country specific language that applies to Korea.

SOUTH KOREA

Terms and Conditions

There are no country-specific provisions.

Notifications

Exchange Control Information. If the Participant receives in excess of
US$500,000 from the sale of shares, Korean exchange control laws require the
Participant to repatriate the proceeds to South Korea within 36 months of sale.

 

56

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

UNITED STATES

Terms and Conditions for Participants subject to Tax in the United States

 

1. The following paragraph is inserted as a new Section 13.10:

“Section 409A of the U.S. Internal Revenue Code. To the extent applicable, it is
intended that this Agreement comply with the provisions of Code Section 409A, so
that the income inclusion provisions of Code Section 409A(a)(1) do not apply.
This Agreement shall be administered in a manner consistent with this intent.
Notwithstanding the foregoing, the Company makes no representations that the
payments and benefits provided under this Agreement comply with Section 409A,
and in no event shall any Participating Company or any of their respective
Subsidiary Corporations or Affiliates be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred by the
Participant on account of non-compliance with Section 409A or otherwise. For
purposes of this Agreement, “Code Section 409A” means Section 409A of the
Internal Revenue Code of 1986, as amended, and will also include any regulations
or any other formal guidance promulgated with respect to such Section by the
U.S. Department of the Treasury or the Internal Revenue Service.”

Notifications

None.

 

57

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

EXHIBIT B-3

TIME-BASED NOTICE OF GRANT AND RESTRICTED STOCK UNIT AWARD AGREEMENT

 

58

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

MAGNACHIP SEMICONDUCTOR CORPORATION

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

The Participant has been granted an award (the “Award”) of certain Restricted
Stock Units (the “Units”) of MagnaChip Semiconductor Corporation pursuant to the
MagnaChip Semiconductor Corporation 2011 Equity Incentive Plan (the “Plan”) and
the MagnaChip Semiconductor Corporation Restricted Stock Units Agreement (the
Restricted Stock Units Agreement”) as follows:

 

Participant:    Young Joon Kim Date of Grant:    April 30, 2018 (the “Grant
Date”) Total Number of Restricted Stock Units:    112,118, subject to adjustment
as provided by the Restricted Stock Units Agreement. Initial Vesting Date and
Vesting Conditions:    Subject to the terms of the Restricted Stock Units
Agreement and the Participant’s continued Service on the applicable vesting
date, except as provided by Section 2.2 of the Restricted Stock Units Agreement,
the Restricted Stock Units will vest (becoming “Vested Units”) as follows:   

Vesting Date

  

Restricted Stock Units

   6/30/18    52,518    12/31/18    15,500    12/31/19    19,900    12/31/20   
24,200 Local Law:    The laws, rules and regulations of South Korea and the
United States, of which the Participant is a resident or taxpayer.

 

59

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

By their signatures below, the Company and the Participant agree that the Award
is governed by this Grant Notice and by the provisions of the Plan and the
Restricted Stock Units Agreement, each of which are attached to and made a part
of this document. The Participant acknowledges receipt of copies of the Plan and
the Restricted Stock Units Agreement, represents that the Participant has read
and is familiar with their provisions, and hereby accepts the Award subject to
all of their terms and conditions.

 

MAGNACHIP SEMICONDUCTOR CORPORATION    PARTICIPANT
By:                                                                             
  

 

      Signature Its:                                     
                                          

 

      Date Address:      

 

      Address      

 

 

ATTACHMENTS: 2011 Equity Incentive Plan, as amended to the Date of Grant, and
Restricted Stock Units Agreement

 

60

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

MAGNACHIP SEMICONDUCTOR CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

MagnaChip Semiconductor Corporation (the “Company”) has granted to the
Participant named in the Notice of Grant of Restricted Stock Units (the “Grant
Notice”) to which this Restricted Stock Units Agreement (this “Agreement”) is
attached an Award consisting of Restricted Stock Units subject to the terms and
conditions set forth in the Grant Notice and this Agreement. The Participant
shall be entitled to Dividend Equivalent Rights with respect to the Award.

The Award has been granted pursuant to and shall in all respects be subject to
the terms conditions of the MagnaChip Semiconductor Corporation 2011 Equity
Incentive Plan (the “Plan”), as amended from time to time, the provisions of
which are incorporated herein by reference. By signing the Grant Notice, the
Participant: (a) acknowledges receipt of and represents that the Participant has
read and is familiar with the Grant Notice, this Agreement, the Plan and a
prospectus for the Plan prepared in connection with the registration with the
Securities and Exchange Commission of the shares issuable pursuant to the Award
(the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and
conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Grant Notice, this Agreement or
the Plan.

1.    DEFINITIONS AND CONSTRUCTION.

1.1    Definitions. Unless otherwise defined herein, capitalized terms shall
have the meanings assigned to such terms in the Grant Notice or the Plan.

(a)    “Dividend Equivalent Units” mean additional Restricted Stock Units
credited pursuant to Section 4.3.

(b)    “Units” mean the Restricted Stock Units originally granted pursuant to
the Award and the Dividend Equivalent Units credited pursuant to the Award, as
both shall be adjusted from time to time pursuant to Section 10.

1.2    Construction. Captions and titles contained herein are for convenience
only and shall not affect the meaning or interpretation of any provision of this
Agreement. 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.

2.    CERTAIN CONDITIONS OF THE AWARD.

2.1    Compliance with Local Law. The Participant agrees that the Participant
will not acquire shares pursuant to the Award, or transfer, assign, sell or
otherwise deal in such shares except in compliance with Local Law.

 

61

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

2.2    Employment Conditions. By accepting the Award, the Participant
acknowledges and agrees that:

(a)    Any notice period mandated under Local Law shall not be treated as
Service for the purpose of determining the vesting of the Award; and the
Participant’s right to receive shares in settlement of the Award after
termination of Service, if any, will be measured by the date of termination of
the Participant’s active Service and will not be extended by any notice period
mandated under Local Law. Subject to the foregoing and the provisions of the
Plan, the Company, in its sole discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such termination.

(b)    Notwithstanding anything to the contrary in the Grant Notice, if the
Participant is terminated without Cause or resigns for Good Reason, in each case
not in connection with a CIC Qualified Termination (each as defined in the
Participant’s employment agreement with the Company dated April 26, 2018) and
prior to the settlement of the Award, the Participant will vest in a pro rata
portion of the next tranche of Restricted Stock Units scheduled to vest
hereunder, determined by multiplying the number of unvested Restricted Stock
Units in such tranche by a fraction, the numerator of which is the number of
full months from the last vesting date (or, if none, the Grant Date) to the date
of such termination and the denominator of which is the number of full months
from the last vesting date (or, if none, the Grant Date) to the next vesting
date.

(c)    If the Participant incurs a CIC Qualified Termination, all unvested
Restricted Stock Units will fully vest on the date of such termination.

(d)    The vesting of the Award shall cease upon, and no Units shall vest
following, the Participant’s termination of Service for any reason other than as
set forth in Section 2.2(b) or (c). Further, all unvested Units will be
forfeited and cancelled and the Participant will not be entitled to any
compensation or other amount with respect thereto.

(e)    The Plan is established voluntarily by the Company. It is discretionary
in nature and it may be modified, amended, suspended or terminated by the
Company at any time, unless otherwise provided in the Plan and this Agreement.

(f)    The grant of the Award is voluntary and occasional and does not create
any contractual or other right to receive future grants of Awards, or benefits
in lieu of Awards, even if Awards have been granted repeatedly in the past.

(g)    All decisions with respect to future Award grants, if any, will be at the
sole discretion of the Company.

(h)    The Participant’s participation in the Plan shall not create a right to
further Service with any Participating Company and shall not interfere with the
ability of any Participating Company to terminate the Participant’s Service at
any time, with or without cause, insofar as permitted under Local Law.

(i)    The Participant is voluntarily participating in the Plan.

 

62

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

(j)    The Award and resulting shares, if any, are an extraordinary item that
does not constitute compensation of any kind for Service of any kind rendered to
any Participating Company, and which is outside the scope of the Participant’s
employment contract, if any.

(k)    The Award is not part of normal or expected compensation or salary for
any purpose, including, but not limited to, calculating any severance,
resignation, termination, redundancy, end-of-service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments.

(l)    In the event that the Participant is not an employee of the Company, the
Award grant will not be interpreted to form an employment contract or
relationship with the Company; and furthermore the Award grant will not be
interpreted to form an employment contract with any other Participating Company.

(m)    The future value of the underlying shares is unknown and cannot be
predicted with certainty. If the Participant obtains shares upon settlement of
the Award, the value of those shares may increase or decrease.

(n)    In consideration of the grant of an Award, no claim or entitlement to
compensation or damages arises from termination of the Award or diminution in
value of the Award or shares acquired upon settlement of the Award resulting
from termination of the Participant’s Service (for any reason whether or not in
breach of Local Law) and the Participant irrevocably releases the Company and
each other Participating Company from any such claim that may arise. If,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen then, by signing this Agreement, the Participant
shall be deemed irrevocably to have waived the Participant’s entitlement to
pursue such a claim.

2.3    Data Privacy Consent.

(a)    THE PARTICIPANT HEREBY EXPLICITLY AND UNAMBIGUOUSLY CONSENTS TO THE
COLLECTION, USE AND TRANSFER, IN ELECTRONIC OR OTHER FORM, OF THE PARTICIPANT’S
PERSONAL DATA AS DESCRIBED IN THIS DOCUMENT BY AND AMONG THE MEMBERS OF THE
PARTICIPATING COMPANY GROUP FOR THE EXCLUSIVE PURPOSE OF IMPLEMENTING,
ADMINISTERING AND MANAGING THE PARTICIPANT’S PARTICIPATION IN THE PLAN.

(b)    THE PARTICIPANT UNDERSTANDS THAT THE PARTICIPATING COMPANY GROUP HOLDS
CERTAIN PERSONAL INFORMATION ABOUT THE PARTICIPANT, INCLUDING, BUT NOT LIMITED
TO, THE PARTICIPANT’S NAME, HOME ADDRESS AND TELEPHONE NUMBER, DATE OF BIRTH,
SOCIAL INSURANCE NUMBER OR OTHER IDENTIFICATION NUMBER, SALARY, NATIONALITY, JOB
TITLE, ANY SHARES OR DIRECTORSHIPS HELD IN THE COMPANY, DETAILS OF ALL AWARDS OR
ANY OTHER ENTITLEMENT TO SHARES AWARDED, CANCELED, EXERCISED, VESTED, UNVESTED
OR OUTSTANDING IN THE PARTICIPANT’S FAVOR, FOR THE PURPOSE OF IMPLEMENTING,
ADMINISTERING AND MANAGING THE PLAN (“DATA”). THE PARTICIPANT UNDERSTANDS THAT
DATA MAY BE TRANSFERRED TO ANY THIRD PARTIES ASSISTING IN THE IMPLEMENTATION,
ADMINISTRATION AND MANAGEMENT OF THE PLAN, THAT

 

63

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

THESE RECIPIENTS MAY BE LOCATED IN THE PARTICIPANT’S COUNTRY OR ELSEWHERE, WHICH
MAY INCLUDE AREAS OUTSIDE THE EUROPEAN ECONOMIC AREA AND THAT THE RECIPIENT’S
COUNTRY MAY HAVE DIFFERENT DATA PRIVACY LAWS AND PROTECTIONS THAN THE
PARTICIPANT’S COUNTRY. THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY REQUEST A
LIST WITH THE NAMES AND ADDRESSES OF ANY POTENTIAL RECIPIENTS OF THE DATA BY
CONTACTING THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE. THE
PARTICIPANT AUTHORIZES THE RECIPIENTS TO RECEIVE, POSSESS, USE, RETAIN AND
TRANSFER THE DATA, IN ELECTRONIC OR OTHER FORM, FOR THE PURPOSES OF
IMPLEMENTING, ADMINISTERING AND MANAGING THE PARTICIPANT’S PARTICIPATION IN THE
PLAN, INCLUDING ANY REQUISITE TRANSFER OF SUCH DATA AS MAY BE REQUIRED TO A
BROKER OR OTHER THIRD PARTY WITH WHOM THE PARTICIPANT MAY ELECT TO DEPOSIT ANY
SHARES ACQUIRED UPON SETTLEMENT OF THE AWARD. THE PARTICIPANT UNDERSTANDS THAT
DATA WILL BE HELD ONLY AS LONG AS IS NECESSARY TO IMPLEMENT, ADMINISTER AND
MANAGE THE PARTICIPANT’S PARTICIPATION IN THE PLAN. THE PARTICIPANT UNDERSTANDS
THAT HE OR SHE MAY, AT ANY TIME, VIEW DATA, REQUEST ADDITIONAL INFORMATION ABOUT
THE STORAGE AND PROCESSING OF DATA, REQUIRE ANY NECESSARY AMENDMENTS TO DATA OR
REFUSE OR WITHDRAW THE CONSENTS HEREIN, IN ANY CASE WITHOUT COST, BY CONTACTING
IN WRITING THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE. THE
PARTICIPANT UNDERSTANDS, HOWEVER, THAT REFUSING OR WITHDRAWING THE PARTICIPANT’S
CONSENT MAY AFFECT THE PARTICIPANT’S ABILITY TO PARTICIPATE IN THE PLAN. FOR
MORE INFORMATION ON THE CONSEQUENCES OF THE PARTICIPANT’S REFUSAL TO CONSENT OR
WITHDRAWAL OF CONSENT, THE PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY CONTACT
THE PARTICIPANT’S LOCAL HUMAN RESOURCES REPRESENTATIVE.

3.    ADMINISTRATION.

All questions of interpretation concerning the Grant Notice, this Agreement, the
Plan or any other form of agreement or other document employed by the Company in
the administration of the Plan or the Award shall be determined by the
Committee. All such determinations by the Committee shall be final, binding and
conclusive upon all persons having an interest in the Award, unless fraudulent
or made in bad faith. Any and all actions, decisions and determinations taken or
made by the Committee in the exercise of its discretion pursuant to the Plan or
the Award or other agreement thereunder (other than determining questions of
interpretation pursuant to the preceding sentence) shall be final, binding and
conclusive upon all persons having an interest in the Award. Any Officer shall
have the authority to act on behalf of the Company with respect to any matter,
right, obligation, or election which is the responsibility of or which is
allocated to the Company herein, provided the Officer has actual authority with
respect to such matter, right, obligation, or election.

4.    THE AWARD.

4.1    Grant of Units. The Company hereby grants to the Participant, subject to
the provisions of this Agreement, the Total Number of Restricted Stock Units set
forth in the Grant Notice, subject to adjustment as provided in Section 4.3 and
Section 10. Subject to the terms and conditions set forth in the Grant Notice,
this Agreement and the Plan, each Unit represents a right to receive on a date
determined in accordance with the Grant Notice and this Agreement one (1) share
of Stock.

 

64

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

4.2    No Monetary Payment Required. The Participant is not required to make any
monetary payment (other than applicable tax withholding, if any) as a condition
to receiving the Units or shares of Stock issued upon settlement of the Units,
the consideration for which shall be past services actually rendered or future
services to be rendered to a Participating Company or for its benefit.
Notwithstanding the foregoing, if required by applicable law, the Participant
shall furnish consideration in the form of cash or past services rendered to a
Participating Company or for its benefit having a value not less than the par
value of the shares of Stock issued upon settlement of the Units.

4.3    Dividend Equivalent Units. On the date that the Company pays a cash
dividend to holders of Stock generally, the Participant shall be credited with a
number of additional whole Dividend Equivalent Units determined by dividing
(a) the product of (i) the dollar amount of the cash dividend paid per share of
Stock on such date and (ii) the total number of Restricted Stock Units and
Dividend Equivalent Units previously credited to the Participant pursuant to the
Award and which have not been settled or forfeited pursuant to the Company
Reacquisition Right (as defined below) as of such date, by (b) the Fair Market
Value per share of Stock on such date. Any resulting fractional Dividend
Equivalent Unit shall be rounded to the nearest whole number. Such additional
Dividend Equivalent Units shall be subject to the same terms and conditions and
shall be settled or forfeited in the same manner and at the same time as the
Restricted Stock Units originally subject to the Award with respect to which
they have been credited.

5.    VESTING OF UNITS.

Units acquired pursuant to this Agreement shall become Vested Units as provided
in the Grant Notice. Dividend Equivalent Units shall become Vested Units at the
same time as the Restricted Stock Units originally subject to the Award with
respect to which they have been credited.

6.    COMPANY REACQUISITION RIGHT.

6.1    Grant of Company Reacquisition Right. In the event that the Participant’s
Service with a Participating Company is terminated by the Participating Company
for Cause, insofar as permitted under Local Law the Participant shall forfeit
and the Company shall automatically reacquire all Units (whether vested or
unvested), and the Participant shall not be entitled to any payment therefor
(the “Company Reacquisition Right”).

7.    Settlement of the Award.

7.1    Issuance of Shares of Stock. Subject to the provisions of Section 7.3
below, as soon as reasonably practicable following the date upon which Units
vest (such date, the “Settlement Date”) (but in no event later than March 15th
of the calendar year of following the calendar year in which the Units vest),
the Company shall issue to the Participant with respect to each such Vested Unit
one (1) share of Stock. Shares of Stock issued in settlement of Units shall not
be subject to any restriction on transfer other than any such restriction as may
be required pursuant to Section 7.3, Section 7 or the Company’s Trading
Compliance Policy or any stock ownership guidelines or holding period guidelines
established by the Board from time to time.

 

65

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

7.2    Beneficial Ownership of Shares; Certificate Registration. The Participant
hereby authorizes the Company, in its sole discretion, to deposit any or all
shares acquired by the Participant pursuant to the settlement of the Award with
the Company’s transfer agent, including any successor transfer agent, to be held
in book entry form, or to deposit such shares for the benefit of the Participant
with any broker with which the Participant has an account relationship of which
the Company has notice. Except as provided by the foregoing, a certificate for
the shares acquired by the Participant shall be registered in the name of the
Participant, or, if applicable, in the names of the heirs of the Participant.

7.3    Restrictions on Grant of the Award and Issuance of Shares. The grant of
the Award and issuance of shares of Stock upon settlement of the Award shall be
subject to compliance with all applicable requirements of United States federal,
state law and Local Law with respect to such securities. No shares of Stock may
be issued hereunder if the issuance of such shares would constitute a violation
of any applicable United States federal, state, or Local Law, or other law or
regulations or the requirements of any stock exchange or market system upon
which the Stock may then be listed. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, or the
impracticality of doing so, deemed by the Company’s legal counsel to be
necessary to the lawful issuance of any shares subject to the Award shall
relieve the Company of any liability in respect of the failure to issue such
shares as to which such requisite authority shall not have been obtained. As a
condition to the settlement of the Award, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate,
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Company.

7.4    Fractional Shares. The Company shall not be required to issue fractional
shares upon the settlement of the Award.

8.    TAX WITHHOLDING.

Regardless of any action the Company or the Participant’s employer (the
“Employer”) takes with respect to any or all income tax, social insurance,
payroll tax, payment on account or other tax-related withholding (“Tax-Related
Items”), the Participant acknowledges and agrees that the ultimate liability for
all Tax-Related Items legally due by the Participant is and remains the
Participant’s responsibility and that the Company and or the Employer (i) make
no representations nor undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of this grant of Units, including the grant
and vesting of Units, subsequent delivery of shares and/or cash related to such
Units or the subsequent sale of any shares acquired pursuant to such Units and
receipt of any dividend equivalent payments (if any) and (ii) do not commit to
structure the terms or any aspect of this grant of Units to reduce or eliminate
the Participant’s liability for Tax-Related Items. The Participant shall pay the
Company or the Employer any amount of Tax-Related Items that the Company or the
Employer may be required to withhold as a result of the Participant’s
participation in the Plan or the Participant’s receipt of Units that cannot be
satisfied by the means described below. Further, if the Participant is subject
to tax in more than one jurisdiction, the Participant acknowledges that the
Company and/or Employer (or former Employer, as applicable) may be required to
withhold or account for Tax-Related Items in more than one jurisdiction. The
Company may refuse to deliver the shares if the Participant fails to comply with
the Participant’s obligations in connection with the Tax-Related Items.

 

66

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

Prior to the taxable or tax withholding event, as applicable, the Participant
shall pay, or make adequate arrangements satisfactory to the Company or to the
Employer (in their sole discretion) to satisfy all Tax-Related Items; provided
that the arrangement in clause (1) of the following sentence shall be deemed to
be satisfactory to the extent that it alone, or combined with any other
arrangement satisfactory to the Board, satisfies the Participant’s obligations
in connection with the Tax-Related Items. In this regard, the Participant
authorizes the Company or Employer to withhold all applicable Tax-Related Items
legally payable by the Participant by (1) withholding a number of Shares
otherwise deliverable equal to the Retained Share Amount (as defined below),
(2) withholding from the Participant’s wages or other cash compensation paid by
the Company and/or Employer; and/or (3) withholding from proceeds of the sale of
shares acquired upon settlement of the Units, either through a voluntary sale or
through a sale arranged by the Company (on the Participant’s behalf pursuant to
this authorization), to the extent permitted by the Administrator. The “Retained
Share Amount” shall mean a number of shares equal to the quotient of the
statutory tax withholding obligation of the Company triggered by the Units on
the relevant date, divided by the Fair Market Value of one share on the relevant
date or as otherwise provided in the Plan. If the obligation for Tax-Related
Items is satisfied by withholding a number of shares as described herein, the
Participant understands that he or she will be deemed to have been issued the
full number of shares subject to the settled Units, notwithstanding that a
number of shares are held back solely for the purpose of paying the Tax-Related
Items due as a result of the settlement of the Units.

The Participant acknowledges and understands that the Participant should consult
a tax adviser regarding the Participant’s tax obligations prior to such
settlement or disposition.

9.    EFFECT OF CHANGE IN CONTROL.

The Award shall be subject to the terms of Sections 13(b) and 13(c) of the Plan
in the event of a Change in Control.

10.    ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

Subject to any required action by the stockholders of the Company, in the event
of any change in the Stock effected without receipt of consideration by the
Company, whether through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the stockholders of the Company in a
form other than Stock (other than regular, periodic cash dividends paid on Stock
pursuant to the Company’s dividend policy) that has a material effect on the
Fair Market Value of shares of Stock, appropriate and proportionate adjustments
shall be made in the number of Units subject to the Award and/or the number and
kind of shares or other property to be issued in settlement of the Award, in
order to prevent dilution or enlargement of the Participant’s rights under the
Award. For purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without receipt of
consideration by the Company.” Any and all new, substituted or additional
securities or other property (other than regular, periodic cash dividends paid
on Stock pursuant to the Company’s dividend policy, which shall be treated in
accordance with Section 4.3) to which the Participant is entitled by reason of
ownership of Units acquired pursuant to this Award

 

67

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

will be immediately subject to the provisions of this Award on the same basis as
all Units originally acquired hereunder. Any fractional Unit or share resulting
from an adjustment pursuant to this Section shall be rounded down to the nearest
whole number. Such adjustments shall be determined by the Committee, and its
determination shall be final, binding and conclusive.

11.    RIGHTS AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.

The Participant shall have no rights as a stockholder with respect to any shares
which may be issued in settlement of this Award until the date of the issuance
of such shares (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date the shares are issued, except as provided in
Section 4.3 and Section 10. If the Participant is an Employee, the Participant
understands and acknowledges that, except as otherwise provided in a separate,
written employment agreement between a Participating Company and the
Participant, the Participant’s employment is “at will” and is for no specified
term unless otherwise required under applicable law. Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Participant’s Service at any time.

12.    LEGENDS.

The Company may at any time place legends referencing any applicable United
States federal, state or non-U.S. securities law, including Local Law,
restrictions on all certificates representing shares of stock issued pursuant to
this Agreement. The Participant shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares acquired
pursuant to this Award in the possession of the Participant in order to carry
out the provisions of this Section.

13.    MISCELLANEOUS PROVISIONS.

13.1    Termination or Amendment. The Committee may terminate or amend the Plan
or this Agreement at any time; provided, however, that except as provided in
Section 9 in connection with a Change in Control, no such termination or
amendment may adversely affect the Participant’s rights under this Agreement
without the consent of the Participant unless such termination or amendment is
necessary to comply with applicable law or government regulation. No amendment
or addition to this Agreement shall be effective unless in writing.

13.2    Nontransferability of the Award. Prior to the issuance of shares of
Stock on the applicable Settlement Date, neither this Award nor any Units
subject to this Award shall be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights
with respect to the Award shall be exercisable during the Participant’s lifetime
only by the Participant or the Participant’s guardian or legal representative.

 

68

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

13.3    Further Instruments. The parties hereto agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.

13.4    Binding Effect. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant’s
heirs, executors, administrators, successors and assigns.

13.5    Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery at the e-mail address, if
any, provided for the Participant by a Participating Company, or upon deposit in
the U.S. Post Office or non-U.S. postal service, by registered or certified
mail, or with a nationally recognized overnight courier service, with postage
and fees prepaid, addressed to the other party at the address of such party set
forth in the Grant Notice or at such other address as such party may designate
in writing from time to time to the other party.

(a)    Description of Electronic Delivery. The Plan documents, which may include
but do not necessarily include: the Plan, the Grant Notice, this Agreement, the
Plan Prospectus, and any reports of the Company provided generally to the
Company’s stockholders, may be delivered to the Participant electronically. In
addition, if permitted by the Company, the Participant may deliver
electronically the Grant Notice to the Company or to such third party involved
in administering the Plan as the Company may designate from time to time. Such
means of electronic delivery may include but do not necessarily include the
delivery of a link to a Company intranet or the Internet site of a third party
involved in administering the Plan, the delivery of the document via e-mail or
such other means of electronic delivery specified by the Company.

(b)    Consent to Electronic Delivery. The Participant acknowledges that the
Participant has read Section 13.5(a) of this Agreement and consents to the
electronic delivery of the Plan documents and, if permitted by the Company, the
delivery of the Grant Notice, as described in Section 13.5(a). The Participant
acknowledges that he or she may receive from the Company a paper copy of any
documents delivered electronically at no cost to the Participant by contacting
the Company by telephone or in writing. The Participant further acknowledges
that the Participant will be provided with a paper copy of any documents if the
attempted electronic delivery of such documents fails. Similarly, the
Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the
attempted electronic delivery of such documents fails. The Participant may
revoke his or her consent to the electronic delivery of documents described in
Section 13.5(a) or may change the electronic mail address to which such
documents are to be delivered (if the Participant has provided an electronic
mail address) at any time by notifying the Company of such revoked consent or
revised e-mail address by telephone, postal service or electronic mail. Finally,
the Participant understands that he or she is not required to consent to
electronic delivery of documents described in Section 13.5(a).

 

69

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

13.6    Integrated Agreement. The Grant Notice (including its exhibits), this
Agreement and the Plan shall constitute the entire understanding and agreement
of the Participant and the Participating Company Group with respect to the
subject matter contained herein or therein and supersede any prior agreements,
understandings, restrictions, representations, or warranties among the
Participant and the Participating Company Group with respect to such subject
matter. To the extent contemplated herein or therein, the provisions of the
Grant Notice, this Agreement and the Plan shall survive any settlement of the
Award and shall remain in full force and effect.

13.7    Country-Specific Terms and Conditions. Notwithstanding any other
provision of this Agreement to the contrary, the Award shall be subject to the
specific terms and conditions, if any, set forth in the Appendix to this
Agreement which are applicable to the Participant’s country of residence, the
provisions of which are incorporated in and constitute part of this Agreement.
Moreover, if the Participant relocates to one of the countries included in the
Appendix, the specific terms and conditions applicable to such country will
apply to the Award to the extent the Company determines that the application of
such terms and conditions is necessary or advisable in order to comply with
local law or facilitate the administration of the Plan or this Agreement.

13.8    Applicable Law. This Agreement shall be governed by the laws of the
State of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within the State of
California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties as evidenced by this Agreement,
the parties hereby submit to and consent to the jurisdiction of the State of
California and agree that such litigation shall be conducted only in the courts
of the County of Santa Clara, California, or the federal courts of the United
States for the Northern District of California, and no other courts, where this
Agreement is made and/or performed.

13.9    Counterparts. The Grant Notice may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

13.10    Clawback. The Award will be subject to recoupment in accordance with
any clawback or recoupment policy of the Company, including, without limitation,
any clawback or recoupment policy that the Company is required to adopt pursuant
to the listing standards of any national securities exchange or association on
which the Company’s securities are listed or as is otherwise required by the
Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
law.

 

70

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

APPENDIX

ADDITIONAL TERMS AND CONDITIONS OF

MAGNACHIP SEMICONDUCTOR CORPORATION

RESTRICTED STOCK UNITS AGREEMENT

TERMS AND CONDITIONS

This Appendix, which is part of the Agreement, includes additional terms and
conditions of the Agreement that will apply to the Participant if the
Participant is resident in the countries listed below. Capitalized terms used
but not defined herein shall have the same meanings assigned to them in the Plan
and the Agreement.

NOTIFICATIONS

This Appendix also includes information regarding exchange control and certain
other issues of which the Participant should be aware with respect to the
Participant’s participation in the Plan. The information is based on the
securities, exchange control and other laws in effect in the respective
countries as of February 2016. Such laws are often complex and change
frequently. As a result, the Company strongly recommends that the Participant
not rely on the information in this Appendix as the only source of information
relating to the consequences of the Participant’s participation in the Plan
because such information may be out-of-date when the Participant’s Units vest
and/or the Participant sells any shares acquired under the Plan.

In addition, the information contained herein is general in nature and may not
apply to the Participant’s particular situation. As a result, the Company is not
in a position to assure the Participant of any particular result. The
Participant is therefore advised to seek appropriate professional advice as to
how the relevant laws in the Participant’s country may apply to the
Participant’s situation.

Finally, if the Participant is a citizen or resident of a country other than
that in which the Participant is currently working, the information contained
herein may not apply to the Participant.

COUNTRY-SPECIFIC LANGUAGE

Below please find country specific language that applies to Korea.

SOUTH KOREA

Terms and Conditions

There are no country-specific provisions.

Notifications

Exchange Control Information. If the Participant receives in excess of
US$500,000 from the sale of shares, Korean exchange control laws require the
Participant to repatriate the proceeds to South Korea within 36 months of sale.

 

71

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

UNITED STATES

Terms and Conditions for Participants subject to Tax in the United States

 

1. The following paragraph is inserted as a new Section 13.10:

“Section 409A of the U.S. Internal Revenue Code. To the extent applicable, it is
intended that this Agreement comply with the provisions of Code Section 409A, so
that the income inclusion provisions of Code Section 409A(a)(1) do not apply.
This Agreement shall be administered in a manner consistent with this intent.
Notwithstanding the foregoing, the Company makes no representations that the
payments and benefits provided under this Agreement comply with Section 409A,
and in no event shall any Participating Company or any of their respective
Subsidiary Corporations or Affiliates be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred by the
Participant on account of non-compliance with Section 409A or otherwise. For
purposes of this Agreement, “Code Section 409A” means Section 409A of the
Internal Revenue Code of 1986, as amended, and will also include any regulations
or any other formal guidance promulgated with respect to such Section by the
U.S. Department of the Treasury or the Internal Revenue Service.”

Notifications

None.

 

72

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

EXHIBIT B-4

TERMS OF 2019 AND 2020 PERFORMANCE GRANTS

Subject to the Executive’s continued employment, within sixty (60) days
following each of January 1, 2019 and January 1, 2020 (each, a “60-day Period”),
the Board will establish performance goals for the 2019 Grants and the 2020
Grants, respectively, and make such grants (consistent with the below
allocations). The 2019 Grants and the 2020 Grants will have terms and conditions
consistent with those set forth in the Award Agreements; provided, however, that
if a Change in Control occurs (i) during the 60-day Period for a given year and
before the grant is made, then the Executive will receive the target amount of
shares with respect to such award, or (ii) prior to the year that the grant will
be made, then the Board will determine the number of performance stock units
that the Executive will receive in respect of such grant (if any) in its
discretion.

2019 and 2020 TSR PSU Grant and Payout Amounts:

 

Grant

  Performance Period     Payout at Threshold
(35% percentile
relative to Index)     Payout at Target
(60 percentile relative to
Index)     Payout at Maximum
(75% percentile
relative to index)     Payout at Super
Maximum (1st relative
to Index)  

2019 Grant

    1/1/2019-12/31/2021       11,940       23,880 (February 2022)       35,820  
    47,760  

2020 Grant

    1/1/2020-12/31/2022       14,520       29,040 (February 2023)       43,560  
    58,080  

2019 and 2020 AOP PSU Grant and Payout Amounts:

 

Grant

   Performance Period      Payout at Threshold      Payout at Target     
Payout at Maximum  

2019 Grant

     1/1/2019-12/31/2019        27,860        55,720        83,580  

2020 Grant

     1/1/2020-12/31/2020        33,880        67,760        101,640  

 

73

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

EXHIBIT C

FORM OF RELEASE

As used in this Release of Claims (this “Release”), the term “claims” will
include all claims, covenants, warranties, promises, undertakings, actions,
suits, causes of action, proceedings, obligations, debts, accounts, attorneys’
fees, judgments, losses, and liabilities, of whatsoever kind or nature, in law,
in equity, or otherwise. Capitalized terms used but not defined in this Release
will have the meanings given to them in the Employment Agreement dated April
[    ], 2018, between MagnaChip Semiconductor, Ltd. (the ”Company), MagnaChip
Semiconductor Corporation, a Delaware corporation (“Parent”), and Young Joon Kim
(my ”Employment Agreement”).

For and in consideration of the payments and benefits under Section 5(b) of the
Employment Agreement, and other good and valuable consideration, I, for and on
behalf of myself and my executors, heirs, administrators, representatives, and
assigns, hereby agree to release and forever discharge the Company, Parent and
all of their respective predecessors, successors, and past, current, and future
parent entities, affiliates, subsidiary entities, investors, directors,
shareholders, members, officers, general or limited partners, employees,
attorneys, agents, and representatives, and the employee benefit plans in which
I am or have been a participant by virtue of my employment with or service to
the Company (collectively, the “Company Releasees”), from any and all claims
that I have or may have had against the Company Releasees based on any events or
circumstances arising or occurring on or prior to the date hereof and arising
directly or indirectly out of, relating to, or in any other way involving in any
manner whatsoever my employment by or service to the Company or the termination
thereof, including without limitation any and all claims arising under national,
federal, provincial, state, or local laws relating to employment, including
without limitation claims of wrongful discharge, breach of express or implied
contract, fraud, misrepresentation, defamation, intentional infliction of
emotional distress, or liability in tort, and claims of any kind that may be
brought in any court or administrative agency, and any related claims for
attorneys’ fees and costs, including, without limitation, claims under Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000, et seq.;
the Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the
Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil
Rights Act of 1866, and the Civil Rights Act of 1991; 42 U.S.C. Section 1981, et
seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C.
Section 621, et seq. (the “ADEA”); the Equal Pay Act, as amended, 29 U.S.C.
Section 206(d); regulations of the Office of Federal Contract Compliance, 41
C.F.R. Section 60, et seq.; the Family and Medical Leave Act, as amended, 29
U.S.C. § 2601 et seq.; the Fair Labor Standards Act of 1938, as amended, 29
U.S.C. § 201 et seq.; the Employee Retirement Income Security Act, as amended,
29 U.S.C. § 1001 et seq.; and any similar national, provincial, state, or local
laws of the United States, the Republic of Korea or any other jurisdiction. I
agree further that this Release may be pleaded as a full defense to any action,
suit, arbitration, or other proceeding covered by the terms hereof that is or
may be initiated, prosecuted, or maintained by me or my descendants, dependents,
heirs, executors, administrators, or assigns. By signing this Release, I
acknowledge that I intend to waive and release all rights known or unknown that
I may have against the Company Releasees under these and any other laws.

 

74

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

I acknowledge and agree that as of the date I execute this Release, I have no
knowledge of any facts or circumstances that give rise or could give rise to any
claims under any of the laws listed in the preceding paragraph and that I have
not filed any claim against any of the Releasees before any local, state,
federal, or foreign agency, court, arbitrator, mediator, arbitration or
mediation panel, or other body (each individually a ”Proceeding”). I
(i) acknowledge that I will not initiate or cause to be initiated on my behalf
any Proceeding and will not participate in any Proceeding, in each case, except
as required by law; and (ii) waive any right that I may have to benefit in any
manner from any relief (whether monetary or otherwise) arising out of any
Proceeding, including any Proceeding conducted by the Equal Employment
Opportunity Commission (“EEOC”). Further, I understand that, by executing this
Release, I will be limiting the availability of certain remedies that I may have
against the Company and limiting also my ability to pursue certain claims
against the Company Releasees.

By executing this Release, I specifically release all claims relating to my
employment and its termination under ADEA, a federal statute that, among other
things, prohibits discrimination on the basis of age in employment and employee
benefit plans.

Notwithstanding the generality of the foregoing, I do not release (i) claims to
receive payments and benefits under Section 5(b) of the Employment Agreement in
accordance with the terms of the Employment Agreement, (ii) claims for
indemnification arising under any applicable indemnification obligation of the
Company, (iii) any vested rights I may have under any qualified employee benefit
plans, programs or policies of the Company and any of its Affiliates, or
(iv) claims that cannot be waived by law. Further, nothing in this Release shall
prevent me from (a) initiating or causing to be initiated on my behalf any claim
against the Company before any local, state, or federal agency, court, or other
body challenging the validity of the waiver of my claims under the ADEA (but no
other portion of such waiver); or (b) initiating or participating in an
investigation or proceeding conducted by the EEOC.

I understand that nothing in this Agreement will preclude, prohibit or restrict
me from (i) communicating with, any federal, state or local administrative or
regulatory agency or authority, including but not limited to the Securities and
Exchange Commission (the “SEC”); (ii) participating or cooperating in any
investigation conducted by any governmental agency or authority; or (iii) filing
a charge of discrimination with the EEOC or any other federal state or local
administrative agency or regulatory authority.

Nothing in this Agreement, or any other agreement with the Company, prohibits or
is intended in any manner to prohibit, me from (i) reporting a possible
violation of federal or other applicable law or regulation to any governmental
agency or entity, including but not limited to the Department of Justice, the
SEC, the U.S. Congress, and any governmental agency Inspector General, or
(ii) making other disclosures that are protected under whistleblower provisions
of federal law or regulation. This Agreement does not limit my right to receive
an award (including, without limitation, a monetary reward) for information
provided to the SEC. I do not need the prior authorization of anyone at the
Company to make any such reports or disclosures, and I am not required to notify
the Company that I have made such reports or disclosures.

Nothing in this Agreement or any other agreement or policy of the Company is
intended to interfere with or restrain the immunity provided under 18 U.S.C.
§1833(b). I cannot be held

 

75

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

criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that is made (i) (A) in confidence to federal,
state or local government officials, directly or indirectly, or to an attorney,
and (B) for the purpose of reporting or investigating a suspected violation of
law; (ii) in a complaint or other document filed in a lawsuit or other
proceeding, if filed under seal; or (iii) in connection with a lawsuit alleging
retaliation for reporting a suspected violation of law, if filed under seal and
does not disclose the trade secret, except pursuant to a court order.

I acknowledge that I have been given at least [21]/[45]1 days in which to
consider this Release. I acknowledge further that the Company has advised me to
consult with an attorney of my choice before signing this Release, and I have
had sufficient time to consider the terms of this Release. I represent and
acknowledge that if I execute this Release before [21]/[45] days have elapsed, I
do so knowingly, voluntarily, and upon the advice and with the approval of my
legal counsel (if any), and that I voluntarily waive any remaining consideration
period.

I understand that after executing this Release, I have the right to revoke it
within seven days after its execution. I understand that this Release will not
become effective and enforceable unless the seven-day revocation period passes
and I do not revoke the Release in writing. I understand that this Release may
not be revoked after the seven-day revocation period has passed. I understand
also that any revocation of this Release must be made in writing and delivered
to the Company at its principal place of business within the seven-day period.

This Release will become effective, irrevocable, and binding on the eighth day
after its execution, so long as I have not timely revoked it as set forth above.
I understand and acknowledge that I will not be entitled to payments or benefits
under Section 5(b) of the Employment Agreement unless this Release is effective
on or before the date that is 60 days following the Date of Termination (as
defined in the Employment Agreement).

I hereby agree to waive any and all claims to re-employment with the Company or
any of its affiliates and affirmatively agree not to seek further employment
with the Company or any of its affiliates.

The provisions of this Release will be binding upon my heirs, executors,
administrators, legal representatives, and assigns. If any provision of this
Release will be held by any court of competent jurisdiction to be illegal, void,
or unenforceable, such provision will be of no force or effect. The illegality
or unenforceability of such provision, however, will have no effect upon and
will not impair the enforceability of any other provision of this Release.

This Release will be governed in accordance with the laws of the State of
Delaware, without reference to the principles of conflicts of law. Any dispute
or claim arising out of or relating to this Release or claim of breach hereof
will be brought exclusively in the United States District Court for the District
of Delaware to the extent that federal jurisdiction exists, and in the Delaware
Chancery Court to the extent that federal jurisdiction does not exist. By
execution of

 

1  NTD: To be selected based on whether applicable termination was “in
connection with an exit incentive or other employment termination program” (as
such phrase is defined in the Age Discrimination in Employment Act of 1967).

 

76

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

this Release, I am waiving any right to trial by jury in connection with any
suit, action, or proceeding under or in connection with this Release.

 

 

Young Joon Kim

 

Date

 

77