Exhibit 10.1

INVENSENSE, INC.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is hereby entered into effective as
of October 23, 2012 (the “Effective Date”), by and between INVENSENSE, INC., a
Delaware corporation (the “Company”), and Behrooz Abdi (“Employee”)
(collectively the “Parties”).

AGREEMENT

The Company wishes to employ Employee as the President and Chief Executive
Officer of the Company and Employee wishes to be employed by the Company as the
President and Chief Executive Officer of the Company. In consideration of these
premises and for other good and valid consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

1. Term of Employment. As used herein, the phrase the employment term (the
“Employment Term”) refers to the entire period of employment of Employee by the
Company hereunder, commencing on the date on which Employee commences service to
the Company hereunder (the “Employment Start Date”).

2. Duties and Obligations of Employee.

(a) General Duties. Employee shall serve as the President and Chief Executive
Officer (“CEO”) of the Company and will report to the Board of Directors (the
“Board”). In his capacity as President and CEO, Employee shall do and perform
all services, acts or things necessary or advisable as the President and Chief
Executive Officer of the Company, subject at all times to policies established
by the Board.

(b) Devotion to Company’s Business. Employee shall devote his entire productive
time, ability and attention to the business of the Company during the Employment
Term. Employee shall not engage in any other duties or other pursuits, or
directly or indirectly render material services of a business, commercial or
professional nature to any other person or organization, whether for
compensation or otherwise, without the consent of the Board. The expenditure of
reasonable amounts of time for educational, charitable or professional
activities, for service on the boards of directors of Tabula, Inc. and Exar
Corporation, and to provide limited advisory services to private companies in
which Employee is an investor as of the date of this Agreement and which have
been previously disclosed to the Board shall not be deemed a breach of this
Agreement if those activities do not materially interfere with the services
required under this Agreement. Employee shall obtain the prior approval of the
Compensation Committee of the Board before making any investment in a privately
held company greater than $50,000 or taking on any advisory role for such
company.

 

INVENSENSE CORPORATION

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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(c) Confidentiality.

(i) Employee will sign the Company’s standard Employee Proprietary Information
Agreement in the form attached as Exhibit A.

(ii) The Employee must establish his identity and authorization to work as
required by the immigration reform and control act of 1986 (IRCA).

3. Obligations of Company.

(a) General Description. The Company shall provide Employee with the
compensation, incentives, benefits and business expense reimbursement specified
elsewhere in this Agreement.

(b) Office and Staff. The Company shall provide Employee with a private office,
office equipment, supplies and other facilities and services, suitable to
Employee’s position and adequate for the performance of his duties.

4. Compensation and Rights of CEO.

(a) Base Salary. As compensation for the services to be performed hereunder,
Employee shall receive an annual base salary of four hundred thousand dollars
($400,000), less applicable withholdings, payable periodically during the
Employment Term in accordance with the Company’s standard payroll practices for
U.S. employees. Employee’s annual base salary may be increased from time to time
by the Board in its sole discretion. Employee’s annual base salary, including
any increases to such salary, shall be referred to in this Agreement as the
“Base Salary.”

(b) Other Compensation. In addition to the Base Salary, Employee’s compensation
shall consist of the opportunity to receive certain other compensation, as
follows

(i) The Company has established an executive bonus plan for fiscal 2013, which
pays a bonus to executives based upon the Company’s performance against certain
targets as of the end of fiscal 2013 and which is payable within four (4) weeks
of the commencement of fiscal 2014. Employee’s target bonus for fiscal 2013
under the executive bonus plan shall be one hundred thousand dollars ($100,000),
which bonus shall be paid (but not adjusted) if any bonuses are paid to
executives under the bonus plan. Employee must be employed by the Company in
good standing on the date of the distribution from the bonus plan in order to
receive the distribution, regardless of the time period to which the
distribution relates. The target bonus for Employee for future fiscal years
shall be established by the Board in consultation with Employee in connection
with the development of a bonus plan for Company executives for such fiscal
years.

(ii) In the event that the Board hereafter establishes any other bonus or
similar plan for executive officers of the Company, the Board shall include
Employee as a participant in and beneficiary of such plan

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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(iii) In addition to the Stock Grant described in Section 5 below, Employee
shall be entitled to periodic stock or option grants as may be approved by the
Board in its sole discretion.

(c) Tax Withholding. The Company shall have the right to deduct or withhold from
the Base Salary and other compensation due to Employee hereunder any and all
sums required for federal income and Social Security taxes and all state or
local taxes now applicable or that may be enacted and become applicable in the
future.

5. Equity. As further compensation for the services to be performed hereunder,
Employee shall be awarded certain rights to purchase or receive shares of the
Company’s Common Stock as follows:

 

  (i)

Stock Option. On the Employment Start Date, the Company will grant Employee an
option (“Option”) to purchase eight hundred twenty nine thousand five hundred
forty (829,540) shares of Common Stock in accordance with the terms of the
Company’s stock incentive plan and its standard option agreement, which shall
vest in accordance with the terms and conditions outlined in the plan and
agreement, and otherwise as described in this Agreement. The Option shall be
exercisable at the fair market value of the Common Stock on the Employment Start
Date and shall have a term of ten years. The shares subject to the Option
(“Shares”) shall vest ratably over the four (4) year period commencing on the
Employment Start Date (“Vesting Start Date”) as follows: 25% upon the 12 month
anniversary of the Vesting Start Date, and at a rate of 1/48 of the number of
shares initially subject to the Option for each full calendar month thereafter
(such that 100% of the Shares shall be vested as of the fourth anniversary of
the Vesting Start Date), provided that Employee is employed by the Company on
each such vesting date, subject to acceleration as provided in the Executive
Change in Control and Severance Agreement referred to in Section 8 below or as
otherwise provided in the option agreement.

 

  (ii) Performance Stock Option. On the Employment Start Date, the Company will
grant Employee an option (“Performance Option”) to purchase six hundred twenty
two thousand, one hundred fifteen (622,115) shares of Common Stock in accordance
with the terms of the Company’s stock incentive plan and its standard option
agreement, which shall vest in accordance with the terms and conditions outlined
in the plan and agreement, and otherwise as described in this Agreement. The
Performance Option shall be exercisable at the fair market value of the Common
Stock on the Employment Start Date and shall have a term of ten years. Shares
subject to the Performance Option shall commence vesting upon the closing price
of the Company’s common stock on the New York Stock Exchange (or whatever
national securities exchange or national automated quotation system on which the
common stock is traded) equaling or exceeding, for a period of twenty
(20) trading days, the prices indicated (adjusted for any stock splits or
similar transactions):

 

Closing Price of    Shares Commencing to Vest  

$15.00 or higher

     207,385   

$17.50 or higher

     207,385   

$20.00 or higher

     207,385   

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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The date on which such sustained closing price target is reached shall be
referred to as the Second Option Vesting Start Date for the shares which
commence vesting as a result. At such time as any shares subject to the
Performance Option shall commence vesting, they shall vest ratably over four
years at the rate of 1/48 of the number of such shares for each full calendar
month thereafter (such that 100% of the Shares shall be vested as of the first
anniversary of the relevant Second Option Vesting Start Date), subject to
acceleration as provided in the Executive Change in Control and Severance
Agreement referred to in Section 8 below or as otherwise provided in the option
agreement.

In the event of a Change in Control (as defined in the Executive Change in
Control and Severance Agreement referred to in Section 8 below), the above
closing price targets (if not previously achieved) will be evaluated against the
Change in Control deal price, and to the extent the deal price is equal to or
greater than one or more closing price targets, those closing price targets
shall be deemed achieved.

 

  (iii) Restricted Stock. On the Employment Start Date, the Company will grant
Employee four hundred fourteen thousand seven hundred seventy (414,770) shares
of restricted Common Stock in accordance with the terms of the Company’s stock
incentive plan, which shall vest in accordance with the terms and conditions
outlined in the plan, and otherwise as described in this Agreement (the
“Restricted Stock”). The Restricted Stock shall be vest ratably over the four
(4) year period commencing on the first day of the Employment Term (“Vesting
Start Date”) as follows: 25% upon the 12 month anniversary of the Vesting Start
Date, and at a rate of 1/48 of the number of shares of restricted Common Stock
initially granted each full calendar month thereafter (such that 100% of the
Shares shall be vested as of the fourth anniversary of the Vesting Start Date),
provided that Employee is employed by the Company on each such vesting date,
subject to acceleration as provided in the Executive Change in Control and
Severance Agreement referred to in Section 8 below or as otherwise provided in
the restricted stock bonus agreement pursuant to which the restricted Common
Stock is granted. If elected by Executive, the Company shall withhold shares
sufficient to cover the minimum statutory withholding taxes due in connection
with the grant or vesting of the Restricted Stock.

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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  (iv) Existing Director Options. Employee was previously granted an option to
purchase 90,000 shares of common stock of the Company at an exercise price of
$7.32 per share on July 9, 2011 in connection with Employee’s commencement of
service as a member of the Board of Directors of the Company (the “First
Director Option”). The First Director Option vested at the rate of 1/48th of
such shares for each month of service as a member of the Board. Employee was
previously granted an option to purchase 20,000 shares of common stock of the
Company at an exercise price of $10.18 per share on July 9, 2012 pursuant to the
Company’s policies for compensation of non-employee members of the Board of
Directors (the “Second Director Option”). The Second Director Option was to
commence vesting at such time as the First Director Option is fully vested.

The Company and Employee agree that Employee is currently vested in options to
purchase 28,125 shares of Company common stock under the First Director Option
(the “Vested Director Options”), and options to purchase 0 shares of Company
common stock under the Second Director Option. Employee agrees that, in
consideration for the Company’s entering into this Agreement, no additional
options shall vest under either the First Director Option or the Second Director
Option. Company agrees that the Vested Director Options shall remain exercisable
during the term of Employee’s service with the Company and for a period of time
following any termination of Employee’s service with the Company that is
identical to shorter of (x) the period of time Employee shall have to exercise
the Option (as defined in Section 5(i) above) pursuant to the Executive Change
in Control and Severance Agreement referred to in Section 8 hereof and (y) the
expiration of the original term of the Vested Director Options.

6. Benefits.

(a) Annual Vacation. Employee shall be entitled to vacation time each calendar
year, with full pay, in accordance with the Company’s standard policy.

(b) Illness. Employee shall be entitled to sick leave with full pay in
accordance with the Company’s standard policy.

(c) Participation in 401(k) Savings Plan. Employee shall be eligible to
participate in the Company’s 401(k) Savings Plan, on the same terms and
conditions as all other similarly situated employees or where appropriate as
determined by the CEO in its sole discretion.

(d) Medical, Dental, Disability; Life Insurance. The Company agrees to include
Employee and Employee’s spouse and children, as appropriate and to the extent
available, in the coverage of its medical, dental, disability, life, and
Director and Officer Liability insurance policies in accordance with Company
policies.

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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7. Reimbursement of Business Expenses.

(a) The Company shall promptly reimburse Employee for all reasonable business
expenses incurred by Employee in connection with the business of the Company,
all in accordance with the policies and procedures of the Company.

8. Termination of Employment; Executive Change in Control and Severance
Agreement.

This Agreement shall be terminable at the will of the Company. Termination shall
be effective upon such notice or as otherwise provided and no amounts shall be
payable in connection therewith except amounts legally required to be paid, such
as accrued but as yet unpaid compensation or accrued vacation, or as provided in
accordance with the terms of the Executive Change in Control and Severance
Agreement which is being executed by Executive and the Company at the same time
as this Agreement is being signed. The Agreement shall also terminate upon
Employee’s death or Disability (as defined in the Executive Change in Control
and Severance Agreement). Upon termination, all rights, duties and obligations
under this Agreement shall cease, except those set forth in Sections 2(c), 7(a),
8 and 9.

9. General Provisions.

(a) Notices. All notices, requests, demands and other communications required or
permitted to be given to a Party pursuant to the provisions of this Agreement
shall be in writing and shall be effective and deemed given to such party under
this Agreement on the earliest of the following: (a) the date of personal
delivery; (b) two (2) business days after transmission by facsimile, addressed
to the other Party at its facsimile number, with confirmation of transmission;
(c) three (3) business days after deposit with a nationally recognized overnight
delivery courier for United States deliveries, marked for next-day delivery; and
(d) five (5) business days after deposit in the United States mail by registered
or certified mail (return receipt requested) for United States deliveries. All
notices not delivered personally or by facsimile will be sent by certified first
class mail, postage prepaid, return receipt requested, in any such case as
follows (or to such other address as a Party may have advised the other Party by
ten (10) days advance written notice in the manner provided in this
Section 9(a)):

If to the Company:

Invensense Inc.

1197 Borregas Avenue

Sunnyvale, CA 94089

Attn: Chief Financial Officer

Telephone: 408 988 7339

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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If to Employee:

Behrooz Abdi

[address]

Telephone:                     

(b) Entire Agreement. This Agreement, together with the Executive Change in
Control and Severance Agreement and the form of confidential information
agreement and the standard forms of equity award agreements that describe
Executive’s equity awards (other than as such equity award agreements have been
revised pursuant to this Agreement), contains the entire agreement and
understanding concerning the subject matter hereof between the Parties and
supersedes and replaces all prior negotiations and proposed agreements, written
and oral. Employee acknowledges that no other party, or any agent or attorney of
any other party has made any promise, representation or warranty whatsoever,
express or implied, not contained herein, concerning the subject matter hereof,
to induce him to execute this Agreement or the Executive Change in Control and
Severance Agreement, and Employee acknowledges that he has not executed either
Agreement in reliance upon any such promise, representation or warranty not
contained herein or therein.

(c) Modifications. Any modification of this Agreement shall only be effective if
it is in writing and signed by the Party to be charged.

(d) Effect of Waiver. The failure of any Party to insist on strict compliance
with any of the terms, covenants or conditions of the Agreement by any other
Party shall not be deemed a waiver of that term, covenant or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.

(e) Partial Invalidity. If any provision of this Agreement is held to be invalid
or unenforceable under a given circumstance, then the remaining provisions shall
remain, nevertheless, in full force and effect under such circumstance. The
Parties agree to renegotiate in good faith the term held invalid or
unenforceable and to be bound by the mutually agreed substitute provision under
such circumstances in order to give the most approximate effect intended by the
Parties.

(f) Governing Law. This Agreement shall be governed by, interpreted under,
construed and enforced in accordance with the laws of the State of California,
excluding any choice of law principles which could cause the law of any other
jurisdiction to be applied.

(g) Attorneys’ Fees. The Company shall reimburse Executive for the reasonable,
documented attorneys’ fees incurred by Executive in connection with the
drafting, negotiation and execution of this Agreement and any related documents
in an amount not to exceed [$7,500].

(h) Counterparts; facsimile signatures. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument. This Agreement may also
be executed and delivered by

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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facsimile and, upon such delivery, the facsimile will be deemed to have the same
effect as if the original signature had been delivered to the other Party. The
Parties agree to exchange original signatures, but the failure to deliver the
original signature copy and/or the nonreceipt of the original signature copy
shall have no effect upon the binding and enforceable nature of this Agreement.

(i) Indemnification and Insurance. The Company shall indemnify Executive to the
full extent provided for in its corporate Bylaws and to the maximum extent that
the Company indemnifies any of its other directors and senior executive
officers, and he will be entitled to the protection of any insurance policies
the Company may elect to maintain generally for the benefit of its directors and
senior executive officers against all costs, charges, liabilities 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 affiliates or his
serving or having served any other enterprise, plan or trust as a director,
officer, employee or fiduciary at the request of the Company or any of its
affiliates (other than any dispute, claim or controversy arising under or
relating to this Agreement (except for this Section 9(i))). The Company will
enter into an indemnification agreement with the Executive in the standard form
that it has or will adopt for the benefit of its other directors and senior
executive officers. The provisions of this Section 9(i) shall survive any
termination of the Executive’s employment or any termination of this Agreement.

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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AUTHORIZED SIGNATURES

For the purpose of binding the Parties to the above Agreement, the Parties or
their duly authorized representatives have signed their names below, effective
as of the Effective Date.

 

COMPANY:

 

INVENSENSE INC.

 

By  

/s/ Amit Shah

  Amit Shah, Director EMPLOYEE:

/s/ Behrooz Abdi      Behrooz Abdi

 

INVENSENSE, INC.

EMPLOYMENT AGREEMENT WITH BEHROOZ ABDI

 

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