Exhibit 10.1


 


GSI TECHNOLOGY, INC.


2021 VARIABLE COMPENSATION PLAN


(Effective as of April 1, 2020)


 


1.          
Introduction. The Company hereby adopts the Plan, effective as of April 1, 2020. The purpose of the Plan is to encourage
performance and achieve retention of a select group of executive employees of GSI Technology, Inc. This document constitutes the
written instrument under which the Plan is maintained.


 


2.          
Definitions.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Operating Income” means the
Company’s operating income for fiscal 2021, excluding (1) share based compensation, (2) acquisition-related costs and/or
the impact of any completed acquisition, (3) patent/IP related litigation costs, (4) purchased intellectual property and (5) any
adjustments as deemed necessary by the Committee for 2021.


 


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


 


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


 


“Plan” means the GSI Technology,
Inc. 2021 Variable Compensation Plan, as set forth in this document and as hereafter amended.


 


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


 


3.         
Variable Compensation Award.


 


(a)           
Variable Compensation Award and Calculation of Payable Amount. Each Participant will receive an award, entitling the Participant
to earn variable compensation, the payment of which will be based upon (i) the achievement of performance criteria based on Associative
Processing Unit (APU) milestones, operating income and net revenues determined in accordance with US GAAP, or a combination of
the three, and (ii) continued employment by the Participant through the vesting dates set forth in Section 4 hereof (the
 “Variable Compensation Award”). The Committee shall designate in writing the amount payable under the Variable Compensation
Award and, if applicable, the percentage of the amount payable under the Variable Compensation Award that is allocable to each
of the criteria. Notwithstanding the foregoing, the maximum amount payable under a Variable Compensation Award granted to any Participant
shall not exceed two times the Participant’s target Variable Compensation Award for 2021, unless the Committee, in its sole
discretion, decides to permit a greater amount with respect to such Participant based on the performance and condition of the Company’s
business. Also, at any time prior to April 1, 2021, the Committee or the CEO, in his, her, or its sole discretion, may reduce the
amount payable under any Participant’s Variable Compensation Award. The amount of the Variable Compensation Award that may
become payable to the extent it becomes vested in accordance with the schedule set forth in Section 4 hereof shall be calculated
as soon as reasonably practicable following April 1, 2021 based on the extent to which the performance criteria set forth in this
Section 3(a) have been achieved (the “Award Payment Amount”).


 






    


     


    

 


4.         
Payment of Variable Compensation Award.


 


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


 


(i)         
Sixty percent (60%) of the Participant’s Award Payment Amount shall vest and be payable to the Participant on the
last business day in April 2021; and


 


(ii)       
Twenty percent (20%) of the Participant’s Award Payment Amount (i.e. fifty percent (50%) of the Award Payment Amount
then remaining) shall vest and be payable to the Participant on the last business day in April 2022; and


 


(iii)      
Twenty percent (20%) of the Participant’s Award Payment Amount (i.e. one-hundred percent (100%) of the Award Payment
Amount then remaining) shall vest and be payable to the Participant on the last business day in April 2023.


 


(b)           
Distribution in the Event of Retirement, Termination as a result of Disability or without Cause. If a Participant terminates
employment because of Retirement or Disability, or the Company terminates a Participant’s employment without Cause, the Participant
shall be entitled to payment of all of his or her Award Payment Amount according to the schedule in Section 4(a), provided
that if termination under these conditions occurs prior to April 1, 2021, the amount of the Variable Compensation Award payable
will be the Award Payment Amount calculated pursuant to Section 3(a), multiplied by the number of days employee was employed in
Fiscal 2021 by the Company and then divided by 365 days, and all remaining amounts payable under Variable Compensation Award for
2021 shall be forfeited.


 


(c)           
Forfeiture. If the Company terminates a Participant’s employment for Cause or if the Participant’s employment
is terminated for any reason other than as a result of Retirement or Disability, he or she shall forfeit all or any portion of
his or her entire Award Payment Amount for 2021 (as set forth in Section 3(a)) which is not yet vested and payable under the schedule
set forth in Section 4(a) as of the date of termination.


 


(d)          
Timing of Distribution to a Beneficiary. If a Participant dies while still employed by the Company or after termination
due to Retirement, Disability, or termination by the Company without Cause but before receiving a distribution of all of his or
her Award Payment Amount according to the schedule in Section 4(a), then the vesting of the Participant’s Award Payment Amount
shall be fully accelerated such that one-hundred percent (100%) of the Award Payment Amount, as calculated pursuant to Section
4(b) hereof (with the amount prorated to the date of death in the event death occurs prior to April 1, 2021), will be distributed
to his or her beneficiary as a lump sum distribution on the April 30 following the Participant’s death.


 






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


 


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


 


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


 


7.         
Amendment or Termination. Through March 31, 2021, the Committee, in its sole and unlimited discretion, may amend or terminate
the Plan at any time, without prior notice to any Participant. After April 1, 2021, the Committee may amend or terminate the Plan
provided that any such amendment does not reduce or increase any benefit to which a Participant has accrued and is otherwise entitled
to under the terms of the Plan, nor accelerate the timing of any payment under the Plan. Notwithstanding the foregoing to the contrary,
the Company reserves the right to the extent it deems necessary or advisable, in its sole discretion, to unilaterally alter or
modify the Plan and any Variable Compensation Awards made thereunder to ensure that the Plan and Variable Compensation Awards provided
to Participants who are U.S. taxpayers are made in such a manner that either qualify for exemption from or comply with Code Section
409A; provided, however, that the Company makes no representations that the Plan or any Variable Compensation Awards made thereunder
will be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to the
Plan or any Variable Compensation Awards made thereunder. The Plan shall automatically terminate on the date when no Participant
(or beneficiary) has any right to or expectation of payment of further benefits under the Plan.


 


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


 


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


 


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


 


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


 


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


 


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


 






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


 


GSI TECHNOLOGY, INC.


 


 


	/s/ Lee-Lean Shu	 
	Name: Lee-Lean Shu	 
	Title: Chief Executive Officer	 
	 	 
	Date: 	June 1, 2020	 




 






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