Exhibit 10.13


 


Monolithic System Technology, Inc.


755 N. Matilda Avenue


Suite 100


Sunnyvale, California  94085


 


 


July 18, 2005


 


Mr. Chester J. Silvestri


[ADDRESS]


 


Dear Chet:


 


Monolithic System Technology, Inc. (the “Company”)
is pleased to offer you the position of Chief Executive Officer.  This offer letter generally sets forth the
terms and conditions of the Company’s offer of employment.  This offer letter is intended to be a binding
agreement, and if the terms contained in this offer letter are acceptable to
you, please acknowledge your acceptance by signing in the signature block,
below.  The Company’s offer of employment
is conditioned upon: (1) your presenting evidence of your authorization to
work in the United States and your identity sufficient to allow the Company to
complete the I-9 form required by law within three business days of the
commencement of your employment with the Company; (2) your consent to, and
satisfactory completion of, a background check; (3) your completion of the
Company’s standard Directors and Officers Questionnaire and the Company’s
satisfactory review of your responses; and (4) ratification of this offer
by the Company’s board of directors (the “Board”).


 


As Chief Executive Officer, you will report
directly to the Board.  You agree to
perform the duties set forth in this letter, as well as any other reasonable
duties determined by the Board.  Our
mutual expectations regarding the primary duties of this position are as
follows: (1) all duties, authorities and responsibilities customary for a
chief executive officer of a public company, including executive responsibility
for developing strategic direction and all operational activities of the
Company, (2) ultimate management responsibility for all employees of the
Company, and (3) preparation and submission of an operating plan to the
Board on a quarterly basis, which shall serve to provide the scope of
operational authority.  Upon your
commencement of employment as Chief Executive Officer you will also be
appointed to the Board. 


 


Your starting salary will be $11,458
bi-monthly ($275,000 on an annualized basis). 
Your base salary will be paid in accordance with the Company’s normal
payroll procedures and will be subject to applicable withholding required by
law.  You will be eligible to receive a
discretionary bonus based on the performance of the Company compared to
performance objectives, to be determined by the Board in its sole
discretion.  You also will be eligible to
participate in the Company’s Executive Bonus Plan, with an annual bonus equal
to up to 50% of your base salary upon achievement of stated objectives, as
determined by the Board of Directors in its sole discretion.


 


In addition, you will be granted options to
purchase 750,000 shares of the Company’s common stock (the “Option”) under the
Company’s Amended and Restated 2000 Stock Option and Equity Incentive Plan,
subject to approval by the Compensation Committee of the Board and your
execution of the Company’s standard form of Stock Option Agreement.  We intend that the Option will be granted at
the first meeting of the Board, or its Compensation Committee, following your
first day of employment, with an exercise price equal to the closing price of a
share of common stock on the Nasdaq National Market on that date.  The Option will have a four-year vesting
schedule, such that 25% of the total number of shares subject to the Option
will vest on the first anniversary of your employment with the Company and 1/48
of the shares subject to the Option will vest at the end of each successive
calendar month thereafter, subject in all events to your continued service with
the Company.


 


Upon the commencement of your employment, the
Company will enter into a Change-in-Control Agreement with you, a copy of which
is attached for your reference.


 





















 


You also will be eligible to participate in
the Company’s employee benefit
plans, including our standard major medical, dental, life, short and long term
disability, vision insurance benefits, our flexible benefit plan, paid
holidays, personal time off (PTO) and the Company’s 401(k) plan.  You will be reimbursed on a regular basis for
reasonable, necessary and properly documented business and travel expenses
incurred for the purpose of conducting the Company’s business.


 


You should be aware that your employment with
the Company is for no specified period and constitutes at-will employment.  As a result, you are free to resign at any
time, for any reason or for no reason. 
Similarly, the Company is free to conclude its employment relationship
with you at any time, with or without cause.


 


In the event of any dispute or claim relating
to or arising out of our employment relationship, you and the Company agree
that all such disputes shall be fully and finally resolved by binding
arbitration as provided in the Mutual Agreement to Arbitrate, a copy of which
is attached for your reference.  You
agree to execute and deliver the Mutual Agreement to Arbitrate and the Company’s
standard form of Employment Confidential Information and Invention Assignment
Agreement (“Proprietary Rights Agreement”) in connection with your acceptance
of this offer letter.


 


To indicate your acceptance of the Company’s
offer, please sign and date this letter agreement in the space provided below
and return it to me.  This offer will
expire on Friday, July 22, 2005 at 5:00 p.m.


 


This letter agreement, along with the Stock
Option Agreement, Change-in-Control Agreement, Mutual Agreement to Arbitrate
and Proprietary Rights Agreement between you and the Company, together with the
Company’s standard employment policies and procedures in effect from time to
time constitute the entire terms of your employment with the Company and
supersede all prior representations or agreements, whether written or
oral.  This letter agreement is to be
governed by California law.  To the
extent that any of the terms of this offer letter agreement or any of the
foregoing agreements conflict with the Company’s standard employment policies
and procedures in effect from time to time, the former shall govern.  This letter may not be modified or amended
except by a written agreement signed by the Chairman of the Compensation
Committee of the Board and by you.


 


If you have any questions, please feel free
to call Mark Voll, at 408-731-1800, or Jim Kupec, at 408-205-7199.  We look forward to your favorable reply and
to a productive and exciting working relationship.


 


 


Sincerely,


 


 


	
  Mark Voll

  	
  Jim Kupec

  
	
  Chief Financial Officer and Interim

  	
  Chairman, Compensation Committee

  
	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  
	
  July 21, 2005.

  	
   

  
	
   

  	
   

  
	
  Chester Silvestri

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
			



 





















 


MUTUAL AGREEMENT TO ARBITRATE CLAIMS


 


I recognize that differences may arise
between Monolithic System Technology, Inc. (“the Company”) and me during
or following my employment with the Company, and that those differences may or
may not be related to my employment.  I
understand and agree that by entering into this Mutual Agreement to Arbitrate
Claims (“Agreement”), I anticipate gaining the benefits of a speedy, impartial,
final and binding dispute-resolution procedure. 
The promises by the Company and by me to arbitrate differences, rather
than litigate them before courts or other bodies, provide consideration for
each other.  I understand and agree that
the Company is engaged in transactions involving interstate commerce.  Except as provided in this Agreement, the
Federal Arbitration Act shall govern the interpretation, enforcement and all
proceedings pursuant to this Agreement. 
To the extent that the Federal Arbitration Act is inapplicable, or held
not to require arbitration of a particular claim or claims, state law
pertaining to agreements to arbitrate shall apply.


 


The Company and I mutually consent to the
resolution by arbitration of all claims or controversies (“claims”), past,
present or future, whether or not arising out of my employment (or its
termination), that the Company may have against me or that I may have against
any of the following (1) the Company, (2) its officers, directors,
employees or agents in their capacity as such or otherwise, (3) the
Company’s parent, subsidiary and affiliated entities, (4) the Company’s
benefit plans or the plans’ sponsors, fiduciaries, administrators, affiliates
and agents, and/or (5) all successors and assigns of any of them.


 


Claims Not Covered by the Agreement


 


Claims for workers’ compensation or
unemployment compensation benefits are not covered by this Agreement.  Also not covered are claims by the Company or
by me for temporary restraining orders or preliminary injunctions (“temporary
equitable relief”) in cases in which such temporary equitable relief would be
otherwise authorized by law.  Such resort
to temporary equitable relief shall be pending and in aid of arbitration only,
and in such cases the trial on the merits of the action will occur in front of,
and will be decided by, the Arbitrator, who will have the same ability to order
legal or equitable remedies as could a court of general jurisdiction.


 


Arbitration Procedures


 


The arbitration will be held under the
auspices of a sponsoring organization, either the American Arbitration
Association (“AAA”) or Judicial Arbitration & Mediation Services (“J·A·M·S”),
with the designation of the sponsoring organization to be made by the party who
did not initiate the claim.  The Company
and I agree that, except as provided in this Agreement, the arbitration shall
be in accordance with the sponsoring organization’s then-current employment
arbitration rules/procedures.  


 


Judicial Review


 


Either party may bring an action in any court
of competent jurisdiction to compel arbitration under this Agreement, to
enforce an arbitration award and/or to appeal an arbitration award.


 


Sole and Entire Agreement


 


This is the complete agreement of the parties
on the subject of arbitration of disputes (except for any arbitration agreement
in connection with any pension or benefit plan).  This Agreement supersedes any prior or
contemporaneous oral or written understandings on the subject.  No party is relying on any representations,
oral or written, on the subject of the effect, enforceability or meaning of
this Agreement, except as specifically set forth in this Agreement.  This Agreement to arbitrate shall survive the
termination of my employment and the expiration of any benefit plan.  


 


Construction


 


If any provision of this Agreement is
adjudged to be void or otherwise unenforceable, in whole or in part, such
adjudication shall not affect the validity of the remainder of the
Agreement.  All other provisions shall
remain in full force and effect.


 





















 


Voluntary Agreement


 


I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS
AGREEMENT, THAT I UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS
BETWEEN THE COMPANY AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT
ARE CONTAINED IN IT, AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND
NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN
THOSE CONTAINED IN THIS AGREEMENT ITSELF.  
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO A
JURY TRIAL.


 


	
  Employee initials:

  	
   

  	
   

  



 


I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE
OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE
AVAILED MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.


 


 


	
  Employee (Chester J. Silversti):

  	
   

  	
  Monolithic System Technology, Inc. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature of Chester J. Silversti

  	
   

  	
  Signature of Authorized Monolithic System Technology,

  Inc. Representative

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chester J. Silversti

  	
   

  	
   

  	
  Title of Representative

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  Date