(e) **Relocation**.               (i) On or prior to November 1, 2008, Employee shall relocate from Heilbronn, Germany to hisformer residence in Kirkland, Washington (the “Relocation”) and shall work from home or atEmployer’s headquarters in San Jose, California as directed by the CEO of Employer.               (ii) Employer shall provide Employee the “relocation package” specified in the letteragreement between Employer and Employee dated July 17, 2007 and attached as Exhibit A (“LetterAgreement”). Notwithstanding the foregoing, Employer shall have no obligation to provide saidrelocation package if Employed resigns on or prior to the Relocation or if Employer terminatesEmployee for Cause prior to the Relocation.               (iii) As of the earlier of (A) the date of the Relocation, and (B) November 1, 2008, thefollowing benefits set forth in the Letter Agreement shall cease: payment of housing costs, companycar, and round trip tickets from Germany to the U.S. for Employee’s spouse (other than for theRelocation). In addition, the commitment in the Letter Agreement to endeavor to find Employee acomparable position at the end of his international assignment is superseded by the provisions ofthis Agreement.          (f) **Tax Equalization**. Provided that Employer does not terminate Employee for Cause and thatEmployee does not resign prior to the Employment Resignation Date, Employer shall provide Employeethe professional tax advice and tax equalization described in the Letter Agreement for tax year2008. Employer shall have no obligation to provide such tax advice or equalization for tax year2009, unless and to the extent that Employer’s payment of taxes to Germany results in income toEmployee for tax year 2009 that is taxable in Germany.          (g) **Termination**. Without prior notice, and without further liability or obligation (except asexplicitly provided in this Agreement), Employer may terminate Employee’s employment at any timeduring the Continuation Period for Cause. If Employer terminates Employee for Cause, Employer (A)shall have no obligation to compensate Employee for the balance of the Continuation Period nor topay any bonus; and (B) shall have no obligation to provide Employee any benefits for the balance ofthe Continuation Period (including without limitation any benefits under the Letter Agreement),except those required by COBRA, the premiums which shall be paid by Employee. Termination shall befor “Cause” if Employee: (i) acts in bad faith and to the detriment of Employer; (ii) violates, orhas violated during the twelve (12) month period prior to the Effective Date, Employer’s Standardsof Business Conduct or Employee’s fiduciary obligations to Employer; (iii) willfully refuses to actin accordance with any specific direction of Employer; (iv) exhibits in regard to his employmentmaterially unsatisfactory performance, misconduct, or dishonesty; or (v) breaches any material termof this Agreement, including without limitation the non-disparagement provisions of section 3(e).     **2. Other Employer Obligations**          (a) **Termination Pay**. On the Termination Date, as defined below, Employer shall pay Employeeat Employee’s base rate of pay for all earned but unpaid salary and all earned
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but untaken vacation through such date, less withholdings required by law. “Termination Date”means the earliest of (i) the Employment Resignation Date, (ii) the date on which Employerterminates Employee’s employment with or without Cause, and (iii) the date on which Employeeresigns his employment if prior to the Employment Resignation Date.          (b) **COBRA**. Following the Termination Date, Employer shall provide Employee COBRA benefits asrequired by law, with Employee to pay the COBRA premiums, except as provided in section 1(g)(ii).          (c) **Benefit Plans**. Employer shall provide Employee the benefits to which he is entitled underhis 401(k) plan, the Atmel Corporation Deferred Compensation Plan, and the Employer’s EmployeeStock Purchase Plan in accordance with the respective plans.          (d) **Stock Options**.               (i) Employee shall not be eligible for any additional grants of stock options during theContinuation Period.               (ii) If Employee remains employed through the Employment Resignation Date, existing unvestedstock options held by Employee as of the Effective Date (“Unvested Options”) shall continue to vestin accordance with the terms of the applicable stock option grant and applicable stock option planthrough the Employment Resignation Date, and the CEO of Employer shall request that Employer’sBoard of Directors approve that Employee may exercise any stock options vested but not exercised asof the Employment Resignation Date through September 30, 2009. Any vested options which were thesubject of Employee’s Section 409A Stock Option Fixed Date Exercise Election Form dated December27, 2006 that would otherwise be exercisable only after September 30, 2009 will be exercisableprior to September 30, 2009 in connection with Employee’s separation from service, subject to theterms of such Election Form and applicable law.               (iii) If, prior to the Employment Resignation Date, Employee is terminated with Cause orresigns, Unvested Options shall continue to vest only through the Termination Date and Employee mayexercise any stock options vested but not exercised as of the Termination Date only as provided bythe applicable stock option agreement.               (iv) If, prior to the Employment Resignation Date, Employee is terminated without Cause, theCEO of Employer shall request that Employer’s Board of Directors approve (A) that all of Employee’sunvested stock options as of the Termination Date that would have vested but for the termination onor prior to the Employment Resignation Date vest as of the Termination Date, and (B) that Employeemay exercise any stock options vested but not exercised as of the Termination Date throughSeptember 30, 2009.     3. **Other Employee Obligations**.          (a) **Resignation**. Employee hereby (i) confirms his resignation from his Prior Position andfrom all officer and director positions with Employer or any Affiliate as of the PositionResignation Date and (ii) resigns his employment with Employer and any Affiliate effective as ofthe Employment Resignation Date. Employer hereby accepts Employee’s resignation on its own behalf
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and on behalf of any Affiliate. “Affiliate” means any entity that directly or indirectlycontrols, is controlled by, or is under common control with Employer. If Employee terminates hisemployment with Employer prior to the Employment Resignation Date, Employer (A) shall have noobligation to compensate Employee for the balance of the Continuation Period nor to pay any bonus;and (B) shall have no obligation to provide Employee any benefits for the balance of theContinuation Period (including without limitation any benefits under the Letter Agreement), exceptthose required by COBRA, the premiums for which shall be paid by Employee.          (b) **Cooperation**. Employee shall cooperate with Employer in (i) the orderly transfer ofEmployee’s responsibilities; (ii) any investigation conducted by Employer or its counsel relatingto events while Employee was employed by Employer; and (iii) the defense of any action orproceeding brought by any third party against Employer that relates in any way to Employee’s actsor omissions while employed by Employer.          (c) **Return of Property**. On or prior to the Termination Date, Employee shall return toEmployer all property of Employer, including, without limitation, all computers and otherequipment, tangible proprietary information, documents, books, records, reports, contracts, lists,computer disks (or other computer-generated files or data), or copies thereof, created on anymedium, prepared or obtained by Employee in the course of or incident to his employment withEmployer.          (d) **Proprietary Information**. All agreements signed by Employee to protect Employer’sproprietary or confidential information and all non-disclosure agreements between Employer andEmployee shall remain in full force and effect. Employee shall comply with the said agreement andshall not use or disclose trade secrets or other confidential information of Employer for anypurpose, except as necessary in Employer’s interest to perform his duties under Section 1(c),above.          (e) **Non-Disparagement**. Employee shall not disparage Employer, its managers, officers, oremployees, including without limitation making any comment to other employees critical ofmanagement’s business practices or style.          (f) **Non-Interference and Non-Solicitation**. Employee shall not at any time wrongfullyinterfere with Employer’s relationship with its employees, suppliers, customers, or investors.          (g) **Future Employment**. Employee shall not apply for employment with Employer at any time inthe future, and Employer shall not have any obligation to consider Employee for future employment.     4. **Employee Release**. Employee and his representatives, heirs, successors, and assigns dohereby completely release and forever discharge Employer, any Affiliate, and its and their presentand former shareholders, officers, directors, agents, employees, attorneys, successors, and assigns(collectively, “Released Parties”) from all claims, rights, demands, actions, obligations,liabilities, and causes of action of every kind and character, known or unknown, which Employee mayhave now or in the future arising from any act or omission or condition occurring on or prior tothe
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Effective Date (including, without limitation, the future effects of such acts, omissions, orconditions), whether based on tort, contract (express or implied), or any federal, state or locallaw, statute, or regulation, including without limitation the laws of Germany or the European Union(collectively, the “Released Claims”). Employer hereby accepts this declaration by Employee on itsown behalf and on behalf of any and all Released Parties. By way of example and not in limitationof the foregoing, Released Claims shall include any claims arising under the Fair Labor StandardsAct, the National Labor Relations Act, the Family and Medical Leave Act, the Employee RetirementIncome Security Act of 1974, the Americans with Disabilities Act, Title VII of the Civil Rights Actof 1964, the Age Discrimination in Employment Act, the California Fair Employment and Housing Act,and the California Family Rights Act, as well as any claims, asserting wrongful termination, breachof contract, breach of the covenant of good faith and fair dealing, negligent or intentionalinfliction of emotional distress, negligent or intentional misrepresentation, negligent orintentional interference with contract or prospective economic advantage, defamation, invasion ofprivacy, and claims related to disability. Released Claims shall also include, but not be limitedto, claims for severance pay, bonuses, sick leave, vacation pay, life or health insurance, or anyother fringe benefit. Employee likewise releases the Released Parties from any and all obligationsfor attorneys’ fees incurred in regard to the above claims or otherwise. Notwithstanding theforegoing, Released Claims shall not include (i) any claims based on obligations created by orreaffirmed in this Agreement; (ii) any vested retirement benefits or vested stock option rights,and (iii) any claims which by Law cannot be released, including without limitation unemploymentcompensation claims and workers’ compensation claims (the settlement of which would requireapproval by the California Workers’ Compensation Appeals Board).     5. **Section 1542 Waiver**. Employee understands and agrees that the Released Claims include notonly claims presently known to Employee, but also include all unknown or unanticipated claims,rights, demands, actions, obligations, liabilities, and causes of action of every kind andcharacter that would otherwise come within the scope of the Released Claims as described inSections 3, above. Employee understands that he may hereafter discover facts different from whathe now believes to be true, which if known, could have materially affected this Agreement, but henevertheless waives any claims or rights based on different or additional facts. Employeeknowingly and voluntarily waives any and all rights or benefits that he may now have, or in thefuture may have, under the terms of Section 1542 of the California Civil Code, which provides asfollows:A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOTKNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THEDEBTOR.     6. **Covenant Not to Sue**. Employee shall not bring a civil action in any court against Employeror any other Released Party asserting claims pertaining in any manner to the Released Claims.     7. **Age Discrimination Claims**. Employee understands and agrees that, by entering into thisAgreement, (i) he is waiving any rights or claims he might have under the Age Discrimination inEmployment Act was amended by the Older Workers Benefit Protection Act; (ii) he has received
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consideration beyond that to which he was previously entitled; (iii) he has been advised toconsult with an attorney before signing this Agreement; and (iv) he has been offered theopportunity to evaluate the terms of this Agreement for not less than twenty-one (21) days prior tohis execution of the Agreement. Employee may revoke this Agreement (by written notice to Company)for a period of seven (7) days after his execution of the Agreement, and it shall becomeenforceable only upon the expiration of this revocation period without prior revocation byEmployee.     8. **Confidentiality**. The Parties understand and agree that this Agreement and each of itsterms, the facts and circumstances leading to the Agreement, and the negotiations surrounding itare confidential and shall not be disclosed by Employee without the prior written consent ofEmployer, unless required by law. Notwithstanding the foregoing, Employee may disclose the termsof this Agreement to his spouse, and for legitimate business reasons, to legal, financial, and taxadvisors, provided such individuals agree to maintain the confidentiality of such information.Employee understands and agrees that this Agreement may be filed by Employer as an exhibit to aForm 8-K and/or a Form 10-Q.     9. **Non-admission**. The Parties understand and agree that the furnishing of the considerationfor this Agreement shall not be deemed or construed at any time or for any purpose as an admissionof liability by Employer. The liability for any and all claims is expressly denied by Employer.     10. **Arbitration**. All claims that Employee may have against Employer or any other ReleasedParty, or which Employer may have against Employee, of any kind, including, but not limited to, allclaims in any way related to (i) the subject matter, interpretation, application, or alleged breachof this Agreement, (ii) the employment or termination of Employee, or (iii) Employee’s efforts tofind subsequent employment (collectively, “Arbitrable Claims”) shall be resolved by arbitration.Arbitrable Claims shall include, but are not limited to, contract (express or implied) and tortclaims of all kinds, as well as all claims based on any federal, state, or local law, statute, orregulation, excepting only claims under applicable workers’ compensation law and unemploymentinsurance claims. Arbitration shall be final and binding upon the Parties and shall be theexclusive remedy for all Arbitrable Claims. Arbitration of Arbitrable Claims shall be inaccordance with the National Rules for the Resolution of Employment Disputes of the AmericanArbitration Association, as amended, and as augmented by this Agreement. Either Party may bring anaction in court to compel arbitration under this Agreement and to enforce an arbitration award.Otherwise, neither Party shall initiate or prosecute any lawsuit or administrative action in anyway related to any Arbitrable Claim. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BYJURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT LIMITATION, ANY RIGHT TO TRIAL BY JURY AS TOTHE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE.     11. **Integration**. The Parties understand and agree that the preceding Sections recite the soleconsideration for this Agreement; that no representation or promise has been made by Employee,Employer, or any other Released Party concerning the subject matter of this Agreement, except asexpressly set forth in this Agreement; and that all agreements and understandings between theParties concerning the subject matter of this Agreement are embodied and expressed in thisAgreement. This Agreement shall supersede all prior or contemporaneous agreements and
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understandings among Employee, Employer, and any other Released Party, whether written ororal, express or implied, with respect to the employment, termination, and benefits of Employee,including without limitation, any employment-related agreement or benefit plan, except to theextent that the provisions of any such agreement or plan have been expressly referred to in thisAgreement as having continued effect. To the extent not inconsistent with this Agreement, thefollowing shall have such continued effect: the Letter Agreement, Employer’s 40l(k) plan, the AmtelCorporation Deferred Compensation Plan, Employer’s Employee Stock Purchase Plan, and allproprietary or confidential information agreements and non-disclosure agreements between Employerand Employee.     12. **Amendments; Waivers**. This Agreement may not be amended except by an instrument inwriting, signed by each of the Parties. No failure to exercise and no delay in exercising anyright, remedy, or power under this Agreement shall operate as a waiver thereof, nor shall anysingle or partial exercise of any right, remedy, or power under this Agreement preclude any otheror further exercise thereof, or the exercise of any other right, remedy, or power provided hereinor by law or in equity     13. **Successors and Assigns**. Employee represents that he has not previously assigned ortransferred any claims or rights released by him pursuant to this Agreement. This Agreement shallbe binding upon and shall inure to the benefit of the Parties and their respective heirs,successors, attorneys, and permitted assigns. This Agreement shall also inure to the benefit ofany Released Party.     14. **Attorneys’ Fees**. In any legal action, arbitration, or other proceeding brought to enforceor interpret the terms of this Agreement, the prevailing Party shall be entitled to recoverreasonable attorneys’ fees and costs.     15. **Governing Law**. This Agreement shall be governed by and construed in accordance with thelaw of the State of California.     16. **Interpretation**. This Agreement shall be construed as a whole, according to its fairmeaning, and not in favor of or against any Party. By way of example and not in limitation, thisAgreement shall not be construed in favor of the Party receiving a benefit nor against the Partyresponsible for any particular language in this Agreement. Captions are used for referencepurposes only and should be ignored in the interpretation of the Agreement.     17. **Severability**. If any provision of this Agreement, or its application to any person,place, or circumstance, is held by a court of competent jurisdiction to be invalid, unenforceable,or void, such provision shall be enforced to the greatest extent permitted by law, and theremainder of this Agreement and such provision as applied to other persons, places, andcircumstances shall remain in full force and effect.     18. **Representation by Counsel**. The Parties acknowledge that (i) they have had the opportunityto consult counsel in regard to this Agreement; (ii) they have read and understand the Agreementand they are fully aware of its legal effect; and (iii) they are entering into this Agreement
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freely and voluntarily, and base on each Party’s own judgment and not on any representationsor promises made by the other Party, other than those contained in this Agreement.     19. **Counterparts**. This Agreement may be executed in counterparts. True copies of suchexecuted counterparts may be used in lieu of an original for any purpose.     20. **Effective Date**. This Agreement shall become effective as of seven (7) days after the dateexecuted by Employee (“Effective Date”), but only if the Agreement is not revoked as provided inSection 7. If the Agreement is revoked, it shall be null and void.     The Parties have duly executed this Agreement as of the dates noted below.     /s/ ROBERT G. MCCONNELL  Date: 4 August 2008   Robert G. McConnell              Atmel Corporation         /s/ PATRICK REUTENS  Date: 6 Aug. 2008   By: Patrick Reutens    Its: CLO    
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