EXHIBIT 10.1
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                        INNOVATIVE MICRO TECHNOLOGY, INC.

                           CHANGE IN CONTROL AGREEMENT
                           ---------------------------


            THIS AGREEMENT (the "Agreement"), made and entered into as of
the 15th  day of April, 2002, by and between INNOVATIVE MICRO TECHNOLOGY,
INC. a Delaware corporation (the "Company") and John S. Foster
("Executive").

                            W I T N E S S E T H:

            WHEREAS,  the Company  (including  subsidiaries  and  divisions) has
always followed  compensation  policies  intended to reward  executives for past
services  and to  demonstrate  to them that the  Company is  concerned  with the
welfare of its  employees and intends to see that loyal  executives  are treated
fairly; and

            WHEREAS,  the Company regards the continued services of Executive to
be in the best  interests  of the  Company and its  shareholders  and desires to
assure the continued  services of Executive on an objective and impartial  basis
and  without  distraction  or conflict of interest in the event of an attempt to
change control of the Company; and

            WHEREAS, Executive is willing to remain in the employ of the Company
upon the  understanding  that the  Company  will  provide him or her with income
security  if  his or her  employment  is  terminated  under  certain  conditions
following a change in control of the Company;

            NOW,  THEREFORE,  in  consideration  of the  premises and the mutual
covenants and  agreements  hereinafter  set forth,  the parties  hereto agree as
follows:

     1. Definitions.  For purposes of this Agreement,  the following terms shall
have the meanings indicated:

         1.1 "the Company" means and includes Innovative Micro Technology, Inc.,
and any subsidiary or division thereof, as the context may require.

         1.2 "Base  Amount" means the sum of (a)  Executive's  then monthly base
salary; (b) Executive's then monthly car allowance,  if any, and (c) one-twelfth
of an amount  equal to any bonus that  Executive  received  or was  entitled  to
receive for the fiscal year immediately preceding a Change in Control. 1.1


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         1.3  "Cause"  means (a)  Executive's  continued  failure to perform his
duties after a written  demand for  substantive  performance is delivered by the
Company's Board of Directors to Executive documenting specific areas of repeated
and continuing  nonperformance,  or (b) Executive's willful, reckless or grossly
negligent  misconduct  materially injurious to the Company;  provided,  however,
that "Cause" shall be deemed not to have occurred  unless and until a resolution
shall have been  adopted by the  affirmative  vote of  two-thirds  of the entire
membership  of the  Company's  Board of  Directors  after  reasonable  notice to
Executive of such Cause and reasonable  opportunity for Executive and his or her
counsel to be heard.

         1.4 "Change in Control" means any of the following:


             (a) The Company is merged, consolidated or reorganized into or with
another Person, and as a result of such merger,  consolidation or reorganization
less  than a  majority  of the  combined  voting  power of the  then-outstanding
securities of the combined Person immediately after such transaction are held in
the  aggregate by the holders of the  combined  voting power of the Voting Stock
immediately prior to such transaction;

             (b) The Company sells or otherwise  transfers all or  substantially
all of its  assets to any other  corporation  or other  Person,  and less than a
majority of the combined voting power of the then-outstanding securities of such
corporation  or person  immediately  after such sale or  transfer is held in the
aggregate by the holders of the Voting Stock of the Company immediately prior to
such sale or transfer; or

             (c)  Any  Person  becomes  the   beneficial   owner  (as  the  term
"beneficial  owner" is used in Section  13(d)(3) or Section 14(d)(2) of the 1934
Act) of securities representing 20% or more of the Voting Stock.

         1.5 "Disability" means Executive's  absence from his or her duties with
the Company for a  contiguous  period of nine months as a result of  Executive's
incapacity  due  to  physical  or  mental  illness,   provided  that  notice  of
Executive's  termination  due to Disability is provided to Executive  within the
30-day period following such nine-month period.

         1.6 "Medical  Benefits"  mean all group,  life  insurance,  medical and
dental  care  plans and all  disability  insurance  provided  by the  Company to
Executive immediately before Executive's Termination of Employment.

         1.7 "Options" means all the options to purchase shares of Capital Stock
of the Company granted to Executive under the Company's various employee benefit
plans (as defined in Rule 405  promulgated  under the  Securities  Act of 1933),
whether or not such options are vested or not.

         1.8  "Person"  means any person or entity as defined or  referred to in
Sections 3(a) (9) and 13 (d) (1) et seq. of the Securities  Exchange Act of 1934
and rules of the Securities and Exchange Commission promulgated thereunder.

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         1.9 "Restricted  Stock" means shares of the Company's Common Stock that
have been issued to Executive and are subject to forfeiture or repurchase by the
Company, or the sale of which is restricted unless certain financial  objectives
are achieved by the Company.

         1.10  "Retirement"  means  termination  by the Company or  Executive of
Executive's  employment based on Executive's having reached age 65 or such other
age as shall have been fixed in any  arrangement  established  with  Executive's
consent with respect to Executive.

         1.11  "Termination of Employment"  means the termination of Executive's
employment  with the Company,  within three years after a Change in Control,  by
either (a) the Company (other than for "Cause"); or (b) Executive (other than by
Retirement,  death or Disability) following the occurrence,  without Executive's
consent, of any of the following events ("Good Reason"):

         (i)   the  assignment  to  Executive  of duties  inconsistent  with and
               adverse to Executive's  position,  duties,  responsibilities  and
               status  with the  Company  immediately  prior to such  Change  in
               Control  of the  Company,  or an  adverse  change in  Executive's
               titles or offices as in effect  immediately  prior to such Change
               in Control of the Company,  or a reduction of Executive's  duties
               or responsibilities as in effect immediately prior to such change
               in Control of the Company,  or any removal of  Executive  from or
               any failure to reelect Executive to any of such positions, except
               in connection  with  termination  of  Executive's  employment for
               Disability,  Retirement  or Cause or as a result  of  Executive's
               death or by Executive other than for Good Reason;

         (ii)  A reduction  in  Executive's  base salary and bonus  compensation
               unless such reduction is part of a uniformly  applied  program of
               reductions  reasonably adopted due to the Company's then business
               condition;

         (iii) A failure to  increase  Executive's  base salary on or before the
               later to occur of 12 months from the date of the last increase in
               Executive's  base  salary  or 60 days  following  such  Change in
               Control,  in an amount  not less than 50% of the  average  annual
               percentage base salary increase for all "Corporate Executives" of
               the  Company  in the 36 months  preceding  the date on which such
               increase shall be due. For purposes of this  subparagraph  (iii),
               "Corporate  Executives"  of the  Company  shall  mean  the  Chief
               Executive  Officer  of  the  Company  and  each  of  the  Company
               executives who report directly to the Chief Executive Officer.

         (iv)  A failure of the  Company to  continue  in effect any  benefit or
               incentive plan or arrangement in which Executive is participating
               at the time of such  Change  in  Control,  or the  taking  of any
               action by the Company which would  adversely  affect  Executive's
               participation in or materially reduce Executive's  benefits under
               any such plan or arrangement or deprive Executive of any material
               fringe benefit enjoyed by Executive at the time of such Change in
               Control,  unless such failure  results  from a uniformly  applied
               program of  reductions  reasonably  adopted due to the  Company's
               then business condition;

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         (v)   Executive is either (x)  transferred to a principal work location
               which will require him to travel more than twenty-five (25) miles
               from  his or  her  then  principal  residence  to his or her  new
               principal work  location,  or (y) he or she is required to engage
               in a  substantially  increased  amount of travel on the Company's
               business;

         (vi)  any  material  breach by the  Company  or any  provision  of this
               Agreement.


         1.12  "Voting  Stock"  means,   from  time  to  time,  the  outstanding
securities  entitled  to vote  generally  in the  election of  directors  of the
Company.

     2. Payment Upon  Termination  of  Employment.  Subject to Section 10 below,
within 10 days  immediately  following a Termination of Employment,  the Company
shall forthwith pay Executive a lump sum equal to twelve  multiplied by the Base
Amount.

     3.  Continuation  of  Insurance.  For  a  period  of  12  months  following
Executive's Termination of Employment or until such time that Executive shall be
employed  by  an  employer  who  provides   Executive   with  medical   benefits
substantially similar to the Medical Benefits,  Executive shall receive the same
Medical Benefits that he or she (and his or her family, if applicable)  received
from  the  Company  prior to his or her  Termination  of  Employment;  provided,
however,  that if the plans pursuant to which the Medical Benefits were provided
to  Executive  have  been  or are  modified,  Executive  shall  be  entitled  to
substantially  similar Medical Benefits from other reputable sources.  Executive
shall be required to pay the same amount for such Medical  Benefits as he or she
paid prior to his or her Termination of Employment.

     4. Acceleration of Options and Removal of Restrictions on Restricted Stock.
Immediately upon or following Termination of Employment,  (i) all shares covered
by Executive's Options shall become immediately and fully exercisable, and shall
remain  exercisable until the expiration  thereof,  and Executive shall have the
right to purchase, by exercise of such Options, all or any portion of the shares
covered by such Options;  provided  however,  that in no event may any Option be
exercised after the expiration date thereof, and (ii) all Restricted Stock shall
become fully vested and released from any repurchase or forfeiture  rights;  any
restrictions  on the  sale of the  Restricted  Stock  shall be  removed  and the
Restricted  Stock  shall be fully  saleable,  subject  to any  other  applicable
restrictions that may affect the sale of the Restricted Stock.

     5.  Representation  by  Executive;   No  Employment   Contract.   Executive
represents that it is his or her present intention to continue in the employ the
Company and he or she is not currently aware of any facts or circumstances  that
would  cause him or her to change  such  intention  in the  foreseeable  future.
Executive acknowledges that Executive has been advised and understands that this
Agreement  shall  not,  however,  be deemed in any way to create a  contract  of
employment between the Company and Executive.

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     6. Expenses of Executive.  the Company agrees to pay or reimburse Executive
for all costs and expenses (including court costs and attorneys,  fees) incurred
by Executive  (a) in the  successful  prosecution  or settlement of any claim or
action by Executive to enforce his or her rights under this Agreement, or (b) in
any  other  action  or  proceeding,  not  involving  such a claim or  action  by
Executive,  which challenges the validity or enforceability of this Agreement or
any similar agreements with other employees of the Company.  The Company further
agrees to pay or reimburse Executive for all costs and expenses (including legal
and accounting  fees and expenses)  incurred by Executive in connection with any
audit or review by the Internal Revenue Service of any excise tax imposed on any
payments under this Agreement.

     7.  Liability  for Taxes.  the Company  shall have no liability for any tax
liability of Executive  attributable  to any payment made under this  Agreement.
The Company may  withhold  from any such payment such amounts as may be required
by applicable  provisions of the Internal  Revenue Code, other tax laws, and the
rules and regulations of the Internal Revenue Service and other tax agencies, as
in effect at the time of any such payment.

     8.  Termination of Agreement.  This Agreement  shall terminate and be of no
further  effect  (except  to the  extent  that  any  obligation  of the  Company
hereunder  remains  unpaid  as of such  time)  upon  the  first  to occur of (a)
termination of Executive's  employment with the Company for any reason,  whether
voluntarily or  involuntary,  prior to a Change in Control;  (b)  termination of
Executive's  employment  by the Company due to  Executive's  death,  Retirement,
Disability  or for Cause or by  Executive  other  than for Good  Reason;  (c) 36
months from the date of a Change of Control, or (d) 12 months following the date
that written notice of termination of this Agreement is provided to Executive by
the Company's  Board of Directors,  if a Change in Control does not occur within
that 12-month period.

     9. Other Plans. To the extent that Executive  shall receive  payments under
this Agreement,  he or she shall not be eligible to receive  severance  benefits
under  the  Company's  standard  severance  policy;   provided,   however,  that
notwithstanding  the previous  sentence,  Executive shall be entitled to receive
paid time off and shall be  entitled  to such other  benefits  as  described  in
Section 3 of this Agreement.

     10.  Taxes.  The Company  shall not make the payment  provided in Section 2
above to the extent  that such  payment,  after  taking  into  account any other
payments  in the nature of  compensation  payable to (or for the benefit of) the
Executive  contingent  on a  Change  in  Control,  would  result  in  "parachute
payments" as defined in Section 280G of the  Internal  Revenue Code of 1986,  as
amended  (the  "Code").  This  determination  shall  be  made  by  a  nationally
recognized accounting firm (the "Accounting Firm") within 15 days after the date
on  which  the  payment  provided  in  Section  2 is  otherwise  triggered.  The
Accounting  Firm shall be selected by the  Company.  The  Accounting  Firm shall
provide the Company and the Executive with detailed calculations  supporting its
determinations.  All fees and expenses of the Accounting  Firm shall be borne by
the Company.

     11. No Obligation to Mitigate.  Executive shall not be required to mitigate
damages or the  amount of any  payment  provided  for under  this  Agreement  by
seeking  other  employment  or  otherwise,  nor shall the amount of any  payment
provided  for under this  Agreement  be reduced  by any  compensation  earned by

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Executive  as the result of  employment  by another  employer  after the date of
termination, or otherwise.

      12. General Provisions.

         12.1 Subject to the provisions of Section 12.4 below, no right, benefit
or interest  hereunder shall be subject to assignment except by operation of law
to the personal  representative  or heirs of  Executive if Executive  dies after
Termination  of  Employment  but prior to the making of the payment  required by
section  2,  anticipation,   alienation,  sale,  encumbrance,   charge,  pledge,
hypothecation  or set-off in respect  of any claim,  debt or  obligation,  or to
execution, attachment, levy or similar process.

         12.2  Except  as  provided  in  Section  8, this  Agreement  may not be
amended, modified or canceled except by written agreement of the parties.

         12.3 In the event that the scope of any provision of this Agreement, or
portion  thereof,  shall be determined to be  unenforceable  to its full extent,
then such provision, or portion thereof, shall be enforced to the maximum extent
permitted by law. In the event that any provision of this Agreement,  or portion
thereof, is determined to be invalid in its entirety,  the remaining  provisions
of this  Agreement  shall remain in full force and effect to the fullest  extent
permitted by law.

         12.4 This  Agreement  shall be binding upon and inure to the benefit of
Executive  (and  his or her  personal  representative),  the  Company,  and  any
successor organization or organizations which shall succeed to substantially all
of the  business  and  property  of the  Company,  whether  by means of  merger,
consolidation,  acquisition of substantially all of the assets of the Company or
otherwise, including by operation of law.

         12.5  This  Agreement  has been made in and  shall be  governed  by and
construed in accordance with the laws of the State of California.

         12.6 This  Agreement  shall  supersede  and replace in its entirety any
previous agreement between the parties relating to the same subject matter. This
Agreement  sets forth the entire  agreement  and  understanding  of the  parties
hereto with respect to the matters covered hereby.

            IN  WITNESS   WHEREOF,   the  parties   hereto  have  executed  this
Indemnification Agreement as of the date first above written.


                              INNOVATIVE MICRO TECHNOLOGY, INC.,
                              a Delaware corporation



                              By    /s/ John S. Foster
                                    ------------------
                                    Name:   John S. Foster
                                    Title:  Chairman and CEO


                                    EXECUTIVE

                                    /s/ John S. Foster
                                    ------------------
                                    John S. Foster
                                    Name:

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