Document:

Exhibit

EXHIBIT 10.1
Execution Version

SEVENTH AMENDMENT TO 
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter called this “Amendment”) is dated as of January 28, 2016 (the “Amendment Effective Date”), by and among Synergy Resources Corporation (the “Borrower”), each Lender (defined below) signatory hereto and SunTrust Bank, as Administrative Agent for the Lenders (in such capacity, together with its successors in such capacity “Administrative Agent”) and as an Issuing Bank.
W I T N E S S E T H:
WHEREAS, the Borrower, Administrative Agent and the lenders from time to time party thereto (the “Lenders”) are parties to that certain Amended and Restated Credit Agreement dated as of November 28, 2012, as amended by the following:  that certain First Amendment to Credit Agreement dated as of February 12, 2013, Second Amendment to Credit Agreement dated as of June 28, 2013, Third Amendment to Credit Agreement dated as of December 20, 2013, Fourth Amendment to Credit Agreement dated as of June 3, 2014, Fifth Amendment to Amended and Restated Credit Agreement dated as of December 15, 2014 and Sixth Amendment to Amended and Restated Credit Agreement dated as of June 2, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), whereby upon the terms and conditions therein stated the Lenders have agreed to make certain loans to the Borrower;
WHEREAS, the Borrower has requested that Administrative Agent and the Lenders, as applicable, amend the Credit Agreement as set forth below; and
WHEREAS, subject to the terms and conditions hereof, Administrative Agent and the Lenders, as applicable, are willing to agree to the amendments to the Credit Agreement as set forth herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, the parties to this Amendment hereby agree as follows:
SECTION 1.Definitions.  Unless otherwise defined in this Amendment, each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement.  The interpretive provisions set forth in Sections 1.02, 1.03 and 1.04 of the Credit Agreement shall apply to this Amendment.
SECTION 1.    Borrowing Base.  Effective on the Amendment Effective Date, the Borrowing Base is decreased to $145,000,000.  The Borrowing Base redetermination provided for by this Amendment is the Scheduled Redetermination for December 15, 2015, which was postponed to January 15, 2016, pursuant to that certain Consent and Waiver to Amended and Restated Credit Agreement dated as of December 11, 2015, by and among the Borrower, each Lender signatory thereto, Administrative Agent and Issuing Bank.
SECTION 2.    Amendments to Credit Agreement.  Effective on the Amendment Effective Date, the Credit Agreement is hereby amended as follows:
(a)    The definition of “Applicable Margin” in Section 1.01 is amended by deleting the following language: “, subject to a minimum interest rate floor (which includes the Applicable Margin and the Alternate Base Rate or Adjusted LIBO Rate, as the case may be) of 2.5% per annum”.  
(b)    Clause (a) of the definition of “Investment” in Section 1.01 is amended by inserting the following after “any agreement”: “(other than a merger agreement entered into by the Borrower or any 

Subsidiary which would not, upon the consummation of the transactions contemplated by such merger agreement, cause the Borrower or such Subsidiary to fail to comply with Section 9.06; provided, that the ability of the Borrower or such Subsidiary to enter into such merger agreement shall not be deemed to be a consent by the Lenders to the consummation of the transactions contemplated by such merger agreement)”.
(c)    The definition of “Reserve Report” in Section 1.01 is amended by replacing the reference to “each August 31 or February 28” with “each August 31 or February 28 (or, in the event the Borrower changes its fiscal year end from August 31 to December 31, each July 1 or January 1)”.   
(d)    Section 2.07(c)(i)(A) is amended by replacing the reference to “each December 15 and June 15 thereafter” with “each December 15 and June 15 thereafter (or, in the event the Borrower changes its fiscal year end from August 31 to December 31, each November 1 and May 1 thereafter)”. 
(e)    Section 8.01(n)(ii) is amended to read as follows:
“(ii)    [Reserved]; and”
(f)    Section 8.12(a) is amended by (i) replacing the reference to “each November 15 and May 15 thereafter” with “each November 15 and May 15 thereafter (or, in the event the Borrower changes its fiscal year end from August 31 to December 31, each October 1 and April 1 thereafter) and (ii) replacing the reference to “the immediately preceding August 31st and February 28th” with “the immediately preceding August 31st and February 28th (or, in the event the Borrower changes its fiscal year end from August 31 to December 31, the immediately preceding July 1st and January 1st)”.   
(g)    The first sentence of Section 8.14(b) is amended by adding the following proviso to the end thereof: “provided, that the Borrower or any Subsidiary shall not be required to comply with this Section 8.14(b) with respect to any Subsidiary formed for the purpose of entering into a merger agreement so long as: (A) such formed Subsidiary does not have any material assets or liabilities, other than such merger agreement, (B) no Loan Party guarantees or otherwise becomes liable in respect of any Debt or any other obligations, or grants any Lien on any of its property to secure any Debt of or other obligations of, or provide any other form of credit support to such formed Subsidiary, (C) consummation of the transactions contemplated by such merger agreement would not cause the Borrower or any Subsidiary to fail to comply with Section 9.06 and (D) such formed Subsidiary either (y) becomes a Loan Party and otherwise complies with the Credit Agreement substantially concurrently with the closing of such merger agreement, or (z) is dissolved or becomes a Loan Party within thirty (30) days after any termination of such merger agreement.” 
(h)    Section 8.17 is amended to read as follows:
“Section 8.17    [Reserved].”
(i)    Section 9.01(b) is amended to read as follows:
“(b)    Current Ratio.  The Borrower will not permit, as of the last day of any fiscal quarter, its ratio of (i) current assets (excluding current assets resulting from requirements of ASC Topic 815) plus unused availability under the total Commitments (but only to the extent that the conditions to borrowing are able to be met at such time) to (ii) current liabilities (excluding the current portion of the sum of each Lender’s Commitment and current liabilities resulting from the requirements of ASC Topic 815), determined at the end of each fiscal quarter of the Borrower that ends after November 30, 2015, to be less than 1.0 to 1.0.” 

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(j)    Section 9.15 is amended by adding the following sentence to the end thereof: “Notwithstanding the foregoing, the Borrower or any Subsidiary may, without seeking or obtaining consent, create one or more Subsidiaries that comply with the proviso at the end of the first sentence of Section 8.14(b).”
(k)    Section 9.18(a) is amended to read as follows:
“(a)    The Borrower shall neither assign, terminate, unwind nor sell any Hedging Agreements listed on Schedule 7.20.  The Borrower shall not enter into Hedging Agreements in respect of commodities other than Hydrocarbons.  In the case of Hydrocarbons, the Borrower shall not enter into Hedging Agreements if the effect thereof would be to cause the notional volumes of all Hedging Agreements and additional fixed‐price physical off‐take contracts, in the aggregate, to exceed (i) the greater of (y) 100% of the projected production from the Borrower’s Proved Developed Producing Reserves reflected in the most recently completed Reserve Report and (z) 85% of the projected production from the Borrower’s Proved Reserves reflected in the most recently completed Reserve Report for any month continuing through and including the date that is twenty-four (24) months following the effective date of each such Hedging Agreement and (ii) the greater of (y) 85% of the projected production from the Borrower’s Proved Developed Producing Reserves reflected in the most recently completed Reserve Report and (z) 65% of the projected production from the Borrower’s Proved Reserves reflected in the most recently completed Reserve Report for any month that is twenty-five (25) months following the effective date of each such Hedging Agreement and continuing through and including the date that is sixty (60) months following such effective date (it being understood that any put contracts entered into for non speculative purposes shall not count against the above limitation). The Borrower shall not enter into Hedging Agreements converting interest rates.  The Borrower shall not post any collateral to secure Hedging Agreements, except as contemplated by the Loan Documents in the case of a Secured Hedging Counterparty.”
(l)    Section 9.18(b) is amended to read as follows:
“(b)    The limitations on Hedging Agreements set forth in this Section 9.18 shall be calculated based upon barrels of oil or cubic feet of natural gas, as the case may be, as set forth in the relevant Reserve Report and shall not be based on barrel of oil equivalent (or BOE) computations.”   
(m)    Section 9.18(c) is deleted.

SECTION 3.    Conditions of Effectiveness. This Amendment shall become effective as of the Amendment Effective Date, provided that each of the following conditions precedent have been satisfied:
(a)    The Administrative Agent shall have received a counterpart of this Amendment which shall have been executed by the Administrative Agent, the Issuing Bank, the Lenders and the Borrower (which may be by telecopy or PDF transmission).   
(b)    Payment by the Borrower of the fees and expenses of the Administrative Agent’s counsel pursuant to Section 12.03(a) of the Credit Agreement, including fees and expenses in connection with the preparation, negotiation and closing of this Amendment, to the extent invoiced at least three Business Days prior to the Amendment Effective Date.
(c)    All representations and warranties set forth in each of the Loan Documents (including this Amendment) shall be true and correct in all material respects (other than those representations and warranties 

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that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects).
SECTION 4.    Representations and Warranties.  The Borrower represents and warrants to Administrative Agent and the Lenders, with full knowledge that such Persons are relying on the following representations and warranties in executing this Amendment, as follows:
(a)    It has the organizational power and authority to execute, deliver and perform this Amendment, and all necessary organizational action on the part of it requisite for the due execution, delivery and performance of this Amendment has been duly and effectively taken.
(b)    The Credit Agreement, as amended by this Amendment, the Loan Documents and each and every other document executed and delivered to the Administrative Agent and the Lenders in connection with this Amendment to which it is a party constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
(c)    This Amendment does not and will not violate any provisions of any of the Organizational Documents of the Borrower.
(d)    No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Amendment.
(e)    On the Amendment Effective Date, after giving effect to this Amendment, (i) since August 31, 2015, no Material Adverse Effect has occurred, (ii) no Default or Event of Default has occurred and is continuing, and (iii) all representations and warranties set forth in each of the Loan Documents are true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties are true and correct in all respects).
SECTION 5.    Miscellaneous.
(a)    Reference to the Credit Agreement.  Upon the effectiveness hereof, on and after the date hereof, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, shall mean and be a reference to the Credit Agreement as amended hereby.
(b)    Extent of Amendments; Ratification.  Except as otherwise expressly provided herein, the Credit Agreement and the other Loan Documents are not amended, waived, modified or affected by this Amendment and all of the terms and conditions of the Credit Agreement and the other Loan Documents are, and remain, in full force and effect in accordance with their respective terms.  The Borrower hereby ratifies and confirms that, after giving effect to this Amendment, (i) except as expressly amended hereby, all of the terms, conditions, covenants, representations, warranties and all other provisions of the Credit Agreement remain in full force and effect, (ii) each of the other Loan Documents are and remain in full force and effect in accordance with their respective terms, and (iii) the collateral and the Liens on the collateral securing the Indebtedness are unimpaired by this Amendment and remain in full force and effect.
(c)    Loan Documents.  The Loan Documents, as such may be amended in accordance herewith, are and remain legal, valid and binding obligations of the parties thereto, enforceable in accordance with their respective terms.  This Amendment is a Loan Document.

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(d)    Claims.  As additional consideration to the execution, delivery, and performance of this Amendment by the parties hereto and to induce Administrative Agent and the Lenders to enter into this Amendment, the Borrower represents and warrants that, as of the date hereof, it does not know of any defenses, counterclaims or rights of setoff to the payment of any Indebtedness of the Borrower to Administrative Agent, Issuing Bank or any Lender.
(e)    Execution and Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.  Delivery of an executed counterpart of this Amendment by facsimile or pdf shall be equally as effective as delivery of a manually executed counterpart.
(f)    Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York and applicable federal laws of the United States of America.
(g)    Headings.  Section headings in this Amendment are included herein for convenience and reference only and shall not constitute a part of this Amendment for any other purpose.
SECTION 6.    NO ORAL AGREEMENTS.  THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES TO THE LOAN DOCUMENTS SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS.  THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE BORROWER, ADMINISTRATIVE AGENT, ISSUING BANK AND/OR LENDERS REPRESENT THE FINAL AGREEMENT BETWEEN SUCH PARTIES, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.
SECTION 7.    No Waiver.  The Borrower hereby agrees that no Event of Default and no Default has been waived or remedied by the execution of this Amendment by the Administrative Agent or any Lender.  Nothing contained in this Amendment nor any past indulgence by the Administrative Agent, Issuing Bank or any Lender, nor any other action or inaction on behalf of the Administrative Agent, Issuing Bank or any Lender, (a) shall constitute or be deemed to constitute a waiver of any Defaults or Events of Default which may exist under the Credit Agreement or the other Loan Documents, or (b) shall constitute or be deemed to constitute an election of remedies by the Administrative Agent, Issuing Bank or any Lender, or a waiver of any of the rights or remedies of the Administrative Agent, Issuing Bank or any Lender provided in the Credit Agreement, the other Loan Documents, or otherwise afforded at law or in equity.
Signatures Pages Follow

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.
BORROWER:    SYNERGY RESOURCES CORPORATION
		
	By: 
	/s/ James P. Henderson    

James P. Henderson
Executive VIce President Finance and Chief Financial Officer

Signature Page to Seventh Amendment

SUNTRUST BANK,
as Administrative Agent and as an Issuing Bank and a Lender
		
	By: 
	/s/ Yann Pirio    

Yann Pirio
Managing Director

Signature Page to Seventh Amendment

COMMUNITY BANKS OF COLORADO,
as an Issuing Bank and as a Lender
		
	By: 
	/s/ Sarah E. Burchett    

Sarah E. Burchett
Managing Director

Signature Page to Seventh Amendment

KEYBANK NATIONAL ASSOCIATION,
as a Lender
		
	By: 
	/s/ George E. McKean    

George E. McKean
Senior Vice President

Signature Page to Seventh Amendment

ZB, N.A. dba Amegy Bank,
as a Lender
		
	By: 
	/s/ Ronnie Causey    

Ronnie Causey
Vice President

Signature Page to Seventh Amendment

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as a Lender
		
	By: 
	/s/ Darren Vanek    

Darren Vanek
Authorized Signatory

Signature Page to Seventh Amendment

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as a Lender
		
	By: 
	/s/ Mark Roche    

Mark Roche
Managing Director

		
	By: 
	/s/ Michael Willis    

Michael Willis
Managing Director

Signature Page to Seventh Amendment

DEUTSCHE BANK AG NEW YORK BRANCH,
as a Lender
		
	By: 
	/s/ Dusan Lazarov    

Dusan Lazarov
Director

		
	By: 
	/s/ Michael Winters    

Michael Winters
Vice President

Signature Page to Seventh Amendment

IBERIABANK,
as a Lender
		
	By: 
	/s/ Tyler S. Thoem    

Tyler S. Thoem
Senior Vice President

Signature Page to Seventh AmendmentExhibit

Exhibit 10.1

PIXELWORKS, INC.
EXECUTIVE EMPLOYMENT AGREEMENT 
This Agreement (the “Agreement”) is effective as of February 1, 2016 (the “Effective Date”), by and between Stephen Domenik (the “Executive”) and Pixelworks, Inc., an Oregon corporation (the “Company”). 
AGREEMENT
In consideration of the mutual covenants herein contained, the parties agree as follows:
1.Employment. The Company employs Executive as Interim Chief Executive Officer.

(a)Effective Date. Executive’s employment will commence on February 1, 2016 and any measurement of any seniority dependent benefits the Company may from time to time make available will be measured from such date.

(b)Compensation and Equity Award. Company employs Executive at the annualized base salary rate set forth in Exhibit A, paid bi-weekly, less payroll deductions and all required withholdings, with the bonus plan set forth in Exhibit A, and with the option or restricted stock unit award set forth in Exhibit A. The Company shall pay all bonus payments to Executive no later than March 15 of the year following the year in which a bonus is earned.

(c)At Will. Executive acknowledge that the Executive’s employment is and shall continue to be at-will, as defined under applicable law. Company or Executive may terminate this Agreement at any time for any reason, with or without cause and with or without notice. If the Executive’s employment terminates for any reason, the Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by the Company’s then existing employee benefit plans or policies at the time of termination.

(d)Duties. Executive shall perform such officer level duties and have such officer level authority and responsibility as is usual and customary for a Chief Executive Officer, plus any additional officer level duties as may reasonably be assigned from time to time by the Board, including but not limited to providing services as an officer and/or as a member of the boards of directors to one or more of the Company’s subsidiaries or affiliates. Executive shall perform the duties and carry out the responsibilities assigned to Executive, to the best of his ability, in a trustworthy, businesslike and efficient manner for the purpose of advancing the business of the Company and shall comply with the Company’s policies and procedures, as generally in effect from time to time, in all material respects. Except as otherwise approved by the Board in writing, Executive shall devote substantially all of his business time to the performance of his duties under this Agreement. 

2.Accrued Wages and Vacation, Expenses always payable. Without regard to the reason for, or the timing of, Executive’s termination of employment: (i) the Company shall pay the Executive any unpaid base salary earned for periods prior to the effective date of Executive’s termination of employment (the “Termination Date”); (ii) the Company shall pay Executive all of Executive’s accrued and unused vacation through the Termination Date; and (iii) following submission of proper expense reports by Executive, the Company shall reimburse Executive for all expenses reasonably and necessarily incurred by the Executive in connection with the business of the Company prior to the Termination Date. These payments shall be made promptly following termination and within the period of time mandated by law.

3.Limitation on Payments. In the event that benefits otherwise payable to the Executive (i) constitute “parachute payments” within the meaning of Section 280G of the United States Internal Revenue 

Code (the “Code”), and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such benefits shall be either

(a)delivered in full, or

(b)delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, 

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.
Any determination required under this section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this section. All payments made under this Agreement shall be subject to reduction for all applicable federal, state, and local tax withholdings and any other required withholdings. Any reduction payments and/or benefits required by this Agreement shall occur in the following order: (1) reduction of cash payments; (2) reduction of vesting acceleration of equity awards; and (3) reduction of other benefits paid or provided to Executive. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting shall be canceled in the reverse order of the date of grant for Executive’s equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. 
4.Successors.

(a)Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this Agreement and agree expressly to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this subsection (a) or which becomes bound by the terms of this Agreement by operation of law.

(b)Executive’s Successors. Without the written consent of the Company, Executive may not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

5.Litigation/Audit Cooperation. Following the termination of Executive’s employment for any reason, Executive shall reasonably cooperate with the Company or any of its subsidiaries or affiliates (the “Company Group”) in connection with (a) any internal or governmental investigation or administrative, regulatory, arbitral or judicial proceeding involving any member of the Company Group with respect to 

matters relating to Executive’s employment with or service as a member of the board of directors of any member of the Company Group other than a third party proceeding in which Executive is a named party and Executive and the Company (or the applicable member(s) of the Company Group) have not entered into a mutually acceptable joint defense agreement (collectively, “Litigation”) or (b) for a two (2) year period following the Termination Date, any audit of the financial statements of any member of the Company Group with respect to the period of time when Executive was employed by any member of the Company Group (“Audit”). Executive acknowledges that such cooperation may include, but shall not be limited to, Executive making himself available to the Company or any other member of the Company Group (or their respective attorneys or auditors) upon reasonable notice for: (i) interviews, factual investigations, and providing declarations or affidavits that provide truthful information in connection with any Litigation or Audit; (ii) appearing at the request of the Company or any member of the Company Group to give testimony without requiring service of a subpoena or other legal process; (iii) volunteering to the Company or any member of the Company Group pertinent information related to any Litigation or Audit; (iv) providing information and legal representations to the auditors of the Company or any member or any member of the Company Group, in a form and within a timeframe requested by the Board, with respect to the Company’s or any member of the Company Group’s opening balance sheet valuation of intangibles and financial statements for the period in which Executive was employed by the Company or any member of the Company Group; and (v) turning over to the Company or any member of the Company Group any documents relevant to any Litigation or Audit that are or may come into Executive’s possession. The Company shall reimburse Executive for reasonable travel expenses incurred in connection with providing the services under this Section, including lodging and meals, upon Executive’s submission of receipts. The Company shall also compensate Executive for each hour that Executive provides cooperation in connection with this Section at an hourly rate equal to Executive’s termination-base salary plus his termination-base bonus, each as defined on Exhibit A, divided by 2080. Executive shall submit invoices for any month in which Executive performs services pursuant to this Section that details the amount of time and a description of the services rendered for each separate day that Executive performed such services. Any reimbursement requests pursuant to this Section must be submitted within sixty (60) days of the day Executive incurs such expenses. The Company shall reimburse Executive within fifteen (15) days of receiving a reimbursement request from Executive. 

6.409A Savings Clause.

(a)Notwithstanding anything to the contrary in this Agreement, no Deferred Payments (as defined below) or other severance benefits that otherwise are exempt from Section 409A (as defined below) pursuant to Treasury Regulation Section 1.409A-1(b)(9) shall become payable until Executive has a “separation from service” within the meaning of Section 409A.

(b)Further, if Executive is a “specified employee” within the meaning of Section 409A at the time of his separation from service (other than due to death), and the severance payments and benefits payable to him, if any, pursuant to the Agreement, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A (together, the “Deferred Payments”), such Deferred Payments that otherwise are payable within the first six (6) months following his separation from service will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of his separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, in the event of Executive’s death following his separation from service but prior to the six (6) month anniversary of Executive’s separation from service (or any later delay date), then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment 

or benefit. Each payment and benefit payable under the Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. 

(c)Any severance payment that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute Deferred Payments for purposes of the Agreement. Any severance payment that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit shall not constitute Deferred Payments for purposes of the Agreement. For purposes of this Agreement, “Section 409A Limit” means the lesser of 2 times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during Executive’s taxable year preceding Executive’s taxable year of his termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your employment is terminated.

(d)Any reimbursement payments made to Executive pursuant to Section 2 shall be paid to the Executive on or before the last day of Executive’s taxable year following the taxable year in which the related expense was incurred. The reimbursements pursuant to Section 2 are not subject to liquidation or exchange for another benefit, and the amount of such reimbursements that Executive receives in one taxable year shall not affect the amount of such reimbursements that Executive receives in any other taxable year.

(e)The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided under the Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Executive and the Company agree to work together in good faith to consider amendments to the Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A.

7.Notices. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Executive, mailed notices shall be addressed to Executive at the home address which Executive most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

8.Arbitration.

(a)Any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in Santa Clara County, California, in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitration shall be conducted by a single neutral arbitrator selected by the parties from a list maintained by the AAA, through the selection procedures set forth in the Rules. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The Company shall be responsible for paying the costs 

of the arbitration proceeding (for example, arbitrator’s fees and costs, transcript of the hearing), but each party shall be responsible for his or its attorneys’ fees.

(b)The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to conflicts of law rules. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. 

(c)Executive understands that nothing in this Section modifies Executive’s at-will employment status. Either Executive or the Company can terminate the employment relationship at any time, with or without Cause.

(d)EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

(i)ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.

(ii)ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL CONSTITUTION OR STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND THE CALIFORNIA LABOR CODE (EXCEPT FOR CLAIMS FOR UNDERLYING WORKERS' COMPENSATION BENEFITS); AND

(iii)ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

9.Proprietary Information and Inventions Assignment Agreement. Executive shall execute and comply with the terms of the Company’s standard Proprietary Information and Inventions Assignment Agreement. 

10.Miscellaneous Provisions.

(a)Waiver. No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(b)Integration; Amendment. This Agreement and any agreements referenced herein represent the entire agreement and understanding between the parties as to the subject matter herein and collectively supersede all prior or contemporaneous agreements, whether written or oral, with respect to the same subject matter. For clarification purposes and the avoidance of any doubt, this Agreement shall not affect any agreements between the Company and Executive regarding intellectual property matters or confidential information of the Company. This Agreement may be amended only by a written agreement, signed by the parties to be bound by the amendment that specifically references this Agreement.

(c)Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of California.

(d)Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(e)Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes.

(f)Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together will constitute one and the same instrument.

***

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

	
				
	Pixelworks, Inc.
	Executive

	By:
	/s/ Richard Sanquini
	By:
	/s/ Stephen Domenik

	Richard Sanquini, Chairman of the Board
	Stephen Domenik

EXHIBIT A
Executive: Stephen Domenik

	
		
	Base Salary:
	For 2016: Annualized amount of $375,000, payable on standard payroll schedules, to be reviewed periodically by the Compensation Committee of the Board of Directors.

	2016 Bonus Plan:
	To be established by the Compensation Committee.

	Equity Award:
	Nonstatutory Stock Option to purchase 43,750 shares at an exercise price equal to 100% of the fair market value of the shares on the grant date, vesting at the end of each calendar month in equal increments over six months subject to continued service as CEO through the relevant vesting date.

	
				
	Pixelworks, Inc.
	Executive

	By:
	/s/ Richard Sanquini
	By:
	/s/ Stephen Domenik

	Richard Sanquini, Chairman of the Board
	Stephen Domenik

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