Document:

Exhibit 10.1

 

GSI TECHNOLOGY, INC.

2017 VARIABLE COMPENSATION PLAN

(Effective as of April 1, 2016)

 

1.             Introduction.  The Company hereby adopts the Plan, effective as of April 1, 2016.  The purpose of the Plan is to encourage performance and achieve retention of a select group of executive employees of GSI Technology, Inc.  This document constitutes the written instrument under which the Plan is maintained.

 

2.             Definitions.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Operating Income” means the Company’s operating income for fiscal 2017, excluding (1) share based compensation, (2) acquisition-related costs and/or the impact of any completed acquisition, (3) patent/IP related litigation costs, (4) purchased intellectual property and (5) any adjustments as deemed necessary by the Committee for 2017.

 

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

 

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

 

“Plan” means the GSI Technology, Inc. 2017 Variable Compensation Plan, as set forth in this document and as hereafter amended.

 

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

 

3.             Variable Compensation Award.

 

(a)           Variable Compensation Award and Calculation of Payable Amount. Each Participant will receive an award, entitling the Participant to earn variable compensation, the payment of which will be based upon (i) the achievement of performance criteria based on Associative Processing Unit (APU) development milestones,  Operating Income and net revenues determined in accordance with US GAAP, or a combination of the three and (ii) continued employment by the Participant through the vesting dates set forth in Section 4 hereof (the “Variable Compensation Award”).  The Committee shall designate in writing the amount payable under the Variable Compensation Award and, if applicable, the percentage of the amount payable under the Variable Compensation Award that is allocable to each of the criteria.  Notwithstanding the foregoing, the maximum amount payable under a Variable Compensation Award granted to any Participant shall not exceed two times the Participant’s target Variable Compensation Award for 2017, unless the Committee, in its sole discretion, decides to permit a greater amount with respect to such Participant based on the performance and condition of the Company’s business. Also, at any time prior to April 1, 2017, the Committee or the CEO, in his, her, or its sole discretion, may reduce the amount payable under any Participant’s Variable Compensation Award.  The amount of the Variable Compensation Award that may become payable to the extent it becomes vested in accordance with the schedule set forth in Section 4 hereof shall be calculated as soon as reasonably practicable following April 1, 2017 based on the extent to which the performance criteria set forth in this Section 3(a) have been achieved (the “Award Payment Amount”).

 

4.             Payment of Variable Compensation Award.

 

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

 

(i)            Sixty percent (60%) of the Participant’s Award Payment Amount shall vest and be payable to the Participant on the last business day in April 2017; and

 

(ii)           Twenty percent (20%) of the Participant’s Award Payment Amount (i.e. fifty percent (50%) of the Award Payment Amount then remaining) shall vest and be payable to the Participant on the last business day in April 2018; and

 

(iii)          Twenty percent (20%) of the Participant’s Award Payment Amount (i.e. one-hundred percent (100%) of the Award Payment Amount then remaining) shall vest and be payable to the Participant on the last business day in April 2019.

 

(b)           Distribution in the Event of Retirement, Termination as a result of Disability or without Cause. If a Participant terminates employment because of Retirement or Disability, or the Company terminates a Participant’s employment without Cause, the Participant shall be entitled to payment of all of his or her Award Payment Amount according to the schedule in Section 4(a), provided that if termination under these conditions occurs prior to April 1, 2017, the amount of the Variable Compensation Award payable will be the Award Payment Amount calculated pursuant to Section 3(a), multiplied by the number of days employee was employed in

 

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Fiscal 2017 by the Company and then divided by 365 days, and all remaining amounts payable under Variable Compensation Award for 2017 shall be forfeited.

 

(c)           Forfeiture. If the Company terminates a Participant’s employment for Cause or if the Participant’s employment is terminated for any reason other than as a result of Retirement or Disability, he or she shall forfeit all or any portion of his or her entire Award Payment Amount for 2017 (as set forth in Section 3(a)) which is not yet vested and payable under the schedule set forth in Section 4(a) as of the date of termination.

 

(d)           Timing of Distribution to a Beneficiary. If a Participant dies while still employed by the Company or after termination due to Retirement, Disability, or termination by the Company without Cause but before receiving a distribution of all of his or her Award Payment Amount according to the schedule in Section 4(a), then the vesting of the Participant’s Award Payment Amount shall be fully accelerated such that one-hundred percent (100%) of the Award Payment Amount, as calculated pursuant to Section 4(b) hereof (with the amount prorated to the date of death in the event death occurs prior to April 1, 2017), will be distributed to his or her beneficiary as a lump sum distribution on the April 30 following the Participant’s death.

 

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

 

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

 

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

 

7.             Amendment or Termination. Through March 31, 2017, the Committee, in its sole and unlimited discretion, may amend or terminate the Plan at any time, without prior notice to any Participant. After April 1, 2017, the Committee may amend or terminate the Plan provided that any such amendment does not reduce or increase any benefit to which a Participant has accrued and is otherwise entitled to under the terms of the Plan, nor accelerate the timing of any payment under the Plan. Notwithstanding the foregoing to the contrary, the Company reserves the right to the extent it deems necessary or advisable, in its sole discretion, to unilaterally alter or modify the Plan and any Variable Compensation Awards made thereunder to ensure that the Plan and Variable Compensation Awards provided to Participants who are U.S. taxpayers are made in such a manner that either qualify for exemption from or comply with Code Section 409A; provided, however, that the Company makes no representations that the Plan or any Variable

 

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Compensation Awards made thereunder will be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to the Plan or any Variable Compensation Awards made thereunder. The Plan shall automatically terminate on the date when no Participant (or beneficiary) has any right to or expectation of payment of further benefits under the Plan.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
GSI   TECHNOLOGY, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Lee-Lean Shu
    	
 
    
	
Name:   Lee-Lean Shu
    	
 
    
	
Title:   Chief Executive Officer
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    	
 
    
			

 

4EX-10.1

 Exhibit 10.1 

{Execution} 
 INTERIM
STOCKHOLDERS’ AGREEMENT 
 This INTERIM STOCKHOLDERS’ AGREEMENT (this “Agreement”), dated as of
June 28, 2016, is entered into by and among (i) Change Healthcare, Inc., a Delaware corporation (“Echo Holdco”), (ii) Change Aggregator, L.P., a Delaware limited partnership (“BX”), (iii) H&F
Echo Holdings, L.P., a Delaware limited partnership (“H&F”), and (iv) the other equityholders of Echo Holdco that becomes a party hereto (together with BX and H&F, each an “Echo Shareholder” and
together, the “Echo Shareholders”). Echo Holdco and the Echo Shareholders shall be referred to herein collectively as the “Parties”. 

RECITALS 
 1. On the date
hereof, the Parties have entered into an Agreement of Contribution and Sale (as amended or modified from time to time in compliance with this Agreement, the “Contribution Agreement”), whereby the Echo Shareholders will directly or
indirectly contribute and/or sell, or cause to be contributed and/or sold, certain equity interests, assets, properties and businesses to PF2 Newco, LLC, a Delaware limited liability company (the “Company”), on the terms and subject
to the conditions set forth in the Contribution Agreement (the “Contributions”). 
 2. The Parties wish to agree to certain
terms and conditions that will govern the actions of the Parties with respect to the Contribution Agreement and the transactions contemplated thereby. 

AGREEMENT 
 Therefore, the
parties hereto hereby agree as follows: 
  

	1.	DEFINITIONS. 

 1.1. Definitions; Construction. Certain terms are used in this
Agreement as specifically defined herein. Capitalized terms used herein but not defined shall have the meanings given to them in the Contribution Agreement. As used in this Agreement, the words “include” and “including,” and
variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.” The section headings of this Agreement are included for reference purposes only and shall not
affect the construction or interpretation of any of the provisions of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of
proof shall arise, or rule of strict construction applied, favoring or disfavoring any of the Parties by virtue of the authorship of any of the provisions of this Agreement. 
  

	2.	REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION. 

 2.1. Representations and
Warranties. Each of the Echo Shareholders hereby represents and warrants (on a several basis, solely as to itself) to Echo Holdco that (a) each of the representations and warranties made by Echo Holdco specifically relating to such Echo
Shareholder contained in Sections 4.01(a)(ii), (b), (c), (d), (e)(i), (v), and (y) of the Contribution Agreement (the “Echo Shareholder Reps”) are true and correct as of the date hereof and (b) each of the Echo Shareholder
Reps will be true and correct in all material respects at and as of the Closing as if made at and as of such time (other than representations and warranties that by their terms address matters only as of another specified time, which shall be true
and correct in all material respects only as of such time). 
 2.2. Indemnification. Each Echo Shareholder shall (on a several and
not joint and several basis) indemnify and hold harmless Echo Holdco and each of other Echo Shareholders and their respective Affiliates, officers, directors, partners, managers, stockholders and members (the “Indemnitees”) free and
harmless from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and out-of-pocket 

 
expenses in connection therewith (including reasonable attorneys’ fees and expenses) (collectively, the “Losses”) incurred or suffered by the Indemnitees or any of them
after the date of this Agreement and prior to the Closing under Section 9.01(b) of the Contribution Agreement as a result of or arising out of any action, cause of action, suit, arbitration or claim arising directly or indirectly out of, or in
any way relating to, without duplication, any breach by such Echo Shareholder of any Echo Shareholder Reps contained in Section 2.1 above or in the Contribution Agreement (disregarding all materiality and Material Adverse Effect
qualifications contained therein). 
  

	3.	AGREEMENTS AMONG THE INVESTORS AND ECHO HOLDCO. 

 3.1. Echo Holdco Shareholder
Representative. Each Echo Shareholder hereby acknowledges and agrees that pursuant to, and accordance with, Section 9.15 of the Contribution Agreement, (a) from the date hereof until the Closing, Echo Holdco has been appointed as the
sole and exclusive agent, proxy and attorney-in-fact for such Echo Shareholder solely for the specific purposes set forth in Section 9.15 of the Contribution Agreement, with full and exclusive power and authority to act on such Echo
Shareholder’s behalf solely for the specific purposes set forth in Section 9.15 of the Contribution Agreement (the “Echo Representative”), and (b) the Echo Representative is authorized, on behalf of such Echo
Shareholder, to take those actions specified in Section 9.15 of the Contribution Agreement. In furtherance of the foregoing, except with respect to individual representations and warranties of any of the Echo Shareholders contained in Article
IV of the Contribution Agreement or any individual covenants and agreements set forth in the Contribution Agreement applicable to such Echo Shareholder, prior to Closing under the Contribution Agreement, if Echo Holdco takes any action, or omits to
take any action specifically set forth in Section 9.15 of the Contribution Agreement, as the Echo Representative or as Echo Holdco under the Contribution Agreement, including making any determination as to (x) whether any of the conditions
to Closing set forth in Article 7 of the Contribution Agreement are or will be, or are not or will not be, satisfied or should be, or should not, be waived and whether to permit or prevent the Closing to occur or (y) whether to terminate the
Agreement for any reason permitted by Article 9 of the Contribution Agreement, and, as a result of such action or omission, any party incurs or suffers Damages under the Contribution Agreement, Echo Holdco will, subject to Section 2.2,
be responsible for any such Damages. 
 3.2. Further Assurances / Regulatory Matters. Subject to the terms and conditions of this
Agreement and the Contribution Agreement, each of the Echo Shareholders shall comply with or otherwise satisfy any covenant, condition or agreement explicitly required to be complied with or satisfied by it pursuant to the Contribution Agreement.

 3.3. No Transfers by the Echo Shareholders. Prior to the Closing, the Echo Shareholders shall not, without the prior consent of
Echo Holdco (or, solely with respect to BX, H&F), (a) directly or indirectly, transfer or cause to be transferred any equity interests it directly or indirectly holds in Echo Holdco, except transfers permitted by, and in accordance with,
Section 4.2 or Article VII of that certain Stockholders’ Agreement, dated as of November 2, 2011, by and among BX, H&F, Echo Holdco and certain other parties thereto, or (b) assign its rights under this Agreement or the
Contribution Agreement except in compliance with Section 9.02 of the Contribution Agreement. 
 3.4. Notices. Prior to the
Closing, Echo Holdco shall promptly (and in any event within 24 hours) provide BX and H&F with any material notice or other material information received in its capacity as the Echo Representative pursuant to Section 9.15 of the
Contribution Agreement. 
  

	4.	MISCELLANEOUS. 

 4.1. Term. This Agreement shall become effective on the date
hereof and shall terminate upon the earlier of (i) the consummation of the Closing, and (ii) the termination of the Contribution Agreement in accordance with Section 9.01 thereof; provided, that (a) Article 4 and
(b) any liability for failure to comply with the terms of this Agreement prior to such termination, in each case, shall survive such termination. 

  
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 4.2. Expenses. If the Closing occurs, all fees and expenses incurred by H&F and its
Affiliates in connection with the preparation, negotiation or execution of this Agreement, the Contribution Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby (including reasonable
fees and expenses of counsel to H&F and its Affiliates) shall be paid by Echo Holdco and be considered Echo Holdco Transaction Expenses for purposes of the Contribution Agreement. If the Closing does not occur for any reason (other than as a
result of a breach of the Contribution Agreement or any other Transaction Document by H&F), all fees and expenses incurred by H&F and its Affiliates in connection with the preparation, negotiation or execution of this Agreement, the
Contribution Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby (including reasonable fees and expenses of counsel to H&F and its Affiliates) shall be paid by Echo Holdco. The fees
and expenses incurred by the other Echo Shareholders in connection with the preparation, negotiation or execution of this Agreement, the Contribution Agreement or the other Transaction Documents or the consummation of the transactions contemplated
hereby or thereby (including reasonable fees and expenses of counsel) shall be paid in accordance with Section 9.08 of the Contribution Agreement. 

4.3. Amendments. No provision of this Agreement may be amended, supplemented, modified or waived in whole or in part at any time
without the prior written consent of Echo Holdco, BX or H&F. 
 4.4. Miscellaneous. Section 9.02,
Section 9.04, Section 9.07, and Section 9.09 through Section 9.14 of the Contribution Agreement are each incorporated herein in their entirety, mutatis mutandis. 

{Remainder of page intentionally left blank} 

  
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 IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or caused this
Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) as of the date first above written. 
  

							
	ECHO HOLDCO:	 		 	CHANGE HEALTHCARE, INC.
				
		 		 	By:	 	   /s/ Gregory T. Stevens

		 		 		 	Name: Gregory T. Stevens
		 		 		 	Title:   General Counsel and Secretary

 {Interim Echo Stockholders’ Agreement Signature Page} 

 ECHO SHAREHOLDERS: 
  

							
	BLACKSTONE:	 		 	CHANGE AGGREGATOR L.P.
				
		 		 	By:	 	Change Aggregator GP L.L.C., its general partner
				
		 		 	By:	 	Blackstone Management Associates VI L.L.C., its managing member
				
		 		 	By:	 	BMA VI L.L.C., its sole member
				
		 		 	By:	 	   /s/ Vikrant Sawhney

		 		 		 	 Name: Vikrant Sawhney
 Title:   Senior
Managing Director

 {Interim Echo Stockholders’ Agreement Signature Page} 

							
	ECHO SHAREHOLDERS:	 	 	 	 	 	 
			
	H&F:	 		 	H&F ECHO HOLDINGS, L.P.
				
		 		 	By:	 	H&F Echo GP, L.L.C., its general partner
				
		 		 	By:	 	Hellman & Friedman Investors VI, L.P., its managing member
				
		 		 	By:	 	Hellman & Friedman LLC, its general partner
				
		 		 	By:	 	   /s/ P.Hunter Philbrick

		 		 		 	Name: P. Hunter Philbrick
		 		 		 	Title:   Managing Director

 {Interim Echo Stockholders’ Agreement Signature Page}

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