Document:

Exhibit 10.92

 

CATALYST SEMICONDUCTOR,
INC.

 

SEVERANCE AGREEMENT

 

This Severance
Agreement (the “Agreement”) is
made and entered into by and between Thomas Gay (“Employee”) and Catalyst Semiconductor, Inc., a Delaware
Corporation (the “Company”),
effective as of August 23, 2005 (the “Effective
Date”).

 

RECITALS

 

1.             It is
expected that the Company from time to time will consider the possibility of an
acquisition by another company or other change of control.  The Board of Directors of the Company (the “Board”) recognizes that such consideration
can be a distraction to Employee and can cause Employee to consider alternative
employment opportunities.  The Board has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication and objectivity
of Employee, notwithstanding the possibility, threat or occurrence of a Change
of Control.

 

2.             The
Board believes that it is in the best interests of the Company and its
stockholders to provide Employee with an incentive to continue his or her
employment and to motivate Employee to maximize the value of the Company for
the benefit of its stockholders.

 

3.             The
Board believes that it is imperative to provide Employee with certain benefits
upon Employee’s termination of employment without cause or following a Change
of Control.  These benefits will provide
Employee with enhanced financial security and incentive and encouragement to
remain with the Company.

 

4.             Certain
capitalized terms used in the Agreement are defined in Section 5 below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual
covenants contained herein, the parties hereto agree as follows:

 

1.             Term
of Agreement.  This Agreement will
terminate upon the date that all of the obligations of the parties hereto with
respect to this Agreement have been satisfied.

 

2.             At-Will
Employment.  The Company and Employee
acknowledge that Employee’s employment is and will continue to be at-will, as
defined under applicable law, except as may otherwise be specifically provided
under the terms of any written formal employment agreement or offer letter
between the Company and Employee (an “Employment
Agreement”).  If Employee’s
employment terminates for any reason, Employee will not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by this
Agreement, including any payments or benefits Employee would otherwise be
entitled to under his or her Employment Agreement.

 

 

3.             Termination
Benefits.

 

(a)           Involuntary
Termination other than for Cause, Death or Disability Prior to a Change of
Control or after Twelve Months Following a Change of Control.  If the Company (or any parent or subsidiary
of the Company employing Employee) terminates Employee’s employment with the Company
(or any parent or subsidiary of the Company) without Employee’s consent and for
a reason other than Cause, Employee becoming Disabled or Employee’s death, any
of which occur prior to a Change of Control or after twelve (12) months
following a Change of Control (any such termination, an “Involuntary
Termination”) and Employee signs, delivers and does not revoke a
separation agreement and release of claims in a form satisfactory to the
Company, then following such termination of employment, or, if later, the
effective date of the separation agreement and release of claims, Employee will
receive the following payments and other benefits from the Company:

 

(i)    Accrued
Compensation.  Employee will be
entitled to receive all accrued vacation, expense reimbursements and any other
benefits due to Employee through the date of termination of employment in
accordance with the Company’s then existing employee benefit plans, policies
and arrangements.

 

(ii)   Consulting
Arrangement.  At the Company’s option, the Company and Employee will enter into a
consulting arrangement for a period of nine (9) months from the date of such
termination the “Consulting Period”),
which arrangement will provide for (A) payment by the Company based upon a
full-time monthly rate equal to 100% of Employee’s monthly base salary as of
the date of such termination and (B) such other terms of service as shall be
negotiated in good faith by the Company and Employee; provided, however, that
if the Company determines not to enter into the negotiation of a consulting
arrangement, or the Company and Employee cannot, following good-faith
negotiation, agree upon the terms of such consulting arrangement, then promptly
following such determination or the termination of such negotiations, as the
case may be, Employee
will be paid a lump-sum amount of cash equal to nine (9) months of Employee’s
base salary as of the date of
such termination, less applicable withholding; provided further,
however, that if during the Consulting Period Employee engages in Competition
or breaches the covenants in Section 6 or in the separation agreement and
release of claims, all payments pursuant to this subsection will immediately
cease.

 

(iii)  Continued
Employee Benefits.  Employee will
receive continuing Company-paid coverage for a period of nine (9) months
following such termination for Employee and Employee’s eligible dependents
under the Company’s Benefit Plans; provided, however, that if during such
period Employee engages in Competition or breaches the covenants in Section 6
or in the separation agreement and release of claims, all Company-paid coverage
pursuant to this subsection will immediately cease.

 

(iv)  Options.  With respect to all of Employee’s options (the “Options”)
to purchase Company common stock outstanding on the date of such termination
(whether granted on, before or after the date of this Agreement), Employee will
have the period following such termination of employment to exercise such
Options that is specified in the stock
plans, if any, under which the Options were granted and in any applicable
agreements between the Company and 

 

2

 

Employee; provided, however, to the extent
that, pursuant to the provisions of such stock plans and applicable agreements,
such Options continue to vest during the period, if any, that Employee provides
consulting services to the Company pursuant to Section 3(a)(ii) or otherwise,
then Employee will have the period following the termination of such consulting
services to exercise such Options that is specified in such stock plans and applicable agreements;
provided further, however, that all Options will immediately terminate and
Employee will have no further rights with respect to such Options in the event
Employee engages in Competition or breaches the covenants in Section 6 or
in the separation agreement and release of claims during such period.  In
all other respects, such Options will continue to be subject to the terms and
conditions of the stock plans, if any, under which they were granted and any
applicable agreements between the Company and Employee.

 

(v)   Payments or
Benefits Required by Law.  Employee
will receive such other compensation or benefits from the Company as may be
required by law (for example, “COBRA” coverage under Section 4980B of the
Internal Revenue Code of 1986, as amended (the “Code”)).

 

(b)           Involuntary
Termination other than for Cause, Death or Disability or Termination for Good
Reason within Twelve Months of a Change of Control.  If (i) within twelve (12) months following a
Change of Control (A) Employee terminates his or her employment with the
Company (or any parent or subsidiary of the Company) for Good Reason or (B) the
Company (or any parent or subsidiary of the Company) terminates Employee’s employment
for other than Cause, Employee becoming Disabled or Employee’s death (any such
termination, a “Change of Control Termination”) and
(ii) Employee signs, delivers and does not revoke a separation agreement and
release of claims in a form satisfactory to the Company, then promptly
following such termination of employment, or, if later, the effective date of
the separation agreement and release of claims, Employee will receive the
following payments and other benefits from the Company:

 

(i)    Accrued Compensation.  Employee will be entitled to receive all
accrued vacation, expense reimbursements and any other benefits due to Employee
through the date of termination of employment in accordance with the Company’s
then existing employee benefit plans, policies and arrangements.

 

(ii)   Consulting
Arrangement.  At the Company’s option, the Company and Employee will enter into a
consulting arrangement for a period of twelve (12) months from the date of such
termination (the “Change of Control
Consulting Period”), which
arrangement will provide for (A) payment by the Company based upon a full-time
monthly rate equal to 100% of Employee’s monthly base salary as of the date of
such termination and (B) such other terms of service as shall be negotiated in
good faith by the Company and Employee; provided, however, that if the Company
determines not enter into the negotiation of a consulting arrangement, or if
the Company and Employee cannot, following good-faith negotiation, agree upon
the terms of such consulting arrangement, then promptly following such
determination or the termination of such negotiations, as the case may be, Employee will be paid a lump-sum amount of
cash equal to twelve (12)
months of Employee’s base salary as of the date of such termination, less applicable
withholding; provided further,
however, that if during the Change of Control Consulting Period Employee
engages in Competition or breaches the covenants in Section 6 or in the
separation agreement and release of claims, all payments pursuant to this
subsection will immediately cease.

 

3

 

(iii)  Options
and Restricted Stock.  100% of the
unvested shares subject to all of
Employee’s Options and 100% any of Employee’s shares of Company common stock
subject to a Company repurchase right upon Employee’s termination of employment
for any reason (the “Restricted Stock”)
whether acquired by Employee on, before or after the date of this Agreement,
will immediately vest upon such termination. 
With respect to all of
Employee’s Options outstanding on the date of such termination (whether
granted on, before or after the date of this Agreement), Employee will have the
period following such termination of employment to exercise such Options that
is specified in the stock plans, if
any, under which the Options were granted and in any applicable agreements
between the Company and Employee; provided, however, that all Options
will immediately terminate and Employee will have no further rights with
respect to such Options in the event Employee engages in Competition or
breaches the covenants in Section 6 or in the separation agreement and
release of claims during such period.  In all other respects, such Options will
continue to be subject to the terms and conditions of the stock plans, if any,
under which they were granted and any applicable agreements between the Company
and Employee.

 

(iv)  Continued
Employee Benefits.  Employee will
receive continuing Company-paid coverage for a period of twelve (12) months following such termination for
Employee and Employee’s eligible dependents under the Company’s Benefit Plans;
provided, however, that if during such period Employee engages in Competition
or breaches the covenants in Section 6 or in the separation agreement and
release of claims, all Company-paid coverage pursuant to this subsection will
immediately cease.

 

(v)   Payments or
Benefits Required by Law.  Employee
will receive such other compensation or benefits from the Company as may be
required by law (for example, “COBRA” coverage under Section 4980B of the
Code).

 

(c)           Other
Terminations.  If Employee
voluntarily terminates Employee’s employment with the Company or any parent or
subsidiary of the Company (other than for Good Reason within twelve (12) months
of a Change of Control) or if the Company (or any parent or subsidiary of the
Company employing Employee) terminates Employee employment with the Company (or
any parent or subsidiary of the Company) for Cause, then Employee will
(i) receive his or her earned but unpaid base salary through the date of
termination of employment, (ii) receive all accrued vacation, expense
reimbursements and any other benefits due to Employee through the date of
termination of employment in accordance with established Company plans, policies
and arrangements, and (iii) not be entitled to any other compensation or
benefits (including, without limitation, accelerated vesting of Options or
Restricted Stock) from the Company except to the extent provided under the
applicable stock option agreement(s) or as may be required by law (for example,
“COBRA” coverage under Section 4980B of the Code).

 

(d)           Termination
due to Death or Disability.  If
Employee’s employment with the Company (or any parent or subsidiary of the
Company) is terminated due to Employee’s death or Employee’s becoming Disabled,
then Employee or Employee’s estate (as the case may be) will (i) receive
the earned but unpaid base salary through the date of termination of
employment, (ii) receive all accrued vacation, expense reimbursements and
any other benefits due to Employee through the date of termination of
employment in accordance with Company-provided or paid plans, policies and
arrangements, and (iii) not be entitled to any other compensation or
benefits from the 

 

4

 

Company except to the extent required by law (for example, “COBRA”
coverage under Section 4980B of the Code).

 

(e)           Exclusive
Remedy.  In the event of a
termination of Employee’s employment with the Company (or any parent or
subsidiary of the Company), the provisions of this Section 3 are intended to be
and are exclusive and in lieu of any other rights or remedies to which Employee
or the Company may otherwise be entitled (including any contrary provisions in
the Employment Agreement), whether at law, tort or contract, in equity, or
under this Agreement.  Employee will be
entitled to no benefits, compensation or other payments or rights upon
termination of employment other than those benefits expressly set forth in this
Section 3.

 

4.             Limitation
on Payments.  In the event that the
severance and other benefits provided for in this Agreement or otherwise
payable to Employee (i) constitute “parachute payments” within the meaning of
Section 280G of the Code and (ii) but for this Section 4, would be subject to
the excise tax imposed by Section 4999 of the Code, then Employee’s severance
benefits under Section 4(a)(i) will be either:

 

(a)           delivered in full, or

 

(b)                                 delivered as to such lesser extent
which would result in no portion of such severance benefits being subject to
excise tax under Section 4999 of the Code,

 

whichever
of the foregoing amounts, taking into account the applicable federal, state and
local income taxes and the excise tax imposed by Section 4999, results in the receipt
by Employee on an after-tax basis, of the greatest amount of severance
benefits, notwithstanding that all or some portion of such severance benefits
may be taxable under Section 4999 of the Code. 
Unless the Company and Employee otherwise agree in writing, any
determination required under this Section 4 will be made in writing by the
Company’s independent public accountants immediately prior to Change of Control
(the “Accountants”), whose
determination will be conclusive and binding upon Employee and the Company for
all purposes.  For purposes of making the
calculations required by this Section 4, 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 Employee will 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 will
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 4.

 

5.             Definition
of Terms.  The following terms
referred to in this Agreement will have the following meanings:

 

(a)           Benefit
Plans.  “Benefit Plans” means plans, policies or arrangements that the
Company sponsors (or participates in) and that immediately prior to Employee’s
termination of employment provide Employee and/or Employee’s eligible dependents
with medical, dental, and/or vision benefits. 
Benefit Plans do not include any other type of benefit (including, but
not by way of limitation, disability, life insurance or retirement benefits).  A requirement that the Company provide
Employee and Employee’s 

 

5

 

eligible dependents with coverage under the Benefit Plans will not be
satisfied unless the coverage is no less favorable than that provided to
Employee and Employee’s eligible dependents immediately prior to Employee’s
termination of employment. 
Notwithstanding any contrary provision of this Section 5(a), but subject
to the immediately preceding sentence, the Company may, at its option, satisfy
any requirement that the Company provide coverage under any Benefit Plan by (i) reimbursing Employee’s premiums under
COBRA after Employee has properly elected continuation coverage under COBRA (in
which case Employee will be solely responsible for electing such coverage for
Employee and Employee’s eligible dependents), or (ii) instead providing
coverage under a separate plan or plans providing coverage that is no less
favorable or by paying Employee a lump sum payment sufficient to provide
Employee and Employee’s eligible dependents with equivalent coverage under a
third party plan that is reasonably available to Employee and Employee’s
eligible dependents.

 

(b)           Cause.  “Cause”
means (i) a willful failure by Employee to substantially perform Employee’s
duties as an employee, other than a failure resulting from the Employee’s
complete or partial incapacity due to physical or mental illness or impairment,
(ii) a willful act by Employee that constitutes gross misconduct and that is
injurious to the Company, (iii) circumstances where Employee willfully imparts
material confidential information relating to the Company or its business to
competitors or to other third parties other than in the course of carrying out
Employee’s duties, (iv) a material and willful violation by Employee of a
federal or state law or regulation applicable to the business of the Company
that is injurious to the Company,
or (v) Employee’s conviction or plea of guilty or no contest to a felony, which the Company reasonably believes has or
will negatively reflect on the Company’s business or reputation.  No act or failure to act by Employee will be
considered “willful” unless committed without good faith and without a
reasonable belief that the act or omission was in the Company’s best interest.

 

(c)           Change
of Control.  “Change of Control” means the occurrence of
any of the following:

 

(i)    the sale, lease,
conveyance or other disposition of all or substantially all of the Company’s
assets to any “person” (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended), entity or group of persons acting in
concert;

 

(ii)   any person or
group of persons becoming the “beneficial owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company’s
then outstanding voting securities;

 

(iii)  a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity or its controlling entity) at least 50% of the total voting
power represented by the voting securities of the Company or such surviving entity
(or its controlling entity) outstanding immediately after such merger or
consolidation; or

 

(iv)  a contest for the
election or removal of members of the Board that results in the removal from
the Board of at least 50% of the incumbent members of the Board.

 

6

 

(d)           Competition.  “Competition”
will mean Employee’s direct or indirect engagement in (whether as an employee,
consultant, agent, proprietor, principal, partner, stockholder, corporate
officer, director or otherwise), or ownership interest in or participation in
the financing, operation, management or control of, any person, firm,
corporation or business that competes with Company or is a customer of the
Company.

 

(e)           Disability.  “Disability”
will mean that Employee has been unable to perform the principal functions of
Employee’s duties due to a physical or mental impairment, but only if such
inability has lasted or is reasonably expected to last for at least six
months.  Whether Employee has a Disability
will be determined by the Board based on evidence provided by one or more
physicians selected by the Board.

 

(f)            Good
Reason.  “Good Reason” means (without Employee’s consent) (i) a
material reduction in Employee’s title, authority, status, or responsibilities,
(ii) the reduction of Employee’s aggregate base salary and target bonus
opportunity as in effect immediately prior to such reduction (other than a
reduction applicable to executives generally), or (iii) a relocation of
Employee’s principal place of employment by more than fifty (50) miles.

 

6.             Non-Solicitation.  For a period beginning on the Effective Date
and ending six (6) months after Employee ceases to be employed by the Company
(the “Non-Solicitation Period”), Employee,
directly or indirectly, whether as employee, owner, sole proprietor, partner,
director, member, consultant, agent, founder, co-venturer or otherwise, will
not: (i) solicit, induce or influence any person to leave employment with
the Company; or (ii) directly or indirectly solicit business from any of
the Company’s customers and users on behalf of any business that directly
competes with the principal business of the Company; provided, however, that
the Non-Solicitation Period shall end nine (9) months after Employee ceases to
be employed by the Company in the event Employee’s employment is terminated
pursuant to an Involuntary Termination; provided further, however, that the
Non-Solicitation Period shall end twelve (12)
months after Employee ceases to be employed by the Company in the event Employee’s
employment is terminated pursuant to a Change of Control Termination.

 

7.             Successors.

 

(a)           The
Company’s Successors.  Any successor
to the Company (whether direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets will assume the obligations under this
Agreement and agree expressly to perform the 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” will include any
successor to the Company’s business and/or assets which executes and delivers
the assumption agreement described in this Section 7(a) or which becomes bound
by the terms of this Agreement by operation of law.

 

(b)           The
Employee’s Successors.  The terms of
this Agreement and all rights of Employee hereunder will inure to the benefit
of, and be enforceable by, Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

 

7

 

8.             Notice.

 

(a)           General.  Notices and all other communications
contemplated by this Agreement will be in writing and will 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 Employee, mailed notices will
be addressed to him or her at the home address which he or she most recently
communicated to the Company in writing. 
In the case of the Company, mailed notices will be addressed to its
corporate headquarters, and all notices will be directed to the attention of
its President.

 

(b)           Notice
of Termination.  Any termination by
the Company for Cause or by Employee for Good Reason or as a result of a
voluntary resignation will be communicated by a notice of termination to the
other party hereto given in accordance with Section 8(a) of this
Agreement.  Such notice will indicate the
specific termination provision in this Agreement relied upon, will set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and will specify the termination
date (which will be not more than thirty (30) days after the giving of such
notice).  The failure by Employee to
include in the notice any fact or circumstance which contributes to a showing
of Good Reason will not waive any right of Employee hereunder or preclude
Employee from asserting such fact or circumstance in enforcing his or her
rights hereunder.

 

9.             Miscellaneous
Provisions.

 

(a)           Code
Section 409A.  This Agreement will be
deemed amended to the extent necessary to avoid imposition of any additional
tax or income recognition under Code Section 409A and any temporary or final
Treasury Regulations and guidance promulgated thereunder prior to any payment
to Employee.

 

(b)           No Duty
to Mitigate.  Employee will not be
required to mitigate the amount of any payment contemplated by this Agreement,
nor will any such payment be reduced by any earnings that Employee may receive
from any other source.

 

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

 

(d)           Headings.  All captions and section headings used in
this Agreement are for convenient reference only and do not form a part of this
Agreement.

 

(e)           Entire
Agreement.  This Agreement
constitutes the entire agreement of the parties hereto and supersedes in their
entirety all prior representations, understandings, undertakings or agreements
(whether oral or written and whether expressed or implied) of the parties with
respect to the subject matter hereof, including (without limitation) the
Employment Agreement).  No future
agreements between the Company and Employee may supersede this Agreement,
unless they are in writing and specifically mention this Section 9(e).

 

8

 

(f)            Choice
of Law.  The laws of the State of
California (without reference to its choice of laws provisions) will govern the
validity, interpretation, construction and performance of this Agreement.

 

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

 

(h)           Withholding.  All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

 

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

 

[Remainder of Page Intentionally Left Blank]

 

9

 

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 set forth below.

 

	
  COMPANY

  	
  CATALYST SEMICONDUCTOR,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gelu Voicu

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  EXECUTIVE

  	
  Thomas Gay

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas Gay

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Vice President, Finance and Administration and
  

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
						

 

10Exhibit 10.93

 

CATALYST SEMICONDUCTOR, INC.

 

SEVERANCE AGREEMENT

 

This Severance
Agreement (the “Agreement”) is
made and entered into by and between Sorin Georgescu (“Employee”) and Catalyst Semiconductor, Inc.,
a Delaware Corporation (the “Company”),
effective as of August 23, 2005 (the “Effective
Date”).

 

RECITALS

 

1.             It is expected that the Company from time to time
will consider the possibility of an acquisition by another company or other
change of control.  The Board of
Directors of the Company (the “Board”)
recognizes that such consideration can be a distraction to Employee and can
cause Employee to consider alternative employment opportunities.  The Board has determined that it is in the
best interests of the Company and its stockholders to assure that the Company
will have the continued dedication and objectivity of Employee, notwithstanding
the possibility, threat or occurrence of a Change of Control.

 

2.             The Board believes that it is in the best
interests of the Company and its stockholders to provide Employee with an
incentive to continue his or her employment and to motivate Employee to
maximize the value of the Company for the benefit of its stockholders.

 

3.             The Board believes that it is imperative to
provide Employee with certain benefits upon Employee’s termination of
employment without cause or following a Change of Control.  These benefits will provide Employee with
enhanced financial security and incentive and encouragement to remain with the
Company.

 

4.             Certain capitalized terms used in the Agreement
are defined in Section 5 below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:

 

1.             Term of Agreement.  This
Agreement will terminate upon the date that all of the obligations of the
parties hereto with respect to this Agreement have been satisfied.

 

2.             At-Will Employment.  The
Company and Employee acknowledge that Employee’s employment is and will
continue to be at-will, as defined under applicable law, except as may otherwise
be specifically provided under the terms of any written formal employment
agreement or offer letter between the Company and Employee (an “Employment Agreement”).  If Employee’s employment terminates for any
reason, Employee will not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement, including any
payments or benefits Employee would otherwise be entitled to under his or her
Employment Agreement.

 

 

3.             Termination Benefits.

 

(a)           Involuntary
Termination other than for Cause, Death or Disability Prior to a Change of
Control or after Twelve Months Following a Change of Control.  If the Company (or any parent or subsidiary
of the Company employing Employee) terminates Employee’s employment with the
Company (or any parent or subsidiary of the Company) without Employee’s consent
and for a reason other than Cause, Employee becoming Disabled or Employee’s
death, any of which occur prior to a Change of Control or after twelve (12) months
following a Change of Control (any such termination, an “Involuntary
Termination”) and Employee signs, delivers and does not revoke a
separation agreement and release of claims in a form satisfactory to the
Company, then following such termination of employment, or, if later, the
effective date of the separation agreement and release of claims, Employee will
receive the following payments and other benefits from the Company:

 

(i)    Accrued
Compensation.  Employee will be
entitled to receive all accrued vacation, expense reimbursements and any other
benefits due to Employee through the date of termination of employment in
accordance with the Company’s then existing employee benefit plans, policies
and arrangements.

 

(ii)   Consulting
Arrangement.  At the Company’s option, the Company and Employee will enter into a
consulting arrangement for a period of six (6) months from the date of
such termination the “Consulting Period”),
which arrangement will provide for (A) payment by the Company based upon a
full-time monthly rate equal to 100% of Employee’s monthly base salary as of
the date of such termination and (B) such other terms of service as shall
be negotiated in good faith by the Company and Employee; provided, however,
that if the Company determines not to enter into the negotiation of a
consulting arrangement, or the Company and Employee cannot, following
good-faith negotiation, agree upon the terms of such consulting arrangement,
then promptly following such determination or the termination of such
negotiations, as the case may be, Employee will be paid a lump-sum amount of
cash equal to six (6) months of Employee’s base salary as of the date of
such termination, less applicable withholding; provided further, however, that
if during the Consulting Period Employee engages in Competition or
breaches the covenants in Section 6 or in the separation agreement and
release of claims, all payments pursuant to this subsection will
immediately cease.

 

(iii)  Continued
Employee Benefits.  Employee will
receive continuing Company-paid coverage for a period of six (6) months
following such termination for Employee and Employee’s eligible dependents
under the Company’s Benefit Plans; provided, however, that if during such
period Employee engages in Competition or breaches the covenants in Section 6
or in the separation agreement and release of claims, all Company-paid coverage
pursuant to this subsection will immediately cease.

 

(iv)  Options.  With respect to all of Employee’s options (the “Options”)
to purchase Company common stock outstanding on the date of such termination
(whether granted on, before or after the date of this Agreement), Employee will
have the period following such termination of employment to exercise such
Options that is specified in the stock
plans, if any, under which the Options were granted and in any applicable
agreements between the Company and 

 

2

 

Employee; provided, however, to the extent
that, pursuant to the provisions of such stock plans and applicable agreements,
such Options continue to vest during the period, if any, that Employee provides
consulting services to the Company pursuant to Section 3(a)(ii) or
otherwise, then Employee will have the period following the termination of such
consulting services to exercise such Options that is specified in such stock plans and applicable agreements;
provided further, however, that all Options will immediately terminate and
Employee will have no further rights with respect to such Options in the event
Employee engages in Competition or breaches the covenants in Section 6 or
in the separation agreement and release of claims during such period.  In
all other respects, such Options will continue to be subject to the terms and
conditions of the stock plans, if any, under which they were granted and any
applicable agreements between the Company and Employee.

 

(v)   Payments
or Benefits Required by Law. 
Employee will receive such other compensation or benefits from the
Company as may be required by law (for example, “COBRA” coverage under Section 4980B
of the Internal Revenue Code of 1986, as amended (the “Code”)).

 

(b)           Involuntary Termination other than for Cause,
Death or Disability or Termination for Good Reason within Twelve Months of a
Change of Control.  If (i) within
twelve (12) months following a Change of Control (A) Employee terminates
his or her employment with the Company (or any parent or subsidiary of the
Company) for Good Reason or (B) the Company (or any parent or subsidiary
of the Company) terminates Employee’s employment for other than Cause, Employee
becoming Disabled or Employee’s death (any such termination, a “Change of Control Termination”) and (ii) Employee
signs, delivers and does not revoke a separation agreement and release of
claims in a form satisfactory to the Company, then promptly following such
termination of employment, or, if later, the effective date of the separation
agreement and release of claims, Employee will receive the following payments
and other benefits from the Company:

 

(i)    Accrued
Compensation.  Employee will be
entitled to receive all accrued vacation, expense reimbursements and any other
benefits due to Employee through the date of termination of employment in
accordance with the Company’s then existing employee benefit plans, policies
and arrangements.

 

(ii)   Consulting
Arrangement.  At the Company’s option, the Company and Employee will enter into a
consulting arrangement for a period of nine (9) months from the date of
such termination (the “Change of Control
Consulting Period”), which
arrangement will provide for (A) payment by the Company based upon a
full-time monthly rate equal to 100% of Employee’s monthly base salary as of
the date of such termination and (B) such other terms of service as shall
be negotiated in good faith by the Company and Employee; provided, however,
that if the Company determines not enter into the negotiation of a consulting
arrangement, or if the Company and Employee cannot, following good-faith
negotiation, agree upon the terms of such consulting arrangement, then promptly
following such determination or the termination of such negotiations, as the
case may be, Employee will be paid a lump-sum amount of cash equal to nine (9) months
of Employee’s base salary as of the date of such termination, less applicable
withholding; provided further, however, that if during the Change of Control
Consulting Period Employee engages in Competition or breaches the covenants in Section 6
or in the separation agreement and release of claims, all payments pursuant to
this subsection will immediately cease.

 

3

 

(iii)  Options
and Restricted Stock.  100% of the
unvested shares subject to all of
Employee’s Options and 100% any of Employee’s shares of Company common stock
subject to a Company repurchase right upon Employee’s termination of employment
for any reason (the “Restricted Stock”)
whether acquired by Employee on, before or after the date of this Agreement,
will immediately vest upon such termination. 
With respect to all of
Employee’s Options outstanding on the date of such termination (whether
granted on, before or after the date of this Agreement), Employee will have the
period following such termination of employment to exercise such Options that
is specified in the stock plans, if
any, under which the Options were granted and in any applicable agreements
between the Company and Employee; provided, however, that all Options
will immediately terminate and Employee will have no further rights with
respect to such Options in the event Employee engages in Competition or
breaches the covenants in Section 6 or in the separation agreement and
release of claims during such period.  In all other respects, such Options will
continue to be subject to the terms and conditions of the stock plans, if any,
under which they were granted and any applicable agreements between the Company
and Employee.

 

(iv)  Continued
Employee Benefits.  Employee will
receive continuing Company-paid coverage for a period of nine (9) months following such termination
for Employee and Employee’s eligible dependents under the Company’s Benefit
Plans; provided, however, that if during such period Employee engages in
Competition or breaches the covenants in Section 6 or in the separation
agreement and release of claims, all Company-paid coverage pursuant to this subsection will
immediately cease.

 

(v)   Payments
or Benefits Required by Law. 
Employee will receive such other compensation or benefits from the
Company as may be required by law (for example, “COBRA” coverage under Section 4980B
of the Code).

 

(c)           Other Terminations.  If
Employee voluntarily terminates Employee’s employment with the Company or any
parent or subsidiary of the Company (other than for Good Reason within twelve
(12) months of a Change of Control) or if the Company (or any parent or
subsidiary of the Company employing Employee) terminates Employee employment
with the Company (or any parent or subsidiary of the Company) for Cause, then
Employee will (i) receive his or her earned but unpaid base salary through
the date of termination of employment, (ii) receive all accrued vacation,
expense reimbursements and any other benefits due to Employee through the date
of termination of employment in accordance with established Company plans,
policies and arrangements, and (iii) not be entitled to any other
compensation or benefits (including, without limitation, accelerated vesting of
Options or Restricted Stock) from the Company except to the extent provided
under the applicable stock option agreement(s) or as may be required by law
(for example, “COBRA” coverage under Section 4980B of the Code).

 

(d)           Termination due to Death or Disability.  If
Employee’s employment with the Company (or any parent or subsidiary of the
Company) is terminated due to Employee’s death or Employee’s becoming Disabled,
then Employee or Employee’s estate (as the case may be) will (i) receive
the earned but unpaid base salary through the date of termination of
employment, (ii) receive all accrued vacation, expense reimbursements and
any other benefits due to Employee through the date of termination of
employment in accordance with Company-provided or paid plans, policies and
arrangements, and (iii) not be entitled to any other compensation or
benefits from the 

 

4

 

Company except to the extent required by law (for
example, “COBRA” coverage under Section 4980B of the Code).

 

(e)           Exclusive
Remedy.  In the event of a
termination of Employee’s employment with the Company (or any parent or subsidiary
of the Company), the provisions of this Section 3 are intended to be and
are exclusive and in lieu of any other rights or remedies to which Employee or
the Company may otherwise be entitled (including any contrary provisions in the
Employment Agreement), whether at law, tort or contract, in equity, or under
this Agreement.  Employee will be
entitled to no benefits, compensation or other payments or rights upon
termination of employment other than those benefits expressly set forth in this
Section 3.

 

4.             Limitation on Payments.  In the
event that the severance and other benefits provided for in this Agreement or
otherwise payable to Employee (i) constitute “parachute payments” within
the meaning of Section 280G of the Code and (ii) but for this Section 4,
would be subject to the excise tax imposed by Section 4999 of the Code,
then Employee’s severance benefits under Section 4(a)(i) will be
either:

 

(a)           delivered in full, or

 

(b)           delivered as to such lesser extent which would result
in no portion of such severance benefits being subject to excise tax under Section 4999
of the Code,

 

whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by Employee on an
after-tax basis, of the greatest amount of severance benefits, notwithstanding
that all or some portion of such severance benefits may be taxable under Section 4999
of the Code.  Unless the Company and
Employee otherwise agree in writing, any determination required under this Section 4
will be made in writing by the Company’s independent public accountants
immediately prior to Change of Control (the “Accountants”),
whose determination will be conclusive and binding upon Employee and the
Company for all purposes.  For purposes
of making the calculations required by this Section 4, 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 Employee will 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 will bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this Section 4.

 

5.             Definition of Terms.  The
following terms referred to in this Agreement will have the following meanings:

 

(a)           Benefit
Plans.  “Benefit Plans” means plans, policies or arrangements that the
Company sponsors (or participates in) and that immediately prior to Employee’s
termination of employment provide Employee and/or Employee’s eligible
dependents with medical, dental, and/or vision benefits.  Benefit Plans do not include any other type
of benefit (including, but not by way of limitation, disability, life insurance
or retirement benefits).  A requirement
that the Company provide Employee and Employee’s eligible dependents with
coverage under the Benefit Plans will not be satisfied unless the coverage is
no less favorable than that provided to Employee and Employee’s 

 

5

 

eligible dependents
immediately prior to Employee’s termination of employment.  Notwithstanding any contrary provision of
this Section 5(a), but subject to the immediately preceding sentence, the
Company may, at its option, satisfy any requirement that the Company provide
coverage under any Benefit Plan by (i) reimbursing Employee’s premiums under COBRA after Employee has
properly elected continuation coverage under COBRA (in which case Employee will
be solely responsible for electing such coverage for Employee and Employee’s
eligible dependents), or (ii) instead providing coverage under a
separate plan or plans providing coverage that is no less favorable or by
paying Employee a lump sum payment sufficient to provide Employee and Employee’s
eligible dependents with equivalent coverage under a third party plan that is
reasonably available to Employee and Employee’s eligible dependents.

 

(b)           Cause.  “Cause”
means (i) a willful failure by Employee to substantially perform Employee’s
duties as an employee, other than a failure resulting from the Employee’s
complete or partial incapacity due to physical or mental illness or impairment,
(ii) a willful act by Employee that constitutes gross misconduct and that
is injurious to the Company, (iii) circumstances where Employee willfully
imparts material confidential information relating to the Company or its
business to competitors or to other third parties other than in the course of
carrying out Employee’s duties, (iv) a material and willful violation by
Employee of a federal or state law or regulation applicable to the business of
the Company that is injurious to the Company,
or (v) Employee’s conviction or plea of guilty or no contest to a felony, which the Company reasonably believes has or
will negatively reflect on the Company’s business or reputation.  No act or failure to act by Employee will be
considered “willful” unless committed without good faith and without a
reasonable belief that the act or omission was in the Company’s best interest.

 

(c)           Change
of Control.  “Change of Control” means the occurrence of
any of the following:

 

(i)    the
sale, lease, conveyance or other disposition of all or substantially all of the
Company’s assets to any “person” (as such term is used in Section 13(d) of
the Securities Exchange Act of 1934, as amended), entity or group of persons
acting in concert;

 

(ii)   any
person or group of persons becoming the “beneficial owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company’s
then outstanding voting securities;

 

(iii)  a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity or its controlling entity) at least 50% of the total voting
power represented by the voting securities of the Company or such surviving
entity (or its controlling entity) outstanding immediately after such merger or
consolidation; or

 

(iv)  a
contest for the election or removal of members of the Board that results in the
removal from the Board of at least 50% of the incumbent members of the Board.

 

6

 

(d)           Competition.  “Competition”
will mean Employee’s direct or indirect engagement in (whether as an employee, consultant, agent, proprietor, principal,
partner, stockholder, corporate officer, director or otherwise), or ownership
interest in or participation in the financing, operation, management or control
of, any person, firm, corporation or business that competes with Company or is
a customer of the Company.

 

(e)           Disability.  “Disability”
will mean that Employee has been unable to perform the principal functions of
Employee’s duties due to a physical or mental impairment, but only if such
inability has lasted or is reasonably expected to last for at least six
months.  Whether Employee has a
Disability will be determined by the Board based on evidence provided by one or
more physicians selected by the Board.

 

(f)            Good
Reason.  “Good Reason” means (without Employee’s consent) (i) a
material reduction in Employee’s title, authority, status, or responsibilities,
(ii) the reduction of Employee’s aggregate base salary and target bonus
opportunity as in effect immediately prior to such reduction (other than a
reduction applicable to executives generally), or (iii) a relocation of
Employee’s principal place of employment by more than fifty (50) miles.

 

6.             Non-Solicitation.  For a period beginning on the
Effective Date and ending six (6) months after Employee ceases to be
employed by the Company (the “Non-Solicitation Period”),
Employee, directly or indirectly, whether as employee, owner, sole proprietor,
partner, director, member, consultant, agent, founder, co-venturer or
otherwise, will not: (i) solicit, induce or influence any person to leave
employment with the Company; or (ii) directly or indirectly solicit business
from any of the Company’s customers and users on behalf of any business that
directly competes with the principal business of the Company; provided,
however, that the Non-Solicitation Period shall end six (6) months after
Employee ceases to be employed by the Company in the event Employee’s
employment is terminated pursuant to an Involuntary Termination; provided
further, however, that the Non-Solicitation Period shall end nine (9) months after Employee ceases to be employed by the
Company in the event Employee’s employment is terminated pursuant to a Change
of Control Termination.

 

7.             Successors.

 

(a)           The
Company’s Successors.  Any successor
to the Company (whether direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets will assume the obligations under this
Agreement and agree expressly to perform the 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” will include any
successor to the Company’s business and/or assets which executes and delivers
the assumption agreement described in this Section 7(a) or which
becomes bound by the terms of this Agreement by operation of law.

 

(b)           The
Employee’s Successors.  The terms of
this Agreement and all rights of Employee hereunder will inure to the benefit
of, and be enforceable by, Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

 

7

 

8.             Notice.

 

(a)           General.  Notices and all other communications
contemplated by this Agreement will be in writing and will 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 Employee, mailed notices will
be addressed to him or her at the home address which he or she most recently
communicated to the Company in writing. 
In the case of the Company, mailed notices will be addressed to its
corporate headquarters, and all notices will be directed to the attention of its
President.

 

(b)           Notice
of Termination.  Any termination by
the Company for Cause or by Employee for Good Reason or as a result of a
voluntary resignation will be communicated by a notice of termination to the
other party hereto given in accordance with Section 8(a) of this
Agreement.  Such notice will indicate the
specific termination provision in this Agreement relied upon, will set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and will specify the termination
date (which will be not more than thirty (30) days after the giving of such
notice).  The failure by Employee to
include in the notice any fact or circumstance which contributes to a showing
of Good Reason will not waive any right of Employee hereunder or preclude
Employee from asserting such fact or circumstance in enforcing his or her
rights hereunder.

 

9.             Miscellaneous Provisions.

 

(a)           Code
Section 409A.  This Agreement will
be deemed amended to the extent necessary to avoid imposition of any additional
tax or income recognition under Code Section 409A and any temporary or
final Treasury Regulations and guidance promulgated thereunder prior to any
payment to Employee.

 

(b)           No
Duty to Mitigate.  Employee will not
be required to mitigate the amount of any payment contemplated by this
Agreement, nor will any such payment be reduced by any earnings that Employee
may receive from any other source.

 

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

 

(d)           Headings.  All captions and section headings used
in this Agreement are for convenient reference only and do not form a part of
this Agreement.

 

(e)           Entire
Agreement.  This Agreement
constitutes the entire agreement of the parties hereto and supersedes in their
entirety all prior representations, understandings, undertakings or agreements
(whether oral or written and whether expressed or implied) of the parties with
respect to the subject matter hereof, including (without limitation) the
Employment Agreement).  No future
agreements between the Company and Employee may supersede this Agreement,
unless they are in writing and specifically mention this Section 9(e).

 

8

 

(f)            Choice
of Law.  The laws of the State of
California (without reference to its choice of laws provisions) will govern the
validity, interpretation, construction and performance of this Agreement.

 

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

 

(h)           Withholding.  All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

 

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

 

[Remainder of Page Intentionally
Left Blank]

 

9

 

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 set forth
below.

 

	
  COMPANY

  	
  CATALYST SEMICONDUCTOR, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gelu
  Voicu

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXECUTIVE

  	
  Sorin Georgescu

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Sorin
  Georgescu

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Vice
  President of Technology Development

  	
   

  

 

10

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