Document:

Elantec Semiconductor, Inc. exhibit 10.17

	

	

EXHIBIT 10.17

ELANTEC SEMICONDUCTOR,
INC.

2001 EQUITY INCENTIVE PLAN

As Adopted November 2,
2000 

and Amended May 2, 2001 

     1.
     PURPOSE.   The purpose of this Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions are
important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company’s future
performance through awards of Options, Restricted Stock and Stock Bonuses.
Capitalized terms not defined in the text are defined in Section 23. 

     2.
     SHARES SUBJECT TO THE PLAN. 

             2.1           
Number of Shares Available. Subject to Sections 2.2 and 18, the total number of Shares reserved
and available for grant and issuance pursuant to this Plan will be 1,050,000 Shares plus
Shares that are subject to: (a) issuance upon exercise of an Option but cease to be
subject to such Option for any reason other than exercise of such Option; (b) an Award
granted hereunder but are forfeited or are repurchased by the Company at the original
issue price; and (c) an Award that otherwise terminates without Shares being issued. At
all times the Company shall reserve and keep available a sufficient number of Shares as
shall be required to satisfy the requirements of all outstanding Options granted under
this Plan and all other outstanding but unvested Awards granted under this Plan.  

             2.2           
Adjustment of Shares. In the event that the number of outstanding shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company without
consideration, then (a) the number of Shares reserved for issuance under this Plan, (b)
the number of Shares that may be granted pursuant to Sections 3 below, (c) the Exercise
Prices of and number of Shares subject to outstanding Options, and (d) the number of
Shares subject to other outstanding Awards will be proportionately adjusted in compliance
with applicable securities laws; provided, however, that fractions of a Share will not be
issued but will either be replaced by a cash payment equal to the Fair Market Value of
such fraction of a Share or will be rounded up to the nearest whole Share, as determined
by the Committee.  

     3.      
ELIGIBILITY.   ISOs
(as defined in Section 5 below) may be granted only to employees (including officers and
directors who are also employees) of the Company or of a Parent or Subsidiary of the
Company. All other Awards may be granted to employees, officers, directors, consultants,
independent contractors and advisors of the Company or any Parent or Subsidiary of the
Company; provided such consultants, contractors and advisors render bona fide services
not in connection with the offer and sale of securities in a capital-raising transaction.
No person will be eligible to receive more than 200,000 Shares in any calendar year under
this Plan pursuant to the grant of Awards hereunder, other than new employees of the
Company or of a Parent or Subsidiary of the Company (including new employees who are also
officers and directors of the Company or any Parent or Subsidiary of the Company), who
are eligible to receive up to a maximum of 800,000 Shares in the calendar year in which
they commence their employment. A person may be granted more than one Award under this
Plan.  

     4.      ADMINISTRATION. 

             4.1      
Committee Authority. This Plan will be administered by the Committee or by the Board acting as the
Committee. Subject to the general purposes, terms and conditions of this Plan, and to the
direction of the Board, the Committee will have full power to implement and carry out
this Plan. The Committee will have the authority to: 

 

	

			(a)  		construe
and interpret this Plan, any Award Agreement and any other agreement or document executed
pursuant to this Plan; 

			(b)  		prescribe,
amend and rescind rules and regulations relating to this Plan or any Award; 

			(c)  		select
persons to receive Awards; 

			(d)  		determine
the form and terms of Awards; 

			(e)  		determine
the number of Shares or other consideration subject to Awards; 

			(f)  		determine
whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or any other
incentive or compensation plan of the Company or any Parent or Subsidiary of the Company; 

			(g)  		grant
waivers of Plan or Award conditions; 

			(h)  		determine
the vesting, exercisability and payment of Awards; 

			(i)  		correct
any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or
any Award Agreement; 

			(j)  		determine
whether an Award has been earned; and 

			(k)  		make
all other determinations necessary or advisable for the administration of this Plan. 

	

             4.2      
Committee Discretion. Any determination made by the Committee with respect to any Award will be
made in its sole discretion at the time of grant of the Award or, unless in contravention
of any express term of this Plan or Award, at any later time, and such determination will
be final and binding on the Company and on all persons having an interest in any Award
under this Plan. The Committee may delegate to one or more officers of the Company the
authority to grant an Award under this Plan to Participants who are not Insiders of the
Company. 

     5.      OPTIONS.   
The Committee may grant Options to eligible persons and will determine whether such
Options will be Incentive Stock Options within the meaning of the Code (“ISO”)
or Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the
Option, the Exercise Price of the Option, the period during which the Option may be
exercised, and all other terms and conditions of the Option, subject to the following:  

             5.1      
Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award
Agreement which will expressly identify the Option as an ISO or an NQSO
(“Stock Option Agreement”), and will be in such form and contain such provisions (which need not be the
same for each Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan. 

             5.2      
Date of Grant. The date of grant of an Option will be the date on which the Committee makes
the determination to grant such Option, unless otherwise specified by the Committee. The
Stock Option Agreement and a copy of this Plan will be delivered to the Participant
within a reasonable time after the granting of the Option. 

             5.3      
Exercise Period. Options may be exercisable within the times or upon the events determined by the
Committee as set forth in the Stock Option Agreement governing such Option; provided,
however, that no Option will be exercisable after the expiration of ten (10) years from
the date the Option is granted; and provided further that no ISO granted to a person who
directly or by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary of the
Company (“Ten Percent Stockholder”) will be exercisable after the expiration of five (5)
years from the date the ISO is granted. The Committee also may provide for Options to
become exercisable at one time or from time to time, periodically or otherwise, in such
number of Shares or percentage of Shares as the Committee determines. 

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             5.4      
Exercise Price. The Exercise Price of an Option will be determined by the Committee when the
Option is granted but may not be less than 100% of the Fair Market Value of the Shares on
the date of grant except that the exercise price may be reduced to no less than 85% of
the Fair Market Value of the Shares on the date of grant if the discount is expressly
made in lieu of a reasonable amount of salary or cash bonus, as determined in the good
faith discretion of the Committee. Notwithstanding the foregoing: (i) the Exercise Price
of an ISO will be not less than 100% of the Fair Market Value of the Shares on the date
of grant; and (ii) the Exercise Price of any ISO granted to a Ten Percent Stockholder
will not be less than 110% of the Fair Market Value of the Shares on the date of grant.
Payment for the Shares purchased may be made in accordance with Section 8 of this Plan. 

             5.5      
Method of Exercise. Options may be exercised only by delivery to the Company of a written stock
option exercise agreement (the “Exercise Agreement”) in a form approved by the Committee
(which need not be the same for each Participant), stating the number of Shares being
purchased, the restrictions imposed on the Shares purchased under such Exercise
Agreement, if any, and such representations and agreements regarding Participant's
investment intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together with
payment in full of the Exercise Price for the number of Shares being purchased. 

             5.6      Termination.
Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of
an Option will always be subject to the following: 

			(a)  		If
the Participant is Terminated for any reason except death or Disability, then the
Participant may exercise such Participant's Options only to the extent that such Options
would have been exercisable upon the Termination Date no later than three (3) months
after the Termination Date (or such shorter or longer time period not exceeding five (5)
years as may be determined by the Committee, with any exercise beyond three (3) months
after the Termination Date deemed to be an NQSO), but in any event, no later than the
expiration date of the Options. 

			(b)  		If
the Participant is Terminated because of Participant's death or Disability (or the
Participant dies within three (3) months after a Termination other than for Cause or
because of Participant's Disability), then Participant's Options may be exercised only to
the extent that such Options would have been exercisable by Participant on the
Termination Date and must be exercised by Participant (or Participant's legal
representative or authorized assignee) no later than twelve (12) months after the
Termination Date (or such shorter or longer time period not exceeding five (5) years as
may be determined by the Committee, with any such exercise beyond (a) three (3) months
after the Termination Date when the Termination is for any reason other than the
Participant's death or disability, within the meaning of Section 22(e)(3) of the Code, or
(ii) twelve (12) months after the Termination Date when the Termination is for
Participant's disability, within the meaning of Section 22(e)(3) of the Code, deemed to
be an NQSO), but in any event no later than the expiration date of the Options. 

			(c)  		If
the Participant is terminated for Cause, then Participant's Options shall expire on such
Participant's Termination Date, or at such later time and on such conditions as are
determined by the Committee. 

	

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             5.7      
Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares that may be
purchased on any exercise of an Option, provided that such minimum number will not
prevent Participant from exercising the Option for the full number of Shares for which it
is then exercisable. 

             5.8      
Limitations on ISO. The aggregate Fair Market Value (determined as of the date of grant) of Shares
with respect to which ISO are exercisable for the first time by a Participant during any
calendar year (under this Plan or under any other incentive stock option plan of the
Company, Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair
Market Value of Shares on the date of grant with respect to which ISO are exercisable for
the first time by a Participant during any calendar year exceeds $100,000, then the
Options for the first $100,000 worth of Shares to become exercisable in such calendar
year will be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs. In the event that the Code or the
regulations promulgated thereunder are amended after the Effective Date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to be subject
to ISO, such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment. 

             5.9      
Modification, Extension or Renewal. Subject to the provisions of Section 21, the Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the written consent
of a Participant, impair any of such Participant's rights under any Option previously
granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered
will be treated in accordance with Section 424(h) of the Code. The Committee may reduce
the Exercise Price of outstanding Options without the consent of Participants affected by
a written notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4 of this Plan
for Options granted on the date the action is taken to reduce the Exercise Price and
provided further that the Exercise Price may not be reduced without the prior approval of
the Company's shareholders. 

             5.10      
No Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan
relating to ISO will be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan under
Section 422 of the Code or, without the consent of the Participant affected, to
disqualify any ISO under Section 422 of the Code. 

     6.      RESTRICTED STOCK.   
A Restricted Stock Award is an offer by the Company to sell to an eligible person Shares
that are subject to restrictions. The Committee will determine to whom an offer will be
made, the number of Shares the person may purchase, the price to be paid (the “Purchase Price”),
the restrictions to which the Shares will be subject, and all other terms and conditions
of the Restricted Stock Award, subject to the following:  

             6.1      
Form of Restricted Stock Award. All purchases under a Restricted Stock Award made pursuant to
this Plan will be evidenced by an Award Agreement (“Restricted Stock Purchase Agreement”)
that will be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject to the
terms and conditions of this Plan. The offer of Restricted Stock will be accepted by the
Participant's execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person does not
execute and deliver the Restricted Stock Purchase Agreement along with full payment for
the Shares to the Company within thirty (30) days, then the offer will terminate, unless
otherwise determined by the Committee. 

             6.2      
Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award will be
determined by the Committee on the date the Restricted Stock Award is granted, except in
the case of a sale to a Ten Percent Stockholder, in which case the Purchase Price will be
100% of the Fair Market Value. Payment of the Purchase Price may be made in accordance
with Section 8 of this Plan. 

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             6.3      
Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to such restrictions
as the Committee may impose. These restrictions may be based upon completion of a
specified number of years of service with the Company or upon completion of the
performance goals as set out in advance in the Participant's individual Restricted Stock
Purchase Agreement. Restricted Stock Awards may vary from Participant to Participant and
between groups of Participants. Prior to the grant of a Restricted Stock Award, the
Committee shall: (a) determine the nature, length and starting date of any Performance
Period for the Restricted Stock Award; (b) select from among the Performance Factors to
be used to measure performance goals, if any; and (c) determine the number of Shares that
may be awarded to the Participant. Prior to the payment of any Restricted Stock Award,
the Committee shall determine the extent to which such Restricted Stock Award has been
earned. Performance Periods may overlap and Participants may participate simultaneously
with respect to Restricted Stock Awards that are subject to different Performance Periods
and having different performance goals and other criteria. Notwithstanding the foregoing,
Restricted Stock Awards may not vest any faster than 33-1/3% per year unless the vesting
is performance based. In the case of performance vesting, Restricted Stock Awards shall
nonetheless be subject to one-year cliff vesting in the event the performance criteria
are satisfied prior to one year from the date of grant. 

             6.4      
Termination During Performance Period. If a Participant is Terminated during a Performance Period for
any reason, then such Participant will be entitled to payment (whether in Shares, cash or
otherwise) with respect to the Restricted Stock Award only to the extent earned as of the
date of Termination in accordance with the Restricted Stock Purchase Agreement, unless
the Committee will determine otherwise. 

     7.      
STOCK BONUSES. 

             7.1      
Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist of Restricted
Stock) for services rendered to the Company or any Parent or Subsidiary of the Company. A
Stock Bonus may be in lieu of a reasonable amount of salary or cash bonus, as determined
in the good faith discretion of the Committee, pursuant to an Award Agreement
(“Stock Bonus Agreement”) that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply with and be
subject to the terms and conditions of this Plan. also, a Stock Bonus may be awarded upon
satisfaction of such performance goals over at least a twelve month period as are set out
in advance in the Participant's individual Award Agreement
(the “Performance Stock Bonus Agreement”) that will be in such form (which need not be the same for each Participant)
as the Committee will from time to time approve, and will comply with and be subject to
the terms and conditions of this Plan. Stock Bonuses may vary from Participant to
Participant and between groups of Participants, and may be based upon the achievement of
the Company, Parent or Subsidiary and/or individual performance factors or upon such
other criteria as the Committee may determine. 

             7.2      
Terms of Stock Bonuses. The Committee will determine the number of Shares to be awarded to the
Participant. If the Stock Bonus is being earned upon the satisfaction of performance
goals pursuant to a Performance Stock Bonus Agreement, then the Committee will: (a)
determine the nature, length and starting date of any Performance Period for each Stock
Bonus; (b) select from among the Performance Factors to be used to measure the
performance, if any; and (c) determine the number of Shares that may be awarded to the
Participant. Prior to the payment of any Stock Bonus, the Committee shall determine the
extent to which such Stock Bonuses have been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that are
subject to different Performance Periods and different performance goals and other
criteria. The number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The Committee may
adjust the performance goals applicable to the Stock Bonuses to take into account changes
in law and accounting or tax rules and to make such adjustments as the Committee deems
necessary or appropriate to reflect the impact of extraordinary or unusual items, events
or circumstances to avoid windfalls or hardships. 

             7.3      
Form of Payment. The earned portion of a Stock Bonus may be paid currently or on a deferred
basis with such interest or dividend equivalent, if any, as the Committee may determine.
Payment may be made in the form of cash or whole Shares or a combination thereof, either
in a lump sum payment or in installments, all as the Committee will determine. 

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     8.      
PAYMENT FOR SHARE PURCHASES. 

             8.1      Payment.
Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or,
where expressly approved for the Participant by the Committee and where permitted by law: 

			(a)  		by
cancellation of indebtedness of the Company to the Participant; 

			(b)  		by
surrender of shares that either: (1) have been owned by Participant for more than six (6)
months and have been paid for within the meaning of SEC Rule 144 (and, if such shares
were purchased from the Company by use of a promissory note, such note has been fully
paid with respect to such shares); or (2) were obtained by Participant in the public
market; 

			(c)  		by
tender of a full recourse promissory note having such terms as may be approved by the
Committee and bearing interest at a rate sufficient to avoid imputation of income under
Sections 483 and 1274 of the Code; provided, however, that Participants who are not
employees or directors of the Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by collateral other than the Shares; 

			(d)  		by
waiver of compensation due or accrued to the Participant for services rendered; 

			(e)  		with
respect only to purchases upon exercise of an Option, and provided that a public market
for the Company's stock exists: 

					(1)  		through
a "same day sale" commitment from the Participant and a broker-dealer that is a member of
the National Association of Securities Dealers (an “NASD Dealer”) whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the Company; or 

					(2)  		through
a "margin" commitment from the Participant and a NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to pledge the Shares so purchased to the
NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount
of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the Company; or 

			(f)  		by
any combination of the foregoing. 

	

             8.2      
Loan Guarantees. The Committee may help the Participant pay for Shares purchased under this
Plan by authorizing a guarantee by the Company of a third-party loan to the Participant. 

     9.      
RESTRICTIONS ON SHARES.   At the discretion of the Committee, the Company may reserve to itself and/or
its assignee(s) in the Award Agreement a right to repurchase a portion of or all Unvested
Shares held by a Participant following such Participant’s Termination at any time
within ninety (90) days after the later of Participant’s Termination Date and the
date Participant purchases Shares under this Plan, for cash and/or cancellation of
purchase money indebtedness, at the Participant’s Exercise Price or Purchase Price,
as the case may be.  

     10.      
WITHHOLDING TAXES. 

             10.1      
Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards granted under this
Plan, the Company may require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax requirements. 

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             10.2      
Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability in
connection with the exercise or vesting of any Award that is subject to tax withholding
and the Participant is obligated to pay the Company the amount required to be withheld,
the Committee may in its sole discretion allow the Participant to satisfy the minimum
withholding tax obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be withheld is
to be determined. All elections by a Participant to have Shares withheld for this purpose
will be made in accordance with the requirements established by the Committee and be in
writing in a form acceptable to the Committee. 

     11.      TRANSFERABILITY. 

             11.1      Except
as otherwise provided in this Section 11, Awards granted under this Plan, and any
interest therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will or by
the laws of descent and distribution or as determined by the Committee and set forth in
the Award Agreement with respect to Awards that are not ISOs. 

             11.2      
All Awards other than NQSO's. All Awards other than NQSO's shall be exercisable: (i) during
the Participant's lifetime, only by (A) the Participant, or (B) the Participant's
guardian or legal representative; and (ii) after Participant's death, by the legal
representative of the Participant's heirs or legatees. 

             11.3      NQSOs.
Unless otherwise restricted by the Committee, an NQSO shall be exercisable: (i) during
the Participant's lifetime only by (A) the Participant, (B) the Participant's guardian or
legal representative, (C) a Family Member of the Participant who has acquired the NQSO by
"permitted transfer;" and (ii) after Participant's death, by the legal representative of
the Participant's heirs or legatees. "Permitted transfer" means, as authorized by this
Plan and the Committee in an NQSO, any transfer effected by the Participant during the
Participant's lifetime of an interest in such NQSO but only such transfers which are by
gift or domestic relations order. A permitted transfer does not include any transfer for
value and neither of the following are transfers for value: (a) a transfer of under a
domestic relations order in settlement of marital property rights or (b) a transfer to an
entity in which more than fifty percent of the voting interests are owned by Family
Members or the Participant in exchange for an interest in that entity. 

     12.      PRIVILEGES OF STOCK OWNERSHIP. 

             12.1      
Voting and Dividends. No Participant will have any of the rights of a stockholder with respect
to any Shares until the Shares are issued to the Participant. After Shares are issued to
the Participant, the Participant will be a stockholder and have all the rights of a
stockholder with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares; provided, that
if such Shares are Restricted Stock, then any new, additional or different securities the
Participant may become entitled to receive with respect to such Shares by virtue of a
stock dividend, stock split or any other change in the corporate or capital structure of
the Company will be subject to the same restrictions as the Restricted Stock; provided,
further, that the Participant will have no right to retain such stock dividends or stock
distributions with respect to Shares that are repurchased at the Participant's Purchase
Price or Exercise Price pursuant to Section 12. 

             12.2      
Financial Statements. The Company will provide financial statements to each Participant prior to
such Participant's purchase of Shares under this Plan, and to each Participant annually
during the period such Participant has Awards outstanding; provided, however, the Company
will not be required to provide such financial statements to Participants whose services
in connection with the Company assure them access to equivalent information. 

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     13.      CERTIFICATES.   
All certificates for Shares or other securities delivered under this Plan will be subject
to such stock transfer orders, legends and other restrictions as the Committee may deem
necessary or advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be listed or
quoted.  

     14.      ESCROW; PLEDGE OF SHARES.   
To enforce any restrictions on a Participant’s Shares, the Committee may require the
Participant to deposit all certificates representing Shares, together with stock powers
or other instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a legend or
legends referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration for the
purchase of Shares under this Plan will be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the payment of
Participant’s obligation to the Company under the promissory note; provided,
however, that the Committee may require or accept other or additional forms of collateral
to secure the payment of such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note notwithstanding any pledge of
the Participant’s Shares or other collateral. In connection with any pledge of the
Shares, Participant will be required to execute and deliver a written pledge agreement in
such form as the Committee will from time to time approve. The Shares purchased with the
promissory note may be released from the pledge on a pro rata basis as the promissory
note is paid.  

     15.      EXCHANGE AND BUYOUT OF AWARDS.   
The Committee may, at any time or from time to time, authorize the Company, with the
consent of the respective Participants, to issue new Awards in exchange for the surrender
and cancellation of any or all outstanding Awards. The Committee may at any time buy from
a Participant an Award previously granted with payment in cash, Shares (including
Restricted Stock) or other consideration, based on such terms and conditions as the
Committee and the Participant may agree.  

     16.      SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.   
An Award will not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental body, and
the requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant of the
Award and also on the date of exercise or other issuance. Notwithstanding any other
provision in this Plan, the Company will have no obligation to issue or deliver
certificates for Shares under this Plan prior to: (a) obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable; and/or (b)
completion of any registration or other qualification of such Shares under any state or
federal law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the Shares
with the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation system,
and the Company will have no liability for any inability or failure to do so.  

     17.      NO OBLIGATION TO EMPLOY.   
Nothing in this Plan or any Award granted under this Plan will confer or be deemed to
confer on any Participant any right to continue in the employ of, or to continue any
other relationship with, the Company or any Parent or Subsidiary of the Company or limit
in any way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or
without cause.  

     18.      CORPORATE TRANSACTIONS. 

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             18.1      
Assumption or Replacement of Awards by Successor. In the event of (a) a dissolution or liquidation
of the Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction in which
there is no substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or replaced by the
successor corporation, which assumption will be binding on all Participants), (c) a
merger in which the Company is the surviving corporation but after which the stockholders
of the Company (other than any stockholder which merges (or which owns or controls
another corporation which merges) with the Company in such merger) cease to own their
shares or other equity interests in the Company, (d) the sale of substantially all of the
assets of the Company, or (e) any other transaction which qualifies as a "corporate
transaction" under Section 424(a) of the Code wherein the stockholders of the Company
give up all of their equity interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of the Company from or by
the stockholders of the Company), any or all outstanding Awards may be assumed, converted
or replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the successor
corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into account
the existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject to repurchase restrictions no less favorable to the
Participant. In the event such successor corporation (if any) refuses to assume or
substitute Options, as provided above, pursuant to a transaction described in this
Subsection 18.1, such Options will expire on such transaction at such time and on such
conditions as the Board will determine. 

             18.2      
Other Treatment of Awards. Subject to any greater rights granted to Participants under the
foregoing provisions of this Section 18, in the event of the occurrence of any
transaction described in Section 18.1, any outstanding Awards will be treated as provided
in the applicable agreement or plan of merger, consolidation, dissolution, liquidation,
sale of assets or other "corporate transaction." 

             18.3      
Assumption of Awards by the Company. The Company, from time to time, also may substitute or assume
outstanding awards granted by another company, whether in connection with an acquisition
of such other company or otherwise, by either: (a) granting an Award under this Plan in
substitution of such other company's award; or (b) assuming such award as if it had been
granted under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if the
holder of the substituted or assumed award would have been eligible to be granted an
Award under this Plan if the other company had applied the rules of this Plan to such
grant. In the event the Company assumes an award granted by another company, the terms
and conditions of such award will remain unchanged (except that the exercise price and
the number and nature of Shares issuable upon exercise of any such option will be
adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company
elects to grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price. 

     19.      ADOPTION AND STOCKHOLDER APPROVAL.   
This Plan will become effective on the date this Plan is adopted by the Board (the “Effective Date”). This Plan shall be approved by the stockholders of the Company (excluding
Shares issued pursuant to this Plan), consistent with applicable laws, within twelve (12)
months before or after the date this Plan is adopted by the Board. Upon the Effective
Date, the Committee may grant Awards pursuant to this Plan; provided, however, that: (a)
no Option may be exercised prior to initial stockholder approval of this Plan; (b) no
Option granted pursuant to an increase in the number of Shares subject to this Plan
approved by the Board will be exercised prior to the time such increase has been approved
by the stockholders of the Company; (c) in the event that initial stockholder approval is
not obtained within the time period provided herein, all Awards granted hereunder shall
be cancelled, any Shares issued pursuant to any Awards shall be cancelled and any
purchase of Shares issued hereunder shall be rescinded; and (d) in the event that
stockholder approval of such increase is not obtained within the time period provided
herein, all Awards granted pursuant to such increase will be cancelled, any Shares issued
pursuant to any Award granted pursuant to such increase will be cancelled, and any
purchase of Shares pursuant to such increase will be rescinded.  

     20.       TERM OF PLAN/GOVERNING LAW.   
Unless earlier terminated as provided herein, this Plan will terminate ten (10)
years from the date this Plan is adopted by the Board or, if earlier, the date of
stockholder approval. This Plan and all agreements thereunder shall be governed by and
construed in accordance with the laws of the State of California.  

9 

	

	

     21.      AMENDMENT OR TERMINATION OF PLAN.   
The Board may at any time terminate or amend this Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan; provided, however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such stockholder
approval. . Notwithstanding the foregoing, the Board may grant waivers of Plan or Award
provisions only under extraordinary conditions, such as, death, disability, change of
corporate control, as determined in the good faith discretion of the Committee.  

     22.      NONEXCLUSIVITY OF THE PLAN.   
Neither the adoption of this Plan by the Board, the submission of this Plan to the
stockholders of the Company for approval, nor any provision of this Plan will be
construed as creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific cases.  

     23.      DEFINITIONS.   
As used in this Plan, the following terms will have the following meanings: 

             “Award”means
any award under this Plan, including any Option, Restricted Stock or Stock Bonus.  

             “Award
Agreement” means, with respect to each Award, the signed written agreement between
the Company and the Participant setting forth the terms and conditions of the Award. 

             “Board” means
the Board of Directors of the Company. 

             “Cause” means
(i) the commission of an act of theft, embezzlement, fraud, dishonesty, (b) a breach of
fiduciary duty to the Company or a Parent or Subsidiary of the Company or (c) a failure
to materially perform the customary duties of employee's employment. 

             “Code” means
the Internal Revenue Code of 1986, as amended. 

             “Committee” means
the Compensation Committee of the Board. 

             “Company” means
Elantec Semiconductor, Inc. or any successor corporation. 

             “Disability” means
a disability, whether temporary or permanent, partial or total, as determined by the
Committee. 

             “Exchange Act”
means the Securities Exchange Act of 1934, as amended. 

             “Exercise Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option. 

             “Fair Market Value” means, as of any date, the value of a share of the Company's Common
Stock determined as follows: 

			(a)  		if
such Common Stock is then quoted on the Nasdaq National Market, its closing price on the
Nasdaq National Market on the date of determination as reported in The Wall Street Journal;
 

			(b)  		if
such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal national
securities exchange on which the Common Stock is listed or admitted to trading as
reported in The Wall Street Journal; 

	

10 

	

			(c)  		if
such Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor
listed or admitted to trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as reported in The Wall Street Journal; 

			(d)  		in
the case of an Award made on the Effective Date, the price per share at which shares of
the Company's Common Stock are initially offered for sale to the public by the Company's
underwriters in the initial public offering of the Company's Common Stock pursuant to a
registration statement filed with the SEC under the Securities Act; or 

			(e)  		if
none of the foregoing is applicable, by the Committee in good faith. 

             “Family Member” includes any of the following: 

			(a)  		child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law of the Participant, including any such person with such relationship to
the Participant by adoption; 

			(b)  		any
person (other than a tenant or employee) sharing the Participant's household; 

			(c)  		a
trust in which the persons in (a) and (b) have more than fifty percent of the beneficial
interest; 

			(d)  		a
foundation in which the persons in (a) and (b) or the Participant control the management
of assets; or 

			(e)  		any
other entity in which the persons in (a) and (b) or the Participant own more than fifty
percent of the voting interest. 

	

             “Insider” means
an officer or director of the Company or any other person whose transactions in the
Company's Common Stock are subject to Section 16 of the Exchange Act. 

             “Option” means
an award of an option to purchase Shares pursuant to Section 5. 

             “Parent” means
any corporation (other than the Company) in an unbroken chain of corporations ending with
the Company if each of such corporations other than the Company owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. 

             “Participant” means
a person who receives an Award under this Plan. 

             “Performance Factors” means the factors selected by the Committee from among the following
measures to determine whether the performance goals established by the Committee and
applicable to Awards have been satisfied: 

			(a)  		Net
revenue and/or net revenue growth; 

			(b)  		Earnings
before income taxes and amortization and/or earnings before income taxes and amortization
growth; 

			(c)  		Operating
income and/or operating income growth; 

			(d)  		Net
income and/or net income growth; 

	

11 

	

			(e)  		Earnings
per share and/or earnings per share growth; 

			(f)  		Total
stockholder return and/or total stockholder return growth; 

			(g)  		Return
on equity; 

			(h)  		Operating
cash flow return on income; 

			(i)  		Adjusted
operating cash flow return on income; 

			(j)  		Economic
value added; and 

			(k)  		Individual
confidential business objectives. 

	

             “Performance Period” means the period of service determined by the Committee, not to exceed five
years, during which years of service or performance is to be measured for Restricted
Stock Awards or Stock Bonuses. 

             “Plan” means
this Elantec Semiconductor, Inc. 2001 Equity Incentive Plan, as amended from time to time. 

             “Restricted Stock Award” means an award of Shares pursuant to Section 6. 

             “SEC” means
the Securities and Exchange Commission. 

             “Securities Act” means the Securities Act of 1933, as amended. 

             “Shares” means
shares of the Company's Common Stock reserved for issuance under this Plan, as adjusted
pursuant to Sections 2 and 18, and any successor security. 

             “Stock Bonus” means an award of Shares, or cash in lieu of Shares, pursuant to Section 7. 

             “Subsidiary” means
any corporation (other than the Company) in an unbroken chain of corporations beginning
with the Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain. 

             “Termination” or
“Terminated” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee,
officer, director, consultant, independent contractor, or advisor to the Company or a
Parent or Subsidiary of the Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other
leave of absence approved by the Committee, provided, that such leave is for a period of
not more than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to formal policy
adopted from time to time by the Company and issued and promulgated to employees in
writing. In the case of any employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the Award while on leave from
the employ of the Company or a Subsidiary as it may deem appropriate, except that in no
event may an Option be exercised after the expiration of the term set forth in the Option
agreement. The Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant ceased to
provide services (the “Termination Date”). 

             “Unvested Shares” means “Unvested Shares”as defined in the Award Agreement. 

             “Vested Shares” means “Vested Shares”as defined in the Award Agreement. 

12Elantic Semiconductor, Inc. EXHIBIT 10.18

	

	

EXHIBIT 10.18

EXECUTIVE
CHANGE IN
CONTROL
SEVERANCE BENEFITS AGREEMENT

     THIS
EXECUTIVE CHANGE IN CONTROL SEVERANCE BENEFITS AGREEMENT (the
“AGREEMENT”) is entered into on February 13, 2001, between
Richard M. Beyer (“Executive”) and ELANTEC SEMICONDUCTOR, INC.,
a Delaware corporation (the “COMPANY”). This Agreement is
intended to provide Executive with the compensation and benefits described
herein upon the occurrence of specific events. 

     Certain
capitalized terms used in this Agreement are defined in Article VI. 

     The
Company and Executive hereby agree as follows: 

ARTICLE 1
EMPLOYMENT
BY THE COMPANY

     1.1
Executive is currently employed as an executive of the Company. 

     1.2
This Agreement shall remain in full force and effect so long as Executive is
employed by Company; provided, however, that the rights and obligations of the
parties hereto contained in Articles II through VII shall survive Two and One
Half (2-1/2) years following a Covered Termination (as hereinafter defined). 

     1.3
The Company and Executive wish to set forth the compensation and benefits which
Executive shall be entitled to receive in the event that there is a Change in
Control or Executive’s employment with the Company terminates following a
Change in Control under the circumstances described in Article II of this
Agreement. 

     1.4
The duties and obligations of the Company to Executive under this Agreement
shall be in consideration for Executive’s past services to the Company,
Executive’s continued employment with the Company and Executive’s
execution of the general waiver and release described in Section 3.2. 

     1.5
This Agreement shall not supersede or affect any other agreements relating to
Executive’s employment or severance, or a change in control of the Company. 

ARTICLE II
SEVERANCE
BENEFITS

     2.1
Entitlement To Severance Benefits. If Executive’s employment
terminates due to an Involuntary Termination or a Voluntary Termination for Good
Reason within twelve (12) months following a Change in Control, the termination
of employment will be a Covered Termination and the Company shall pay Executive
the compensation and benefits described in this Article II. If Executive’s
employment terminates, but not due to an Involuntary Termination or a Voluntary
Termination for Good Reason within twelve (12) months following a Change in
Control, then the termination of employment will not be a Covered
Termination and Executive will not be entitled to receive any payments or
benefits under this Article II. 

1 

	

	

     Payment
of any benefits described in this Article II shall be subject to the
restrictions and limitations set forth in Article III. 

     2.2
Lump Sum Severance Payment. The Company shall pay to the Executive his
base pay through Date of Covered Termination at the rate in effect at the time
Notice of Termination is given, subject to any applicable withholding of
federal, state or local taxes, plus (i) that portion of your targeted cash bonus
prorated through the Date of Covered Termination, and (ii) all other amounts to
which you are entitled under any compensation plan or practice of the Company at
the time such payments are due. Within thirty (30) days following a Covered
Termination, Executive shall receive a lump sum payment equal to one hundred
percent (100%) of the sum of Annual Base Pay and Annual Bonus at target, subject
to any applicable withholding of federal, state or local taxes. 

     2.3
Stock Options. In accordance with Section 4.3, certain stock options held
by the Executive may become fully vested and exercisable upon a Change in
Control (regardless of whether a Covered Termination occurs) and the period of
time following a Covered Termination may be extended. 

     2.4
Welfare Benefits. Following a Covered Termination, Executive and his
covered dependents will be eligible to continue their Welfare Benefit coverage
under any Welfare Benefit plan or program maintained by the Company on the same
terms and conditions (including cost to Executive) as in effect immediately
prior to the Covered Termination, for the One (1) year following the Covered
Termination. 

     With
respect to any Welfare Benefits provided through an insurance policy, the
Company’s obligation to provide such Welfare Benefits following a Covered
Termination shall be limited by the terms of such a policy; provided that (i)
the Company shall make reasonable efforts to amend such policy to provide the
continued coverage described in this Section 2.4, and (ii) if a policy providing
health benefits is not amended to provide the continued benefits described in
this Section 2.4, the Company shall pay for the cost of comparable replacement
coverage (or Medigap insurance if Executive qualifies for Medicare) until the
end of the One (1) year period following the Covered Termination. 

     The
Company shall reimburse Executive for any income tax liability due as a result
of the provision of Welfare Benefits under this Article II (and as a result of
any payments due under this paragraph) in order to put Executive in the same
after-tax position as if no taxable Welfare Benefits had been provided. 

     This
Section 2.4 is not intended to affect, not does it affect, the rights of
Executive, or Executive’s covered dependents, under any applicable law with
respect to health insurance continuation coverage. 

     2.5
Mitigation. Except as otherwise specifically provided herein, Executive
shall not be required to mitigate damages or the amount of any payment provided
under this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be reduced by any
compensation earned by Executive as a result of employment by another employer
or by retirement benefits after the date of the Covered Termination, or
otherwise. 

2 

	

	

ARTICLE III
LIMITATIONS
AND CONDITIONS ON BENEFITS

     3.1
Withholding of Taxes. The Company shall withhold appropriate federal,
state or local income and employment taxes from any payments hereunder. 

     3.2
Employee Agreement and Release Prior to receipt of Benefits. Upon the
occurrence of a Covered Termination, and prior to the receipt of any benefits
under this Agreement on account of the occurrence of a Covered Termination,
Executive shall, as of the date of a Covered Termination, execute an employee
agreement and release in the form attached hereto as Exhibit A. Such employee
agreement and release shall specifically relate to all of Executive’s
rights and claims in existence at the time of such execution and shall confirm
Executive’s obligations under the Company’s standard form of
proprietary information agreement. It is understood such employee release and
agreement shall comply with applicable law. In the event Executive does not
execute such release and agreement within the period required by applicable law,
or if Executive revokes such employee agreement and release within the period
permitted by applicable law, no benefits shall be payable under this Agreement
and this Agreement shall be null and void. 

ARTICLE IV
OTHER RIGHTS
AND BENEFITS

     4.1
Nonexclusivity. Nothing in the Agreement shall prevent or limit
Executive’s continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices provided by the
Company and for which Executive may otherwise qualify, nor shall anything herein
limit or otherwise affect such rights as Executive may have under any stock
option or other agreements with the Company. Except as otherwise expressly
provided herein, amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, policy, practice or program of the
Company at or subsequent to the date of a Covered Termination shall be payable
in accordance with such plan, policy, practice or program. 

     4.2
Parachute Payments. In the event that any amount or benefit received or
to be received by Executive pursuant to this Agreement (other than payment
pursuant to this Section 4.2) would constitute an “excess parachute
payment” subject to excise tax under Section 4999 of the Code, the Company
shall pay to Executive the amount of any such excise tax; provided, however,
that no payment shall be made under this Section 4.2 to the extent that it would
reduce Executive’s after-tax income. 

     4.3
Stock Options. Company shall take all actions necessary to amend all
stock option agreements evidencing outstanding stock options and restricted
stock grant agreements granted to Executive: (i) upon a Change in Control to
provide for full accelerated vesting and exercisability of the Executive’s
outstanding options to purchase Elantec Common Stock (or securities of the
surviving entity that are issuable upon exercise of stock options following the
Change in Control), (ii) to permit Executive to exercise any vested options and
restricted stock following his termination of service to the Company as an
employee or consultant for up to three (3) months (or such longer period as may
currently apply) and (iii) to permit Executive to exercise the options and
restricted stock for at least the twelve (12) months following a Covered
Termination. Notwithstanding the foregoing, the Company shall not amend a stock
option agreement to the extent that an amendment would result in a charge to
earnings for the Company, would adversely affect Executive’s financial
position, or cause Executive to be subject to liability under Section 16(b) of
the Securities Exchange Act of 1934, as amended. 

3 

	

	

     4.4
Indemnity  Agreement. The Indemnity  Agreement  signed by the Executive upon employment with the
Company will remain in full force and effect for 5 years following the Date of Covered Termination. 

ARTICLE V
NON-ALIENATION OF BENEFITS

     No
benefit hereunder shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to so subject a
benefit hereunder shall be void. 

ARTICLE VI
DEFINITIONS

     For
purposes of the Agreement, the following terms shall have the meanings set forth
below: 

     6.1
“Agreement” means this Executive Change in Control Severance Benefits Agreement. 

     6.2
“Annual Base Pay” means Executive’s annual base pay at the
rate in effect during the last regularly scheduled payroll period immediately
preceding (i) the Change in Control or (ii) the Covered Termination, whichever
is greater. 

     6.3
“Annual Bonus” means the Executive’s projected or
estimated annual cash incentive bonus at target for the fiscal year of the
Company in which termination of employment occurs. 

     6.4
“Change in Control” means the consummation of any of the following transactions: 

             (a)      the
stockholders of the Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which 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) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of the Company approve a plan of
liquidation or dissolution of the Company or an agreement for the sale, lease, exchange
or other transfer or disposition by the Company of all or substantially all (more than
fifty percent (50%)) of the Company's assets; 

             (b)      any
person (as such term is used in Sections 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), is or becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) directly or indirectly of 25% or more of the Company's
outstanding Common Stock; or 

             (c)      a
change in the composition of the Board of Directors of the Company within a three (3)
year period, as a result of which fewer than a majority of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors who either: 

4 

	

	

                          
(A)      are
directors of the Company as of the date hereof; 

                          
(B)      are
elected, or nominated for election, to the Board of Directors of the Company with the
affirmative votes of at least a majority of the directors of the Company who are
Incumbent Directors described in (A) above at the time of such election or nomination; or 

                          
(C)      are
elected, or nominated for election, to the Board of Directors of the Company with the
affirmative votes of at least a majority of the directors of the Company who are
Incumbent Directors described in (A) or (B) above at the time of such election or
nomination. 

     Notwithstanding
the foregoing, “Incumbent Directors” shall not include an individual
whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company. 

     6.5“Company” means Elantec Semiconductor, Inc., a Delaware corporation, and any successor
thereto. 

     6.6“Covered
Termination” means an Involuntary Termination or a Voluntary Termination for Good
Reason within twelve (12) months following a Change in Control. No other event shall be a
Covered Termination for purposes of this Agreement.  

     6.7“Date
of Covered Termination” means the First Date following the last date of the
executive’s employment with the Company.  

     6.8“Date
of Notice of Termination” means the date the executive is given notice, either
verbal or written, that his employment with the Company has been or will be terminated.  

     6.9
“Involuntary Termination” means Executive’s dismissal or
discharge by the Company (or, if applicable, by the successor entity) for
reasons other than fraud, misappropriation or embezzlement on the part of
Executive which resulted in material loss, damage or injury to the Company.
Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for one of these reasons, unless and until there shall have been
delivered to Executive a copy of a resolution, duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the
Company’s Board of Directors at a meeting of the Board called and held for
the purpose (after reasonable notice to Executive and an opportunity for the
Executive, together with Executive’s counsel, to be heard before the Board
of Directors), finding that in the good faith opinion of the Board of Directors,
Executive was guilty of conduct set forth in the immediately preceding sentence
and specifying the particulars thereof in detail. 

     The
termination of an Executive’s employment would not be deemed to be an
“Involuntary Termination” if such termination occurs as a result of
the death or disability of Executive. 

     6.10
“Voluntary Termination for Good Reason” means that the
Executive voluntarily terminates his employment after any of the following are
undertaken without Executive’s express written consent: 

5 

	

	

             
(a)      
the  assignment  to  Executive  of any duties or  responsibilities  which  result in any
diminution  or  adverse  change  of  Executive's  position,  status or  circumstances  of  employment  as in effect
immediately  prior to a Change in Control of the Company;  any removal of Executive  from or any failure to reelect
Executive  to any of such  positions,  except in  connection  with the  termination  of his  employment  for death,
disability,  retirement, fraud, misappropriation,  embezzlement or any other voluntary termination of employment by
Executive other than Voluntary Termination for Good Reason;

             
(b)      
a reduction  by the  Company in  Executive's  Annual  Base Pay or  targeted  annual cash
incentive bonus in effect at the time;

             
(c)      
any  failure by the  Company to  continue  in effect any  benefit  plan or  arrangement,
including  incentive plans or plans to receive  securities of the Company,  in which Executive is  participating at
the time of a Change in Control of the Company  (hereinafter  referred to as "Benefit Plans"), or the taking of any
action by the Company which would adversely  affect  Executive's  participation in or reduce  Executive's  benefits
under any Benefit  Plans or deprive  Executive of any fringe  benefit  enjoyed by Executive at the time of a Change
in Control of the Company,  provided,  however, that Executive may not terminate for Good Reason following a Change
in Control of the Company if the Company  offers a range of benefit  plans and  programs  which,  taken as a whole,
are comparable to the Benefit Plans as determined in good faith by Executive;

             
(d)      
a relocation of Executive,  or the Company's  principal executive offices if Executive's
principal  office is at such  offices,  to a location  more than  fifteen  (15) miles  from the  location  at which
Executive performed  Executive's duties prior to a Change in Control of the Company,  except for required travel by
Executive  on the  Company's  business to an extent  substantially  consistent  with  Executive's  business  travel
obligations at the time of a Change in Control of the Company;

             
(e)      
any breach by the Company of any provision of this agreement; or

             
(f)      
any failure by the Company to obtain the  assumption of this  agreement by any successor
or assign of the Company. 

     6.11
“Welfare Benefits” means benefits providing for coverage or
payment in the event of Executive’s death, disability, illness or injury
that were provided to Executive immediately before a Change in Control, whether
taxable or non-taxable and whether funded through insurance or otherwise. 

ARTICLE VII
GENERAL
PROVISIONS

     7.1
Employment Status. This Agreement does not constitute a contract of
employment or impose on Executive any obligation to remain as an employee, or
impose on the Company any obligation (i) to retain Executive as an employee,
(ii) to change the status of Executive as an at-will employee, or (iii) to
change the Company’s policies regarding termination of employment. 

     7.2
Notices. Any notices provided hereunder must be in writing and such
notices or any other written communication shall be deemed effective upon the
earlier of personal delivery (including personal delivery by telex or facsimile)
or the third day after mailing by first class mail, to the Company at its
primary office location and to Executive at his address as listed in the
Company’s payroll records. Any payments made by the Company to Executive
under the terms of this Agreement shall be delivered to Executive either in
person or at his address as listed in the Company’s payroll records. 

6 

	

	

     7.3
Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein. 

     7.4
Waiver. If either party should waive any breach of any provisions of the
Agreement, he or it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement. 

     7.5
Complete Agreement. This Agreement, including Exhibit A and other written
agreements referred to in this Agreement, constitutes the entire agreement
between Executive and the Company and it is the complete, final, and exclusive
embodiment of their agreement with regard to this subject matter. It is entered
into without reliance on any promise or representation other than those
expressly contained herein. 

     7.6
Amendment or Termination of Agreement. This Agreement may be changed or
terminated only upon the mutual written consent of the Company and Executive.
The written consent of the Company to a change or termination of this Agreement
must be signed by an executive officer of the Company after such change or
termination has been approved by the Compensation Committee of the
Company’s Board of Directors. 

     7.7
Counterparts. This Agreement may be executed in separate counterparts,
any one of which need not contain signatures of more than one party, but all of
which taken together will constitute one and the same Agreement. 

     7.8
Headings. The headings of the Articles and sections hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof. 

     7.9
Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of and be enforceable by Executive and the Company, and their
respective successors, assigns, heirs, executors and administrators, except that
Executive may not assign any of his duties hereunder and he may not assign any
of his rights hereunder without the written consent of the Company, which
consent shall not be withheld unreasonably. 

     7.10 Attorney Fees.
If Executive brings any action to enforce his rights hereunder, Executive
shall be entitled to recover his reasonable attorneys' fees and costs incurred in
connection with such action, regardless of the outcome of such action. 

     7.11
Choice of Law. All questions concerning the construction, validity and interpretation of
this Agreement will be governed by the law of the State of California. 

7 

	

	

     7.12
Non-Publication. The parties mutually agree not to disclose publicly the
terms of this Agreement except to the extent that disclosure is mandated by
applicable law. 

     7.13
Construction of Plan. In the event of a conflict between the text of the
Agreement and any summary, description or other information regarding the
Agreement, the text of the Agreement shall control. 

     IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and
year written above. 

ELANTEC
SEMICONDUCTOR, INC.
a Delaware
Corporation

	

By: /s/ James V. Diller
——————————————

James V. Diller
Chairman of the Board	

By: /s/ Richard M. Beyer
——————————————

Richard M. Beyer
President and Chief Executive Officer

	

Exhibit A: Employee Agreement and
Release 

8 

	

Page 1 of 2 

Exhibit A

Elantec
Semiconductor, Inc.

Employee
Agreement and Release

     I
understand and agree completely to the terms set forth in the foregoing
agreement. 

     I
hereby confirm my obligations under the Company’s standard form of
proprietary information agreement. 

     I
acknowledge that I have read and understand Section 1542 of the California Civil
Code which reads as follows: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected this
settlement with the debtor.” I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims I may have against the
Company. 

     Except
as otherwise set forth in this Agreement, I hereby release, acquit and forever
discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification) I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
Effective Date of this Agreement, including but not limited to: all such claims
and demands directly or indirectly arising out of or in any way connected with
my employment with the Company or the termination of that employment, including
but not limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination
in Employment Act of 1967, as amended (“ADEA”); the federal American
with Disabilities Act of 1990; the California Fair Employment and Housing Act,
as amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing; provided, however, that nothing in this paragraph shall be
construed in any way to release the Company from its obligation to indemnify you
pursuant to the Company’s Indemnification Agreement and to provide you with
continued coverage under the Company’s directors and officers liability
insurance policy to the same extent that it has provided such coverage to
previously departed officers and directors of the Company. 

	

Page 2 of 2 

     I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights
I may have under ADEA. I also acknowledge that the consideration given for the
waiver and release in the preceding paragraph hereof is in addition to anything
of value which I was already entitled. I further acknowledge that I have been
advised by this writing, as required by the ADEA, that: (a) my waiver and
release do not apply to any rights or claims that may arise after the Effective
Date of this Agreement; (b) I have the right to consult with an attorney prior
to executing this Agreement; (c) I have twenty-one (21) days to consider this
Agreement (although I may choose to voluntarily execute this Agreement earlier);
(d) I have seven (7) days following the execution of this Agreement by the
parties to revoke the Agreement; and (e) this Agreement shall not be effective
until the date upon which the revocation period has expired, which shall be the
eighth day after this Agreement is executed by me, provided that the Company has
also executed this Agreement by that date (“Effective Date”). 

			By: ______________________________ 

Date: ______________________________

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