Document:

Exhibit 10.17

 

NEUROMETRIX, INC.

 

Management Retention and Incentive
Plan

 

1.            Purpose
of the Plan. The purpose of this Management Retention and Incentive Plan (the “Plan”) is to provide the
executive officers and certain other key employees of NeuroMetrix, Inc., a Delaware corporation (the “Company”),
listed on Schedule A hereto (the “Participants,” and each, a “Participant”) with consideration
in the event of a Change of Control Transaction (as defined below) involving the Company and another entity (the “Successor
Company”) based on the allocations listed on Schedule A hereto (the “Percentage Interest”). These
allocations relate to the Total Consideration (as defined below) to be received in the Change of Control Transaction by the Company
and/or its stockholders. The Plan is designed to retain the Company’s executive officers and certain key employees while
providing an incentive to continue to build corporate value. The Plan has been structured to work in conjunction with, and not
replace, the Company’s other incentive programs such as its equity plans, severance arrangements, compensation and bonus
plan, and other benefits. As described further herein, the consideration to be paid to each Participant will be reduced over time
as a result of any issuances of future equity grants to Participants. This Plan, as amended, shall be effective as of March 1,
2016.

 

2.            Definitions.
For the purposes of this Plan, capitalized terms not defined in Section 1 above shall have the following meanings:

 

(a)           Additional
Plan Consideration shall mean, for any Participant, the portions of the Contingent Consideration to be received by the Participant
pursuant to the Plan as calculated pursuant to Section 6 of the Plan.

 

(b)           Board
shall mean the Board of Directors of the Company.

 

(c)           Change
of Control Transaction shall mean the first to occur of the following events:

 

(i)            Ownership
Change through Company Stock Sale or Third Party Tender Offer: any “person” or “group” as such terms
are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”), becomes a beneficial
owner, as such term is used in Rule 13d-3 promulgated under the Act, of securities of the Company representing more than 50% of
the combined voting power of the outstanding securities of the Company having the right to vote in the election of directors. This
is not intended to include equity financing transactions involving passive, non-strategic investors; or

 

(ii)            Merger
Transaction: a merger or consolidation of the Company 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 or the parent of such corporation) more than fifty percent
(50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such
corporation, as the case may be, outstanding immediately after such merger or consolidation; or

 

(iii)            Sale
of Assets: the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction
requiring stockholder approval;

 

provided that a Change of
Control Transaction shall be interpreted in a manner, and limited to the extent necessary, so that it will not cause adverse tax
consequences under Section 409A of the Code.

 

(d)           Code
shall mean the Internal Revenue Code of 1986, as amended, including any successor statute, regulation and guidance thereto.

 

     

     

    

 

(e)           Common
Stock shall mean the common stock, $0.0001 par value per share, of the Company.

 

(f)            Common
Stock Equivalents shall mean rights, options, or other instruments to subscribe for, purchase or otherwise acquire Common Stock
pursuant to any equity plan of the Company.

 

(g)           Contingent
Consideration shall mean the portion of the Total Consideration to be received after the date of the closing of the Change
of Control Transaction, the receipt of which will be contingent upon the passage of time or the occurrence or non-occurrence of
some event(s) or circumstance(s), including, without limitation, amounts of Total Consideration subject to an escrow, a purchase
price adjustment, an earn-out, or indemnity claims.

 

(h)          
RESERVED

 

(i)            Equity
Plan Issuances shall mean with respect to a Participant any shares of Common Stock issued by the Company pursuant to any equity
plan of the Company and any Common Stock Equivalents issued to a Participant, excluding Founder Shares.

 

(j)            Founder
Shares shall mean any shares of Common Stock of the Company issued to a Participant prior to July 22, 2004.

 

(k)            Initial
Consideration shall mean the amount of the Total Consideration that is not Contingent Consideration.

 

(l)            Initial
Plan Consideration shall mean, for any Participant, the portion of the Initial Consideration to be received by the Participant
pursuant to the Plan as calculated pursuant to Section 6 of the Plan.

 

(m)            Plan
Consideration shall mean, for any Participant, the portion of the Total Consideration to be received by the Participant pursuant
to the Plan as calculated pursuant to Section 6 of the Plan which shall be comprised of the Initial Plan Consideration and any
Additional Plan Consideration.

  

(n)            Representative
shall mean one or more members of the Board or persons designated by the Board prior to, or in connection with the Change of Control
Transaction.

 

(o)            Total
Consideration shall mean the total amount of cash and the fair market value of all other consideration paid or payable including
Contingent Consideration by the Successor Company or any other person to the Company or its securityholders in connection with
the Change of Control Transaction, including amounts paid or payable in respect of convertible securities, warrants, stock appreciation
rights, option or similar rights, whether or not vested and any additional amounts paid by the Successor Company in connection
with this Plan, less (i) transaction fees incurred in the course of the Change of Control Transaction (such as fees related
to legal services, accounting services, financial advisory services, investment banking services or other professional services),
plus (ii) any debt or other liabilities of the Company that are paid off, satisfied or otherwise assumed by the Successor
Company, specifically including, but not limited to, any bank debt or line of credit and accounts payable (excluding any liabilities
under this Plan), and less (iii) any taxes payable by the Company (but not those payable by the stockholders) as a result of the
Change of Control Transaction. The fair market value of any securities (whether debt or equity) or other property shall be determined
as follows:

 

(i)            the
value of securities that are freely tradable in an established public market will be determined by the method or methods set forth
in the applicable contract or contracts concerning the Change of Control Transaction; and

 

(ii)            the
value of securities that are not freely tradable or have no established public market, and the value of aggregate consideration
that consists of other property, shall be the fair market value as determined in good faith by the Board.

 

     

     

    

  

3.            Interpretation
and Administration of the Plan. Prior to the Change of Control Transaction, the administrator of the Plan will be the Compensation
Committee of the Board. After the Change of Control Transaction, the administrator of the Plan will be the Representative. The
administrator will be responsible for interpreting and administering all provisions hereof. All actions taken by the administrator
in interpreting the terms of the Plan and administration of the Plan will be final, binding and conclusive on all Participants.
The administrator shall not be personally liable by reason of any contract or other instrument related to the Plan executed by
an individual or on its or their behalf in its or their capacity as the administrator, or for any mistake of judgment made in good
faith, and the Company shall indemnify and hold harmless each individual to whom any duty or power relating to the administration
or interpretation of the Plan may be allocated or delegated, against any cost or expense (including legal fees) or liability arising
out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or bad faith.

  

4.            Eligibility
to Earn Plan Consideration. Except as otherwise provided in Section 9 below, each Participant will have the right to receive
Plan Consideration, subject to the Participant’s continued employment or service with the Company through the date of the
closing of the Change of Control Transaction unless terminated by the Company other than for cause within 180 days prior to the
announcement of the Change of Control Transaction. If a Participant’s service to the Company in all capacities (whether as
an employee, consultant, advisor, director or any other service provider) terminates for any reason prior to the date of the closing
of the Change of Control Transaction (other than by the Company not for cause within 180 days of the announcement of the Change
of Control Transaction), whether initiated by the Company or the Participant, and with or without cause, then such Participant
shall no longer be considered a “Participant” thereafter for purposes of the Plan, and such Participant will not be
entitled to receive any Plan Consideration hereunder. The Company in its sole discretion will determine whether a Participant’s
service relationship has terminated for this purpose.

 

5.            Type
of Plan Consideration. Pursuant to this Plan, the Participants who are employed by the Company on the date of the closing of
a Change of Control Transaction, or whose employment is terminated by the Company not for cause within 180 days of a Change of
Control Transaction, shall receive their Plan Consideration from the Successor Company in cash and at the times set forth in Section
8 of the Plan.

 

6.            Calculation
of Plan Consideration. Each Participant’s Plan Consideration shall be calculated as follows:

 

The Initial
Plan Consideration shall be calculated on the date of the closing of the Change of Control Transaction by multiplying the Participant’s
Percentage Interest by the Initial Consideration and the resulting product shall then be reduced by (i) the amount of Initial Consideration
paid or payable to the Participant in the Change of Control Transaction as a result of ownership of Equity Plan Issuances (without
regard to any tax withholding requirements of the Company or the Successor Company); (ii) the value of any Common Stock Equivalents
held by the Participant and assumed by the Successor Company in the Change of Control Transaction; (iii) the value of any shares
of Common Stock issued to a Participant by the Company pursuant to any Equity Plan Issuances that were sold by the Participant
after the initial date of this Plan (August 2, 2012) and prior to the Change of Control Transaction; and (iv) the value of any
shares of Common Stock or Common Stock Equivalents issued to a Participant by the Company pursuant to any Equity Plan Issuances
that are retained by the Participant after the Change of Control Transaction. The value of the amounts set forth in (ii), (iii)
and (iv) above shall be calculated by determining the deemed price per share of the Common Stock in the Change of Control Transaction
as determined by the Board in its sole discretion based on the method or methods set forth in the applicable contract or contracts
concerning the Change of Control Transaction and after subtracting any exercise price or purchase price paid or to be paid by the
Participant in connection with such issuances and, in the case of Common Stock Equivalents, shall be valued using a Black Scholes
calculation of such Common Stock Equivalents immediately prior to the closing of the Change of Control Transaction using the same
deemed price per share of Common Stock in such calculation.

  

For avoidance
of doubt the Participant’s Plan Consideration shall not be reduced by any shares of Common Stock purchased on the open market
or in a financing pursuant to which the Participant paid the same purchase price for such shares as third party investors.

 

     

     

    

  

The Additional
Plan Consideration shall be calculated by multiplying the Contingent Consideration to be received by a fraction the numerator of
which is each Participant’s Initial Plan Consideration and the denominator of which is the Initial Consideration.

 

7.           
RESERVED

 

8.            Payment
of Plan Consideration. If the conditions for earning the Plan Consideration set forth herein are satisfied, each Participant
will be entitled to earn and be paid his or her Plan Consideration as follows:

 

(a)           Each
Participant will be paid by the Successor Company from the Initial Consideration the Participant’s Initial Plan Consideration
in a lump sum by no later than the thirtieth (30th) day following the date of the closing of the Change of Control Transaction.

 

(b)           Each
Participant will be paid by the Successor Company from the Contingent Consideration the Participant’s Additional Plan Consideration
in lump sums, as, if and when the Contingent Consideration is paid or released to the Company or its stockholders. However, if
a condition (as described in Treasury Regulation Section 1.409A-1(d)), when applied to any Contingent Consideration, would not
constitute a “substantial risk of forfeiture” (as defined in Treasury Regulation Section 1.409A-1(d)), and Section
1.409A-3(i) (5) (B) such that the Additional Plan Consideration related to such condition would not be reasonably likely to be
payable in compliance with either Treasury Regulation Section 1-409A-1(b)(4) or Treasury Regulation Section 1.409A-3(i)(5)(iv)(A),
or the Board determines in its reasonable good faith that any Additional Plan Consideration is not otherwise payable under the
regular payment schedule of this Plan in compliance with or under an exemption from Section 409A of the Code, then the Participant
instead will be paid the fair market value (as of the date of the closing of the Change of Control Transaction), as determined
by the Board in its reasonable good faith, of the Additional Plan Consideration related to such condition (that is, the present
value of the Additional Plan Consideration that may be earned upon satisfaction of the condition), in a lump-sum on the thirtieth
(30th) day following the date of the closing of the Change of Control Transaction.

 

(c)           It
is intended that each installment of the payments provided under the Plan is a separate “payment” for purposes of Section
1.409A-2(b)(2)(i) of the Treasury Regulations. For the avoidance of doubt, it is intended that the Plan Consideration satisfy,
to the greatest extent possible, the exemption from the application of Section 409A of the Code and the Treasury Regulations and
other guidance issued thereunder and any state law of similar effect (collectively “Section 409A”) provided
under Treasury Regulations Section 1.409A-1(b)(4) and, to the extent not so exempt, that the Plan Consideration comply, and the
Plan be interpreted to the greatest extent possible as consistent, with Treasury Regulations Section 1.409A-3(i)(5)(iv)(A) –
that is, as “transaction-based compensation.” Accordingly, any Plan Consideration will only be paid pursuant to this
transaction-based exemption from Section 409A in the case of a Change of Control Transaction that is also a “change in ownership
of a corporation” or “change in ownership of a substantial portion of a corporation’s assets” defined in
Treasury Regulation Sections 1.409A-3(i)(5)(v) and (vii). Additionally, no Plan Consideration that is being paid in reliance
on the transaction-based exemption from Section 409A will be earned or paid after the fifth (5th) anniversary of the date of the
closing of the Change of Control Transaction and the Participants will not be entitled to any payments under the Plan with respect
to any Contingent Consideration after such date, subject, however, to Treasury Regulation Section 1.409A-3(g) (regarding timing
of payments for certain disputed payments).

  

9.            Release.
As a further condition to earning any Plan Consideration, a Participant must execute and allow to become effective a general release
of claims in substantially the form of Exhibit A hereto prior to the thirtieth (30th) day following the date of the
closing of the Change of Control Transaction, and if the form of release is provided to the Participant sooner than the date of
the closing of the Change of Control Transaction, within thirty (30) days of the date the Participant receives the form of release.
If any Participant refuses to execute such release and allow it to become effective within such time period, then such Participant
will not be eligible to earn Plan Consideration, and the Participant’s rights under this Plan to receive any consideration
will be forfeited.

 

10.           Withholding
of Compensation. The Successor Company will withhold from any payments under the Plan any amount required to satisfy
the income and employment tax withholding obligations arising under applicable federal, state and local laws in respect of the
Plan Consideration. Each Participant should contact his or her personal legal or tax advisors with respect to the benefits provided
by the Plan. Neither the Company nor any of its employees, directors, officers or agents are authorized to provide any tax advice
to Participants with respect to the benefits provided under the Plan.

 

     

     

    

  

11.            Adjustments
for Excess Parachute Payments. In the event that (A) any consideration to be received by the Participant in connection with
a Change of Control Transaction (whether pursuant to the terms of the Plan or any other plan, arrangement, or agreement with the
Company, any person whose actions result in a Change of Control Transaction, or any person affiliated with the Company or such
person) (collectively “Parachute Payments”) would not be deductible by the Successor Company, an affiliate or
other person making such payment or providing such benefit (in whole or part) as a result of Section 280G of the Code; and (B)
it is determined in good faith by the administrator that the net after-tax amount of the Parachute Payments retained by the Participant
after deduction for any excise tax imposed by Section 4999 of the Code and any federal, state, and local income and employment
taxes would not exceed the net after-tax amount of the Parachute Payments retained by the Participant after limiting the Parachute
Payments to an amount that is 2.99 times the Participant’s “base amount” (as such term is defined by Section
280G of the Code), then the Parachute Payments shall be reduced until no portion of the Parachute Payments is not deductible.

  

For purposes of this provision,

 

(i)            no
portion of the Parachute Payments the receipt or enjoyment of which the Participant shall have effectively waived in writing prior
to the date of payment of the Parachute Payments shall be taken into account;

 

(ii)           no
portion of the Parachute Payments shall be taken into account which in the opinion of the Company’s or the Successor Company’s
independent auditors or tax counsel serving as such immediately prior to the Change of Control Transaction (or other tax counsel
selected by the administrator) does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of
the Code;

 

(iii)         the
Parachute Payments shall be reduced only to the extent necessary so that the Parachute Payments (other than those referred to in
the immediately preceding clause (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as deductions, in the opinion
of the auditor or tax counsel referred to in such clause (ii); and

 

(iv)          the
value of any non-cash benefit or any deferred payment or benefit included in the Parachute Payments shall be determined by the
Company’s or the Successor Company’s independent auditors or tax counsel based on Sections 280G and 4999 of the Code
and the regulations for applying those Code Sections, or on substantial authority within the meaning of Section 6662 of the Code.

 

12.            Amendments.
This Plan may be amended by the Compensation Committee or the Board, as applicable at any time to amend Schedule A of this Plan
to add additional Participants. In addition, the Plan may also be amended at any time by the Compensation Committee or the
Board, as applicable, provided that no amendment shall adversely affect the rights of a Participant hereunder without the written
consent of such Participant. Notwithstanding anything herein to the contrary, the Board reserves the right to equitably adjust
the Percentage Interest of a Participant if, in the context of an actual Change of Control Transaction, the definitions or calculations
herein do not fairly represent the parties’ understanding regarding the amount, allocation or payment of the sale proceeds
to Participants.

 

13.            Not
a Condition of Employment; No Guarantee of Employment. The Plan is not a term or condition of any individual’s employment
and no Participant shall have any legal right to payments hereunder except to the extent that all conditions required by a Participant
have been satisfied in accordance with the terms set forth herein. The Plan is intended to provide a financial incentive to Participants
and is not intended to confer upon Participants any rights to continued employment, consultancy or other service provider relationship
other than those set out in any separate agreement between the Company and such individuals governing such relationship. Each such
Participant’s service may be terminated by the Company, the Successor Company or the Participant at any time for any reason,
subject to any agreements then in effect regarding such Participant’s service or the termination thereof.

     

     

    

   

14.            No
Equity Interest; Status as Creditor. Neither the Plan nor the Percentage Interest hereunder creates or conveys any equity or
ownership interest in the Company or any rights commonly associated with any such interest, including, but not limited to, the
right to vote on any matters put before the Company’s stockholders. A Participant’s sole right under the Plan will
be as a general unsecured creditor of the Company and the Successor Company.

 

15.            No
Assignment or Transfer by Participant. None of the rights, benefits, obligations or duties under the Plan may be assigned or
transferred by any Participant except by will or under the laws of descent and distribution. Any purported assignment or transfer
by any such Participant will be void.

 

16.            Assumption
by Successor Company. As a condition to the consummation of a Change of Control Transaction, in addition to any obligations
imposed by law upon the Successor Company, the Company shall require the Successor Company to expressly assume the Plan and agree
to perform obligations hereunder. All payments under this Plan shall be made by the Successor Company. Neither the Company nor
any former or current director, officer, employee or consultant of the Company, nor any agent of any such person or of the Company,
shall be personally liable in the event the Company is unable to make payments under this Plan.

 

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

 

18.            Governing
Law. This Plan and the rights and obligations of a Participant under the Plan will be governed by and interpreted, construed
and enforced in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The parties
hereby submit to the jurisdiction of the state and federal courts of the Commonwealth of Massachusetts for the resolution of any
claims, disputes or other proceedings arising under this Plan.

 

19.            Entire
Agreement. The Plan sets forth all of the agreements and understandings between
the Company and the Participants with respect to the subject matter hereof, and supersedes and terminates all prior agreements
and understandings between the Company and the Participants with respect to the subject matter hereof.

  

     

     

    

 

SCHEDULE A

 

	NAME	 	PERCENTAGE 
 INTEREST	 
	 	 	 	 	 
	Gozani	 	 	5.60	%
	Higgins	 	 	2.30	%
	McGillin	 	 	1.90	%

 

     

     

    

 

Exhibit A

 

FORM OF GENERAL RELEASE

 

I understand that I am a Participant
in the Management Retention and Incentive Plan (the “Plan”) of NeuroMetrix, Inc. (the “Company”).
In consideration of receiving certain benefits under the Plan, I have agreed to sign this Release. I understand that I am not entitled
to benefits under the Plan unless I sign this Release on or before ___________.1/

 

In consideration for the benefits
I am receiving under the Plan, I hereby release (i) the Company; (ii) the [name of Successor Company will be inserted at time
of the Change of Control Transaction] (the “Successor Company”); and (iii) each of the foregoing person’s
respective current and former officers, directors, agents, attorneys, employees, shareholders, parents, subsidiaries, and affiliates
(collectively, the “Releasees”) from any and all claims, liabilities, demands, causes of action, attorneys’
fees, damages, or obligations of every kind and nature, whether or not arising from contract, intentional or negligent tort, fraud,
fraud in the inducement, breach of fiduciary duty or duty of loyalty, local, state or federal ordinance, rule, regulation or statute,
or any other matter and whether known or unknown, (collectively, “Claims”) arising at any time prior to and
including the date I sign this Release (the “Release Date”). This general release includes, but is not limited
to, any Claims related to or arising out of: (i) my employment with the Company; (ii) my rights as a shareholder of the Company,
including my entitlement to receive any stock, option or any other equitable interest or right convertible into an equity interest
in the Company; (iii) any contract, whether express or implied, written or oral; (iv) any tort, including tort of wrongful termination;
and (v) the United States Constitution, any State Constitution, or any federal, state or other governmental statute, regulation
or ordinance, including, without limitation, the National Labor Relations Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Older Workers’ Benefit Protection Act of 1990, the Americans with Disabilities
Act of 1990, the Civil Rights Act of 1871, the Civil Rights Act of 1991, the Equal Pay Act of 1963, the Worker Adjustment and Retraining
Notification Act of 1988, the Employee Retirement Income Security Act of 1974, and the Massachusetts Fair Employment Practices
Act, the Massachusetts Wage and Hour Laws, [all other applicable state law statutes for employees employed in states other than
Massachusetts], all as amended.

 

I understand and expressly agree
that this Release extends to all claims prior to the Release Date of every nature and kind whatsoever, known or unknown, suspected
or unsuspected, past or present.

 

I warrant that as of the Release
Date, I have not commenced, initiated or made any Claim and that I will not at any time thereafter commence, initiate or make any
Claim whatsoever, whether direct or indirect, express or derivative, against the Company, the Successor Company or any of the Releasees,
in respect of any Released Matter. Notwithstanding the above, I understand that I am not releasing any of the following rights
and may after the Release Date initiate an action to enforce the following rights: (1) any Claim that cannot be waived under applicable
state or federal law, (2) any rights that I have to be indemnified (including any right to reimbursement of expenses), arising
under applicable law, the Certificate of Incorporation or by-laws (or similar constituent documents of the Company) or any indemnification
agreement between me and the Company, or any directors’ and officers’ liability insurance policy of the Company, for
any liabilities arising from my actions within the course and scope of my employment with the Company or within the course and
scope of my role as a member of the Board of Directors of the Company, (3) claims for any amounts due to me under the Plan, (4)
claims for vested retirement benefits under any tax-qualified retirement plan of the Company, or (5) claims for any compensation
or bonuses that have been earned and accrued for periods ending on or prior to the Release Date, but which have not yet been paid.
I am not releasing and nothing in this Release will prevent me from filing, cooperating with, or participating in any proceeding
before the Equal Employment Opportunity Commission, or the Department of Labor, except that I hereby acknowledge and agree that
I will not recover any monetary benefits in connection with any such proceeding with regard to any Claim released in this Release.
Nothing in this Release will prevent me from challenging the validity of my general release in a legal or administrative proceeding.

 

	 	1/	Insert date that is 30 days from date of Participant’s receipt.

 

     

     

    

  

By signing and returning this Agreement,
I acknowledge that:

 

		(1)	I have carefully read and fully understand the terms of
the Plan and this Release;

 

		(2)	I have entered into this Release voluntarily and I knowingly
release all Claims that I may have against the Company, the Successor Company and the Releasees; and

 

		(3)	The Company advised me that I have the right to and that
I should consult with an attorney of my choosing prior to signing this Release.

 

I may review and consider this Release for a period of
up to twenty-one (21) days from the date that I receive it. I agree and understand that my failure to execute and deliver this
Release on or before twenty-one (21) days after the date I receive it will release the Company and the Successor Company from any
obligation under the Plan to provide any benefits to me. To the extent I execute this Release within less than twenty-one (21)
days after the date I receive it, I acknowledge that my decision was entirely voluntary and that I waive the balance of my time.

 

I will be entitled to revoke this Release at any time
within seven (7) days, provided I timely execute and deliver to the Company a written revocation of this Release. Such revocation
must be delivered in writing, by certified mail, by hand or courier service (signature of receipt required) within the time permitted
to the Chief Executive Officer of the Company at his or her office. If I elect to exercise this right to revoke this Release, I
understand that I will forfeit any and all rights to receive any benefits that might otherwise be due to me under the Plan following
my revocation.

  

I acknowledge that the Company may
be required to withhold taxes on amounts to be paid to me under the Plan.

 

I understand and accept that the
final decision as to the amounts that I have earned under the Plan will be made by the Board of Directors of the Company in accordance
with the Plan.

	 	 	 	 	 	 
	Date:	 	 	By:	 	 
	 	 	 	Name:Exhibit

   Exhibit 10.1 

FORM OF INDEMNIFICATION AGREEMENT 

This Indemnification Agreement (“Agreement”) is made as of [          ], by and between Alpha and Omega Semiconductor Limited, an exempted limited liability company organized under the laws of Bermuda (the “Company”), and [             ] (“Indemnitee”). 
    
WHEREAS, the Company wishes to attract and retain the services of Indemnitee, to serve as a member of the board of directors (“Director”) or as an officer (“Officer”) of the Company or its Subsidiaries; and 

WHEREAS, the Company recognizes Indemnitee’s need for protection against personal liability for actions taken, or not taken, in good faith by Indemnitee in his or her capacity as a Director or Officer, as applicable, and in order to assure Indemnitee’s continued service to the Company, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee;

 WHEREAS, the Indemnitee is willing to serve, or to continue to serve, as a director or officer of the Company, as the case may be, if the Indemnitee is furnished the indemnity provided for herein by the Company; and

NOW, THEREFORE, in consideration of the promises and the covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Indemnitee do hereby covenant and agree as follows:
 
1. Indemnification. Subject to the operation of Section 2, Indemnitee will be indemnified and held harmless by the Company to the fullest extent authorized by the Companies Act of Bermuda (as amended, the “Companies Law”), as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment) against any and all Expenses (as defined below), judgments, penalties, fines, liabilities, losses, taxes and amounts paid in settlement, in each case to the extent actually incurred by Indemnitee or on Indemnitee’s behalf in connection with any threatened, pending or completed Proceeding (as defined below) or any claim, issue or matter therein, which Indemnitee is, or is threatened to be made, a party to or participant in by reason of such Indemnitee’s status as a Director or Officer of the Company or its Subsidiaries, as the case may be. The rights of indemnification provided by this Section 1 will exist as to Indemnitee after he or she has ceased to be a Director or Officer, as the case may be, and will inure to the benefit of his or her heirs, executors, administrators and personal representatives. Notwithstanding the foregoing, the Company will indemnify Indemnitee seeking indemnification in connection with a Proceeding initiated by Indemnitee only if such Proceeding was authorized by the Board of Directors of the Company. The Company hereby agrees to indemnify such Indemnitee’s heirs, executors, administrators and personal representatives as express third-party beneficiaries hereunder to the same extent and subject to the same limitations 

applicable to Indemnitee hereunder for claims arising out of the status of such persons as heirs, executors, administrators and personal representatives of an Indemnitee. 

2. Standard of Care. Indemnification will be provided pursuant to this Agreement in respect of any negligence, default, breach of duty or breach of trust of Indemnitee in relation to the Company or any Subsidiary, provided that, no indemnification will be provided if a determination is made by a court of appropriate jurisdiction that the conduct of the Indemnitee involved fraud or dishonesty.
 
3. Notice/Cooperation by Indemnitee. Indemnitee will, as a condition precedent to his or her right to be indemnified pursuant to this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Such notice will contain the written affirmation of Indemnitee that the standard of conduct necessary for indemnification hereunder has been satisfied. Notice to the Company will be directed to the Chief Executive Officer or Chairman of the Board of the Company in the manner set forth below. Indemnitee will give the Company such information and cooperation as it may reasonably require and as is within Indemnitee’s power. A delay in giving notice under this Section 3 will not invalidate Indemnitee’s right to be indemnified under this Agreement except to the extent such delay prejudices the defense of the claim or the availability to the Company of insurance coverage for such claim. All notices, requests, demands and other communications under this Agreement will be in writing and may be given by email, facsimile or similar writing and express mail or courier delivery or in person delivery, but not by ordinary mail delivery. All such notices, requests and other communications will be deemed received: (i) if given by email or fax, when transmitted to the email address or fax number specified on the signature page of this Agreement, upon receipt; (ii) if given by express mail, air courier or in person, when delivered. 

4. Advancement of Expenses to Indemnitee Prior to Final Disposition. The Company will advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding in which Indemnitee is a party or otherwise involved by reason of Indemnitee’s status as a Director or Officer of the Company, as the case may be, within 10 days after the receipt by the Company of a written statement from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements will reasonably evidence the Expenses incurred by Indemnitee and will be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses so advanced if it is ultimately be determined by final judicial decision of a court of competent jurisdiction, from which decision there is no further right to appeal that such Indemnitee is not entitled to be indemnified against such Expenses. Indemnitee’s obligation to reimburse the Company for any Expenses will be unsecured and without interest, and will be accepted by the Company without reference to Indemnitee’s ability to repay Expenses. 

5. Nature of Rights. The failure of the Company (including its Board of Directors or any committee or subgroup thereof, independent legal counsel, or shareholders) to make a determination concerning the permissibility of such indemnification or advancement of Expenses for Indemnitee will not be a defense to the action and will not create a presumption that such indemnification or advancement is not permissible. It is the parties’ intention that if the Company contests Indemnitee’s 

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right to indemnification, the question of Indemnitee’s right to indemnification will be for the court of appropriate jurisdiction to decide, and neither the failure of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its shareholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its shareholders) that the Indemnitee has not met such applicable standard of conduct will create a presumption that Indemnitee has or has not met the applicable standard of conduct. Accordingly, if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee is entitled to be indemnified hereunder under applicable law, then (x) Indemnitee will not be required to reimburse the Company for any Expenses theretofore paid in indemnifying Indemnitee and (y) Indemnitee will be entitled to receive interim payments of Expenses pursuant to Section 4, in each case until a determination is made by such court in respect of Indemnitee’s claim for indemnification. 

6. Non-Exclusivity of Rights. The rights to indemnification and advancement of Expenses set forth in this Agreement will not be exclusive of any other right that Indemnitee may have or may hereafter acquire under any statute, provision of the Second Amended and Restated Bye-Laws of the Company, vote of shareholders or Directors of the Company or otherwise. In addition, the Indemnitee’s status as an Officer or Director may allow for indemnification under certain agreements containing indemnity provisions with another entity or protections under the organization documents of such other entity.  In those instances, the Company shall remain wholly liable for making any indemnification payments for all amounts herein notwithstanding the payment obligation of such amounts by a third party to the Indemnitee; provided, however, that if and to the extent that the Indemnitee has otherwise actually received payment for indemnifiable amount herein under any insurance policy, contract, agreement, or otherwise, the Company shall not be liable under this Agreement to make any payment to the Indemnitee with respect to any such amounts.

7. Partial and Mandatory Indemnification. 

(a) If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines or penalties actually or reasonably incurred by him or her in the investigation, defense, appeal or settlement of any Proceeding, but not, however, for the total amount thereof, the Company will nevertheless indemnify Indemnitee for the portion of such Expenses, judgments, fines or penalties to which Indemnitee is entitled. Attorneys’ fees and expenses will not be prorated but will be deemed to apply to the portion of indemnification to which Indemnitee is entitled. (b) Notwithstanding any other provision of this Agreement, but subject to Section 8, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any Proceeding, Indemnitee will be indemnified against all Expenses incurred by Indemnitee in connection therewith. 

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8. Mutual Acknowledgment. By accepting any potential benefits under this Agreement, Indemnitee acknowledges that in certain instances, applicable law or public policy may prohibit the Company from indemnifying Indemnitee pursuant to this Agreement or otherwise. 

9. Insurance. The Company shall use reasonable effort to purchase and maintain insurance, at its expense, to protect itself and Indemnitee against any liability of any character asserted against or incurred by the Company or Indemnitee, or arising out of Indemnitee’s status as a Director or Officer of the Company, as the case may be, whether or not the Company would have the power to indemnify Indemnitee against such liability under the Companies Law or the provisions of this Agreement. To the extent the Company maintains liability insurance applicable to directors, officers, managers, employees, agents or fiduciaries, Indemnitee will be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Company’s directors, officers, managers, employees, agents or fiduciaries. 

10. Settlements. (a)    The Indemnitee agrees that it will not settle, compromise or consent to the entry of any judgment as to the Indemnitee in any pending or threatened Proceeding (whether or not the Indemnitee is an actual or potential party to such Proceeding) in which Indemnitee has sought indemnification hereunder without the Company’s prior written consent, which consent will not be unreasonably withheld, unless such settlement, compromise or consent respecting such Proceeding includes an unconditional release of the Company and does not (i) require or impose any injunctive or other non-monetary remedy on the Company or its affiliates, (ii) require or impose an admission or consent as to any wrongdoing by the Company or its affiliates, or (iii) otherwise result in a direct or indirect payment by or monetary cost to the Company or its affiliates.  The term “affiliate” shall have the meaning set forth in Rule 144 of the Securities Act of 1933, as amended. 

(b)    The Company agrees that it will not settle, compromise or consent to the entry of any judgment as to the Indemnitee in any pending or threatened Proceeding (whether or not the Indemnitee is an actual or potential party to such Proceeding) in which the Indemnitee has sought indemnification hereunder without the Indemnitee’s prior written consent, which consent shall not be unreasonably withheld, unless such settlement, compromise or consent includes an unconditional release of the Indemnitee and does not (i) require or impose any injunctive or other non-monetary remedy on the Indemnitee, (ii) require or impose an admission or consent as to any wrongdoing by the Indemnitee or (iii) otherwise result in a direct or indirect payment by or monetary cost to the Indemnitee personally (as opposed to a payment to be made or cost to be paid by the Company on the Indemnitee’s behalf). 

11.     Indemnification for Expenses as a Witness.  Anything in this Agreement to the contrary notwithstanding, to the fullest extent permitted by applicable law, to the extent that the Indemnitee, by reason of the Indemnitee’s status as an Officer or Director of the Company, is or was, or is or was threatened to be made, a witness in any Proceeding to which the Indemnitee is not a party, the Indemnitee shall be indemnified against all Expenses incurred by the Indemnitee or on the Indemnitee’s behalf in connection therewith.  To the extent permitted by applicable law, the Indemnitee shall be entitled to indemnification for Expenses incurred in connection with being or threatened to be made a witness, as provided in this Section 11, regardless of whether the 

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Indemnitee met the standards of conduct (save for fraud or dishonesty) set forth in Section 2 and  hereof.

12.    Definitions. For purposes of this Agreement, the following terms will have the following meanings: 

(a) “Expenses” means all direct and indirect fees of any type or nature whatsoever, costs and expenses incurred in connection with any Proceeding, including, without limitation, all attorneys’ fees and costs, disbursements and retainers (including, without limitation, any fees, disbursements and retainers incurred by the Indemnitee pursuant to Section 11 hereof), fees and disbursements of experts, witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), court costs, filing fees, transcript costs, fees of experts, travel expenses, duplicating, imaging, printing and binding costs, telephone and fax transmission charges, computer legal research costs, postage, delivery service fees, secretarial services, fees and expenses of third party vendors; the premium, security for, and other costs associated with any bond (including supersedes or appeal bonds, injunction bonds, cost bonds, appraisal bonds or their equivalents), in each case incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding (including, without limitation, any judicial or arbitration Proceeding brought to enforce the Indemnitee’s rights under, or to recover damages for breach of, this Agreement), any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of types customarily and reasonably incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, actions, suits, or proceedings similar to or of the same type as the Proceeding with respect to which such disbursements or expenses were incurred.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding. 

(b) “Proceeding” means any threatened, pending or completed action, suit, arbitration, regulatory and self-regulatory action, mediation, alternate dispute resolution mechanism, inquiry, investigation, administrative hearing or other proceeding, whether civil, criminal, administrative, arbitrative or investigative, whether formal or informal, including a proceeding initiated by the Indemnitee pursuant to this Agreement to enforce the Indemnitee’s rights hereunder.

(c)  “Subsidiary” shall mean any entity of which the Company owns (either directly or indirectly) either (i) a general partner, managing member or other similar interest or (ii) (A) 50% or more of the voting power of the voting capital equity interests of such Entity, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such entity.  

12. Counterparts. This Agreement may be executed in one or more counterparts, each of which will constitute an original and all of which together will constitute a single agreement. 

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13. Successors and Assigns. This Agreement will be binding upon the Company and its respective successors and assigns, including any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee will stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.
 
14. Attorneys’ Fees. In the event that any action is instituted by Indemnitee under this Agreement to enforce or interpret any of the terms hereof, Indemnitee will be entitled to be paid all court costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee with respect to such action, unless as a part of such action, the court of competent jurisdiction determines that each of the material assertions made by Indemnitee as a basis for such action were not made in good faith or were frivolous. In the event of an action instituted by or in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, Indemnitee will be entitled to be paid all court costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee in defense of such action (including with respect to Indemnitee’s counterclaims and cross-claims made in such action), unless as a part of such action the court determines that each of Indemnitee’s material defenses to such action were made in bad faith or were frivolous. 

15. Choice of Law. This Agreement will be governed by and its provisions construed in accordance with the laws of Bermuda, without application of the conflict of law principles thereof. 

16. Consent to Jurisdiction. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the superior court of the State of California in and for the proper county (the “California Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the California Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of California, irrevocably Mike F. Chang of 475 Oakmead Parkway, Sunnyvale, California 94085 as its agent in the State of California for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of California, (iv) waive any objection to the laying of venue of any such action or proceeding in the California Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the California Court has been brought in an improper or inconvenient forum. 

17. Severability. The provisions of this Agreement will be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) 

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are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions will remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of the Agreement (including without limitation each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) will be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 

18. Subrogation. In the event of payment under this Agreement, the Company will be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who will execute all documents required and will do all acts that may be reasonably necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights. 

19. Amendment and Termination. No amendment, waiver or termination of this Agreement will be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement will be deemed to be or will constitute a waiver of any other provisions hereof (whether or not similar), nor will such waiver constitute a continuing waiver. 

20. Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto, including the previous form of indemnification agreement approved and adopted by the Board of Directors.

21. No Construction as Employment Agreement. Nothing contained in this Agreement will be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries or affiliated entities. 

[SIGNATURE PAGE FOLLOWS]

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

	 
	ALPHA AND OMEGA SEMICONDUCTOR LIMITED 

	 
	 

	 
	By:
	____________________________
	 

	 
	 
	Name:
	Mike F. Chang
	 
	 

	 
	 
	Title:
	 Chairman of the Board
 Chief Executive Officer
	 
	 

	 
	

Address: 

475 Oakmead Parkway 
Sunnyvale, California 94085 
Email: mchang@us.aosmd.com
Fax: (408) 830 - 9749
	 
	 

	
							
	 
	 
	 
	 
	 

	 

	 
	INDEMNITEE 
 

	 

	 
	Signature:
	___________________

	 
	Title:
	

	 
	 
Address: 
[         ]

	 

	 

[Signature Page to Indemnification Agreement]

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