Document:

Change in Control Employment Agreement with Arne Herenstein

 Exhibit 10.1 

 

							
		 	Michael L. Browne	  	Harleysville Insurance	  	Tel (215) 256-5013
		 	Chief Executive Officer	  	355 Maple Avenue	  	Fax (215) 256-5008
		 		  	Harleysville, PA 19438-2297	  	mbrowne@harleysvillegroup.com
		 		  	www.harleysvillegroup.com	  	

 

 
 July 11, 2011 
 Arne Herenstein 
 Senior Vice President 
 Harleysville Insurance 
 355 Maple Ave 
 Harleysville, PA 19438 
  

	RE:	CHANGE IN CONTROL AGREEMENT 

 Dear Arne:

 Harleysville Group Inc. (“Employer”) considers the establishment and maintenance of a sound and vital management
team essential to protecting and enhancing the best interests of it and its stockholders and those of its parent company, Harleysville Mutual Insurance Company (“Parent”) and the Parent’s policyholders. In this connection, the
Employer recognizes that, as is the case with many publicly held corporations, the possibility of a change in control of the Employer exists and that such possibility and the uncertainty and questions which it may raise among management personnel as
to the effect of such change in control on the Employer, may result in the departure or distraction of such personnel to the detriment of the Employer, the Parent, the Employer’s stockholders and the Parent’s policyholders. Accordingly,
the Board of Directors of the Employer (“Board”) has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the key members of the Employer’s management, including
yourself, to their assigned duties without the distraction arising from the possibility of a change in control. 
 In order to
induce you to remain in the Employer’s employ, this letter agreement (“Agreement”) supersedes and replaces any prior similar agreement, and sets forth the severance benefits which the Employer agrees will be provided to you in the
event your employment is terminated subsequent to a “Change in Control” (as defined in Section 2) and under the circumstances described below. 
 1. Term. This Agreement shall commence on July 11, 2011 and shall continue in effect through December 31, 2012 (the “Initial Expiration Date”); provided, however, that
commencing on January 1, 2013, and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year (each, an “Extended Expiration Date”) unless, not later than twelve (12) months
prior to the Initial Expiration Date or any Extended Expiration Date, as the case may be, the Employer shall have given notice that it does not wish to extend this Agreement; provided, further, if a Change in Control of the Employer shall have
occurred during the original or extended term of this Agreement, this Agreement shall continue in effect for a period of twenty-four (24) months beyond the month in which such Change in Control occurred. 

 Change in Control Agreement 

 

 2. Change in Control. 
 For purposes of this Agreement, “Change in Control” of the Employer shall be deemed to have occurred: 
 (a) if the “beneficial ownership” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of securities representing more than twenty percent (20%) of the combined voting power
of the Employer Voting Securities (as herein defined) is acquired by any individual, entity or group (a “Person”), other than the Parent, the Employer, any trustee or other fiduciary holding securities under any employee benefit plan of
the Employer or an affiliate thereof, or any corporation owned, directly or indirectly, by the stockholders of the Employer in substantially the same proportions as their ownership of stock of the Employer (for purposes of this Agreement,
“Employer Voting Securities” shall mean the then outstanding voting securities of the Employer entitled to vote generally in the election of directors); provided, however, that the following shall not constitute a Change in Control
under this paragraph (a) : (i) any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this Section 2; (ii) any acquisition of the Employer Voting Securities
from the Parent pursuant to a Business Combination (as herein defined) or otherwise, if (x) the acquiring or resulting entity is organized in the mutual form, and (y) persons who were members of the Incumbent Board (as herein defined) of
the Parent immediately prior to such acquisition constitute at least two-thirds of the members of the Board of Directors of the acquiring entity immediately following such acquisition and (iii) any acquisition of voting securities from the
Employer or the Parent by a person engaged in business as an underwriter of securities who acquires the shares through his participation in good faith in a firm commitment underwriting registered under the Securities Act of 1933; and (iv) any
acquisition otherwise within the terms of this paragraph (a) during any period in which Parent owns at least a majority of the combined voting power of Employer Voting Securities (the “Parent Control Period”), but if such an
acquisition is made during a Parent Control Period by any Person and such Person continues to hold more than 20% of the combined voting power of all Employer Voting Securities on the first day following the termination of a Parent Control Period,
such acquisition will be deemed to have been first made on such date; or 
 (b) if, during any period of twenty-four
(24) consecutive months, individuals who, as of the beginning of such period, constitute the Board of Directors of the Employer or the Parent, as the case may be (the “Applicable Incumbent Board”), cease for any reason to constitute
at least a majority of the Board of Directors of the Employer or the Parent, as the case may be; provided, however, that (x) any individual becoming a director of the Employer or the Parent, as the case may be, during such period whose
election, or nomination for election, was approved by a vote of at least a two-thirds of the directors then comprising the Applicable Incumbent Board (other than in connection with the settlement of a threatened proxy contest) shall be considered as
though such individual were a member of the Incumbent Board of Directors of the Employer or the Parent, as the case may be, and (y) the provisions of this paragraph (b) shall not be applicable to the composition of the Board of Directors
of Parent if Parent shall cease to own at least 20% of the combined voting power of all Employer Voting Securities; or 
 (c)
upon consummation by the Employer of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Employer or the acquisition of assets or stock of another entity (a “Business
Combination”), unless, in any such 

 Change in Control Agreement 

 

 
case, immediately following such Business Combination the following three conditions are met: (i) more than 50% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of (x) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (y) if applicable, a corporation which as a result of such transaction owns
the Employer or all or substantially all of the Employer’s assets either directly or through one or more subsidiaries (the “New Parent Corporation”), is represented, in either such case, directly or indirectly, by Employer Voting
Securities outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Employer Voting Securities were converted pursuant to such Business Combination), and such voting power is distributed
among the holders thereof in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Employer Voting Securities, and (ii) no Person (excluding any employee benefit plan (or related trust) of
the Employer or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the New Parent
Corporation (or, if there is no New Parent Corporation, the Surviving Corporation) except to the extent that such ownership of the Employer existed prior to the Business Combination, and (iii) at least a majority of the members of the board of
directors of the New Parent Corporation (or, if there is no New Parent Corporation, the Surviving Corporation) were members of the Board of Directors of the Employer at the time of the execution of the initial agreement, or the action of the Board,
providing for such Business Combination; or 
 (d) Parent affiliates with, or acquires by merger, a third party and, as a
consequence thereof, persons who were members of the Incumbent Board of Parent immediately prior to such transaction cease to constitute at least two-thirds of the directors of Parent following such transaction provided, however, that this
paragraph (d) shall not apply if immediately prior to such affiliation or merger, Parent does not own more than 20% of the combined voting power of Employer Voting Securities; or 

(e) upon approval by the stockholders of the Employer and all necessary regulatory authorities of a complete liquidation or dissolution
of the Employer; or 
 (f) any other event shall occur that would be required to be reported by the Employer in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act (or any provision successor thereto); or 

(g) the Employer or Parent has entered into a management agreement or similar arrangement pursuant to which an entity other than the
Employer or the Parent or the Boards of Directors or the executive officers and management of the Employer or the Parent has the power to direct or cause the direction of the management and policies of the Employer or the Parent; provided,
however, that this paragraph (g) shall not apply to Parent if, immediately prior to entering into any such management agreement or similar arrangement, Parent does not own more than 20% of Employer Voting Securities. 

 Change in Control Agreement 

 

 3. Termination Following Change in Control. If any of the events described in
Section 2 hereof constituting a Change in Control shall occur during the term hereof, you shall be entitled to the benefits provided in Section 4 hereof upon the subsequent termination of your employment within twenty-four months following
such Change in Control unless such termination is (a) because of your death or Retirement, (b) by the Employer for Cause, or (c) by you other than for Good Reason, in accordance with the following: 

 

	 	(a)	Disability; Retirement. 

  

	 	(i)	If, as a result of your incapacity due to physical or mental illness, you shall have been absent from your duties with the Employer on a full time basis for six
(6) consecutive months and within 30 days after written notice of termination is given you shall not have returned to the full time performance of your duties, the Employer may terminate this Agreement for “Disability.”

  

	 	(ii)	Termination of your employment based on “Retirement” shall mean termination in accordance with the Employer’s retirement policy, including early
retirement, generally applicable to its salaried employees or in accordance with any retirement arrangement established with your consent with respect to you. 

 

	 	(b)	Cause. The Employer may terminate your employment for Cause. Termination by the Employer of your employment for “Cause” shall mean termination upon
(A) the willful and continued failure by you to substantially perform your duties with the Employer (other than any such failure resulting from your incapacity due to physical or mental illness), or any such actual or anticipated failure after
the issuance of a Notice of Termination by you for Good Reason, as such terms are defined in Subsections 3(d) and 3(c), respectively, after a written demand specifically identifies the manner in which the Board believes that you have not
substantially performed your duties, or (B) the willful engaging by you in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of this paragraph, no act or failure to act on your part
shall be considered “willful” unless done or omitted to be done by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Employer. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board of a meeting of the
Board called and held for the purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, you were guilty of conduct set forth
above and specifying the particulars thereof in detail. 

  

	 	(c)	Good Reason. You may terminate your employment for Good Reason. For purposes of this Agreement, “Good Reason” shall mean, within twenty four
(24) months following any Change in Control and without your express written consent: 

  

	 	(i)	the assignment to you of any duties inconsistent with your positions, duties, responsibilities and status with the Employer immediately prior to a Change in Control or
a change in your reporting responsibilities, titles or offices as in effect immediately prior to a Change in Control, or any removal of you from or any failure to re-elect you to any of such positions, except in connection with the termination of
your employment for Cause, Disability, Retirement or by you other than for Good Reason or as a result of your death; 

 Change in Control Agreement 

 

	 	(ii)	a reduction in your base salary under the Employer’s Wage and Salary Program in effect immediately prior to a Change in Control or as the same may be increased
from time to time thereafter; 

  

	 	(iii)	a failure by the Employer (A) to continue its executive incentive plans, as the same may be amended or modified from time to time but substantially in the form in
effect immediately prior to a Change in Control (“Program”), or failure by the Employer to continue you as a participant in the Program on at least the basis in effect immediately preceding a Change in Control, provided that the failure to
continue any one or more plans constituting the Program, or to continue you in any one or more plans shall not constitute Good Reason as long as, after giving effect to any such changes, the aggregate of the compensation which may be earned by you
and the circumstances under which such amounts may be earned are substantially comparable, taken as a whole, as the Program, or (B) to pay you any installment of a previous award or of deferred compensation, if any, under the Program or any
deferred compensation program in which you participated immediately prior to a Change in Control; 

  

	 	(iv)	the Employer requiring you to be based anywhere other than within fifty (50) miles of the office in Harleysville, Pennsylvania, except for required travel on
business to an extent substantially consistent with the business travel obligations you experienced immediately preceding a Change in Control; 

  

	 	(v)	 the failure by the Employer to continue in effect any benefit or compensation plan or arrangement, in which you are participating immediately preceding
Change in Control, the taking of any action by the Employer not required by law which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by
you at the time of the Change in Control or the failure by the Employer to provide you with the number of paid vacation days, holidays and personal days to which you are then entitled in accordance with the Employer’s normal leave policy in
effect immediately preceding a Change in Control; provided, however, that the failure to continue any plan or benefit or the taking of any 

 Change in Control Agreement 

 

	 	
action which adversely affects your participation in, or materially reduces your benefits under any plan or deprives you of any material fringe benefit shall not be Good Reason under this
Section 3(c)(v) if the failure to continue or other action applies equally to all employees or executives covered by the plan or benefit. 

  

	 	(vi)	the failure of the Employer to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Section 5 hereof; or

  

	 	(vii)	any purported termination of your employment by the Employer which is not effected pursuant to a Notice of Termination satisfying the requirements of subparagraph
(d) below (and, if applicable, subparagraph (b) above). Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder. 

 

	 	(d)	Notice of Termination. Any termination by the Employer pursuant to subparagraphs (a) or (b), above, or by you pursuant to subparagraph (c), above, shall be
communicated by a written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon
and shall set forth, in reasonable detail, the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. 

 

	 	(e)	 Date of Termination. “Date of Termination” shall mean (A) if this Agreement is terminated for Disability, 30 days after Notice of
Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such 30-day period), (B) if your employment is terminated pursuant to subparagraph (c), above, the date specified in
the Notice of Termination and (C) if your employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that, if within 30 days after any Notice of Termination is given, the party receiving such
Notice of Termination gives notice to the other party, other than in Bad Faith, that a dispute exists concerning the termination and the party giving such Notice shall pursue his claim diligently and in other than Bad Faith, the Date of Termination
shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected). As used in this Agreement, “Bad Faith” shall mean that a dispute was asserted or maintained by you (i) for an improper purpose, such as to harass or cause unnecessary
delay or needlessly increase the cost of resolution, or (ii) on a basis not warranted by existing law or a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law, or (iii) in the
absence of evidentiary support (unless evidentiary support was reasonably likely to exist after 

 Change in Control Agreement 

 

	 	
investigation or discovery). Bad Faith shall only be determined to exist for purposes of this Agreement if the arbitrator selected pursuant to Section 10 hereof makes a specific finding
thereof in his award. 

 4. Compensation Upon Termination Or During Disability Following A Change In
Control. 
  

	 	(a)	During any period following a Change in Control that you fail to perform your duties hereunder as a result of incapacity due to physical or mental illness, you shall
continue to receive your full base salary at the rate then in effect and any installments of deferred portions of awards under the Program paid during such period until your employment is terminated pursuant to paragraph 3(a) hereof. Thereafter,
your benefits shall be determined in accordance with the Employer’s Long-Term Disability Plan, or any substitute plan then in effect. 

  

	 	(b)	If, following a Change in Control, you terminate your employment other than for Good Reason or your employment shall be terminated for Cause, the Employer shall pay you
your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan, the annual incentive plan, long-term incentive plan,
or stock option plan of the Employer at the time such payments are due and the Employer shall have no further obligation to you. 

  

	 	(c)	If, following a Change in Control, the Employer shall terminate your employment other than pursuant to paragraph (a) or (b) hereof or if you shall terminate
your employment for Good Reason, then the Employer shall pay to you as severance pay in a lump sum at the time specified in Section 4(f), the following amounts: 

 

	 	(i)	your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and an amount equal to the amount, if any, of the
deferred portion of any awards which have been awarded to you pursuant to the Program but which have not yet been paid to you and the amount of Deferred Compensation, if any, under the Program which has accrued to your account; and

  

	 	(ii)	in lieu of any further salary payments to you for periods subsequent to the Date of Termination, an amount equal to the product of (a) the higher of your annual
base salary in effect as of (i) the date of the Change in Control, and (ii) the Date of Termination, plus the average target awards under any annual incentive plan for the last three years, multiplied by (b) the number 2.000;
and 

  

	 	(iii)	 in lieu of payments of any type under any long-term incentive plan, and to the extent not covered by any other subsection of this

 Change in Control Agreement 

 

	 	
Section 4(c), a cash amount equal to the sum of the target bonuses, pro-rated on a month-completed basis, for all long-term incentive plan periods in which you are currently participating
plus any incentive compensation which has been allocated or awarded to you for a fiscal year or other measuring period preceding the Date of Termination but has not yet been paid. If all or part of a target award is comprised of shares of
Employer’s stock, the amount paid in cash shall be equal to the fair market value of the stock at the beginning of the plan period; and 

  

	 	(iv)	 in the event that any payments made to you under this Agreement or otherwise (the “Payments”) for a termination event occurring under this
Agreement that arises on or prior to December 31, 2014 are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Excise Tax”), then the Employer shall pay you an additional amount (“Gross
Up”) such that the net amount retained by you after deduction of any Excise Tax on the Payments and any Federal, State and local income taxes and Excise Tax upon the payments provided for by this Section 4(c)(iv) shall be equal to the
total value of the Payments at the time such payments are to be made. For the avoidance of doubt, (1) this Section 4(c)(iv) shall not provide you any additional amounts in respect of Federal, State, and local income taxes payable by you on
amounts payable to you under any other section of this Agreement; and (2) this Section 4(c)(iv) shall not apply to any Payments made for any termination event arising under this Agreement with a Date of Termination after December 31,
2014. For purposes of determining the amount of the Gross Up, you shall be deemed to pay Federal, State and local income taxes at the highest marginal rate of taxation in the calendar year in which the Payment is to be made. State and local income
taxes shall be determined based upon the state and locality of your domicile on the Date of Termination. The determination of whether such Excise Tax is payable, the amount thereof, and the Gross Up shall be based upon the opinion of tax counsel
selected by the Employer and acceptable to you. If such opinion is not finally accepted by the IRS upon audit, then appropriate adjustments shall be computed (without interest but with Gross Up, if applicable) by such tax counsel based upon the
final amount of the Excise Tax so determined. The amount shall be paid by the appropriate party in one lump cash sum within 30 days of such computation. Notwithstanding anything to the contrary in this Section 4(c)(iv), if the Payments would be
subject to excise tax pursuant to Section 4999 of the Internal Revenue Code (the “Code”) (or any similar federal or state excise tax), but would not be so subject if the total of such Payments would be reduced by 10% or less, then
such Payments shall be reduced by the minimum amount necessary so as not to cause the Employer to have paid an Excess Parachute Payment as 

 Change in Control Agreement 

 

	 	
defined in Section 280G(b)(1) of the Code and so you will not be subject to Excise Tax pursuant to Section 4999 of the Code. The calculation of any potential reduction pursuant to this
paragraph or any disputes related thereto shall be made as described above with respect to the calculation of the Gross Up. In the event that the amount of any Payments that would be payable to or for your benefit under this Agreement must be
modified or reduced to comply with this provision, you shall direct which Payments are to be modified or reduced; provided, however, that no change in the amount of any Payment or change in the timing of the Payment shall be made without the consent
of the Employer. In no event shall the total Payments be reduced by more than 10% in order to avoid treatment as an Excess Parachute Payment. In no event shall any Gross Up under this provision be paid to you later than the end of the year following
the year in which you pay the Excise Tax; and 

  

	 	(v)	the Employer shall pay all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting
or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to
any payment or benefit hereunder). Reimbursement of such legal fees and expenses shall be made on a regular and periodic basis by the Employer upon your presentation to the Employer of a statement of such fees and expenses prepared by your counsel
under standard and customary methods; provided, however, that any such payments shall be made by the end of the year following the year in which such fees and expenses incurred; and 

 

	 	(vi)	the Employer shall maintain in full force and effect, for your continued benefit for twenty-four (24) months after the Date of Termination, all employee health and
welfare benefit plans, programs or arrangements in which you were entitled to participate immediately prior to the Date of Termination, including, without limitation, medical and dental, life, disability, accident and death insurance plans, provided
your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is barred, the Employer shall arrange to provide you with benefits
substantially similar to those which you would have been entitled to receive under such plans and programs. Except for any insurance policy used by the Employer to fund any Rabbi Trust, at the end of the period of coverage, you shall have the option
to have assigned to you at no cost and with no apportionment of prepaid premiums, any assignable insurance policy owned by the Employer immediately preceding the Change in Control; and 

 Change in Control Agreement 

 

	 	(d)	You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of
any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you or benefits including retirement benefits provided to you as the result of employment by another employer after the Date of Termination or
otherwise. 

  

	 	(e)	In addition to all other amounts payable to you under Section 4, and to the extent not payable by reason of the other provisions hereof, you shall be entitled to
receive all benefits which have accrued through the Date of Termination and are payable to you under the Harleysville Retirement Savings Plus Plan, the Supplemental Retirement Plan, the Pension Plan, the Non-Qualified Deferred Compensation Plan, and
any other plan or agreement relating to retirement benefits. 

  

	 	(f)	Any payments due under Sections 4(c)(i)-(iii) of this Agreement shall be paid on the thirtieth day following the Date of Termination. Notwithstanding the
foregoing, no payments shall be made under Sections 4(c)(i)-(iii) until the first business day of the seventh calendar month following the month in which the Date of Termination occurs (except that any base salary accrued and unpaid as of the
Date of Termination shall be paid in accordance with the Employer’s standard payroll practice). 

 5.
Successors’ Binding Agreement. 
  

	 	(a)	The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Employer, by agreement in form and substance reasonably satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such
succession had taken place. The Employer will also obtain agreement from such successor that it will not exercise its non-renewal option at any time within one year from the date of the Change in Control. Failure of the Employer to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Employer in the same amount and on the same terms as you would be entitled hereunder if you terminated
your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in the Agreement, “Employer” shall mean the
Employer as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 5 or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law. 

 Change in Control Agreement 

 

	 	(b)	This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amounts would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your
devisee, legatee, or other designee or, if there be no such designee, to your estate. 

 6. Notice. For the
purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Employer shall be directed to the attention of the Corporate Secretary or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 
 7. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as
may be authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provision or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are
not set forth expressly in the Agreement. It is intended that the benefits payable hereunder shall be considered paid to you for your past services to the Employer and continuing services from the date hereof. Any payment provided for hereunder
shall be paid net of any applicable withholding required under Federal, State and local law. No termination of this Agreement shall terminate the Employer’s obligation to complete the payments of all amounts and benefits to which you became
entitled, by operation of the provisions hereof, prior to expiration hereof. This is not an employment agreement; you remain an employee at will; in the event your employment is terminated prior to a Change in Control for any reason or no reason, no
amounts are payable to you by reason of this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the substantive law of the Commonwealth of Pennsylvania. 

8. Validity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity of
enforceability of any other provisions of this Agreement, which shall remain in full force and effect. 
 9.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 

10. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by
arbitration before a single arbitrator in the Commonwealth of Pennsylvania in accordance with the Commercial Rules of the American Arbitration Association then in effect. Notwithstanding the pendancy of any such dispute or controversy, the Employer
will continue to pay your full compensation in effect when the notice 

 Change in Control Agreement 

 

 
giving rise to the dispute was given (including, but not limited to, base salary and installments under the Program) and, to the extent permitted by law, continue you as a participant in all
compensation, benefits and insurance plans in which you were participating when the notice giving rise to the dispute was given, until the dispute is finally resolved in accordance with paragraph 3(e) hereof. Amounts paid under the previous sentence
shall be offset against, and shall reduce, any other amounts due under this Agreement. If the Employer is successful in the arbitration and the arbitrator makes a specific finding that the controversy was commenced or maintained in Bad Faith, then
all amounts paid to you pursuant to Section 4(c)(vi) and the second sentence of this Section 10 shall be repaid by you to the Employer within thirty (30) days of the award. Judgment may be entered on the arbitrator’s award in any
court having jurisdiction; provided, however, that you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during pendancy of any dispute or controversy arising under or in connection with this
Agreement. 
  

			
	Very truly yours,
	
	HARLEYSVILLE GROUP, INC.
		
	By	 	 /s/ Michael L. Browne

		 	Michael L. Browne
		 	Chief Executive Officer

  

	
	 /s/ Arnold F. Herenstein

	EMPLOYEE’S SIGNATURE

 AGREED TO THIS 11th DAY 
 OF JULY, 2011Invensense, Inc. 2004 Stock Incentive Plan, as amended

 Exhibit 10.1 
 INVENSENSE, INC. 
 2004 STOCK INCENTIVE PLAN 

AS AMENDED AUGUST 31, 2011 
 1.        Purposes of the Plan.  The purposes of this Plan are to attract and retain the best available personnel, to provide additional incentives
to Employees, Directors and Consultants and to promote the success of the Company’s business. 

2.        Definitions.  The following definitions shall apply as used herein and
in the individual Award Agreements except as defined otherwise in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supercede the definition contained in this
Section 2. 
   (a)        “Administrator” means the
Board or any of the Committees appointed to administer the Plan. 

  (b)        “Applicable Laws” means the legal requirements relating
to the Plan and the Awards under applicable provisions of federal and state securities laws, the corporate laws of California and, to the extent other than California, the corporate law of the state of the Company’s incorporation, the Code, the
rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein. 
   (c)        “Assumed” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company or
(ii) the contractual obligations represented by the Award are expressly assumed (and not simply by operation of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number
and type of securities of the successor entity or its Parent subject to the Award and the exercise or purchase price thereof which at least preserves the compensation element of the Award existing at the time of the Corporate Transaction as
determined in accordance with the instruments evidencing the agreement to assume the Award. 

  (d)        “Award” means the grant of an Option, Restricted Stock,
or other right or benefit under the Plan. 
   (e)        “Award
Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any amendments thereto. 
   (f)        “Board” means the Board of Directors of the Company. 

  (g)       “Cause” means, with respect to the termination by the Company
or a Related Entity of the Grantee’s Continuous Service, that such termination is for “Cause” as such term (or word of like import) is expressly defined in a then-effective written agreement between the Grantee and the Company or such
Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee’s: (i) performance of any act or failure to perform any act in bad faith and to
the 

  
 1 

 
detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or (iii) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to any person; provided, however, that with regard to any agreement that defines “Cause” on the occurrence of or in connection with a Corporate Transaction or a
Change in Control, such definition of “Cause” shall not apply until a Corporate Transaction or a Change in Control actually occurs. 
   (h)        “Code” means the Internal Revenue Code of 1986, as amended. 

  (i)         “Committee” means any committee composed of
members of the Board appointed by the Board to administer the Plan. 

  (j)         “Common Stock” means the voting common stock of
the Company. 
   (k)        “Company” means InvenSense,
Inc., a California corporation, or any successor corporation that adopts the Plan in connection with a Corporate Transaction. 

  (l)         “Consultant” means any person (other than an
Employee or a Director, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity.

   (m)       “Continuous Service” means that the provision of
services to the Company or a Related Entity in any capacity of Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or Consultant,
Continuous Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an Employee, Director or
Consultant can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which the Grantee provides services ceasing to
be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or
Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other authorized personal leave. For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds ninety (90) days, and reemployment upon expiration of
such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of such ninety (90) day period.

  

 2 

   (n)        “Corporate
Transaction” means any of the following transactions, provided, however, that the Administrator shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding and
conclusive: 
       (i)        a merger or consolidation
in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated; 
       (ii)       the sale, transfer or other disposition of all or substantially all of the assets of the Company; 

      (iii)      the complete liquidation or dissolution of the Company;

       (iv)      any reverse merger or series of related
transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such
merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction
or series of related transactions that the Administrator determines shall not be a Corporate Transaction; or 

      (v)       acquisition in a single or series of related
transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction.

   (o)        “Covered Employee” means an Employee who is
a “covered employee” under Section 162(m)(3) of the Code. 

  (p)        “Director” means a member of the Board or the board of
directors of any Related Entity. 

  (q)        “Disability” means as defined under the long-term
disability policy of the Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee is covered by such policy. If the Company or the Related Entity to which the Grantee provides service does not have a
long-term disability plan in place, “Disability” means that a Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determinable physical or mental impairment for a
period of not less than ninety (90) consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion. 

 

 3 

   (r)        “Employee”
means any person, including an Officer or Director, who is in the employ of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of
performance. The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company. 
   (s)        “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

  (t)        “Fair Market Value” means, as of any date, the value of
Common Stock determined as follows: 

      (i)        If the Common Stock is listed on one or more
established stock exchanges or national market systems, including without limitation The NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ Capital Market of The NASDAQ Stock Market LLC, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

       (ii)       If the Common Stock is regularly quoted on
an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities dealer on the date of
determination, but if selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were
reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
       (iii)      In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market
Value thereof shall be determined by the Administrator in good faith and in a manner consistent with Applicable Laws. 

  (u)        “Grantee” means an Employee, Director or Consultant who
receives an Award under the Plan. 
   (v)        “Immediate
Family” means any 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, including adoptive
relationships, any person sharing the Grantee’s household (other than a tenant or employee), a trust in which these persons (or the Grantee) have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons
(or the Grantee) control the management of assets, and any other entity in which these persons (or the Grantee) own more than fifty percent (50%) of the voting interests. 

  (w)        “Incentive Stock Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the Code. 
  

 4 

   (x)        “Non-Qualified Stock
Option” means an Option not intended to qualify as an Incentive Stock Option. 

  (y)        “Officer” means a person who is an officer of the
Company or a Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
   (z)        “Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan. 

  (aa)      “Parent” means a “parent corporation”, whether now or
hereafter existing, as defined in Section 424(e) of the Code. 

  (bb)      “Performance-Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code. 

  (cc)      “Plan” means this 2004 Stock Incentive Plan. 

  (dd)      “Post-Termination Exercise Period” means the period specified in
the Award Agreement of not less than thirty (30) days commencing on the date of termination (other than termination by the Company or any Related Entity for Cause) of the Grantee’s Continuous Service, or such longer period as may be
applicable upon death or Disability. 
   (ee)      “Registration
Date” means the first to occur of (i) the closing of the first sale to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended, of (A) the Common Stock or (B) the same class of securities of a successor corporation (or its Parent) issued pursuant to a Corporate Transaction in exchange for or in substitution of the Common Stock; and (ii) in
the event of a Corporate Transaction, the date of the consummation of the Corporate Transaction if the same class of securities of the successor corporation (or its Parent) issuable in such Corporate Transaction shall have been sold to the general
public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, on or prior to the date of consummation of such Corporate Transaction. 

  (ff)       “Related Entity” means any Parent or Subsidiary of the
Company and any business, corporation, partnership, limited liability company or other entity in which the Company or a Parent or a Subsidiary of the Company holds a substantial ownership interest, directly or indirectly. 

  (gg)      “Replaced” means that pursuant to a Corporate Transaction the
Award is replaced with a comparable stock award or a cash incentive program of the Company, the successor entity (if applicable) or Parent of either of them which preserves the compensation element of such Award existing at the time of the Corporate
Transaction and provides for subsequent payout in accordance with the same (or a more favorable) vesting schedule applicable to such Award. The determination of Award comparability shall be made by the Administrator and its determination shall be
final, binding and conclusive. 
  

 5 

   (hh)      “Restricted Stock”
means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by
the Administrator. 
   (ii)        “Rule 16b-3” means
Rule 16b-3 promulgated under the Exchange Act or any successor thereto. 

  (jj)        “Share” means a share of the Common Stock. 

  (kk)      “Subsidiary” means a “subsidiary corporation”, whether
now or hereafter existing, as defined in Section 424(f) of the Code. 

3.        Stock Subject to the Plan. 

  (a)        Subject to the provisions of Section 10 below, the maximum aggregate
number of Shares which may be issued pursuant to all Awards (including Incentive Stock Options) is 17,680,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. 

  (b)        Any Shares covered by an Award (or portion of an Award) which is
forfeited, canceled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually have been
issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited or repurchased by the Company, such Shares shall become
available for future grant under the Plan. To the extent the listing requirements of The NASDAQ Stock Market LLC (or other established stock exchange or national market system on which the Common Stock is traded) and Applicable Law, any Shares
covered by an Award which are surrendered (i) in payment of the Award exercise or purchase price or (ii) in satisfaction of tax withholding obligations incident to the exercise of an Award shall be deemed not to have been issued for
purposes of determining the maximum number of Shares which may be issued pursuant to all Awards under the Plan, unless otherwise determined by the Administrator. 
 4.        Administration of the Plan. 
   (a)        Plan Administrator. 
       (i)        Administration with Respect to Directors and Officers.  Prior to the Registration Date, with respect
to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a
manner as to satisfy the Applicable Laws. On or after the Registration Date, with respect to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or
(B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the
Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. 

  
 6 

      (ii)        Administration With Respect to Consultants and
Other Employees.  With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board,
which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. 

      (iii)        Administration With Respect to Covered
Employees.  Notwithstanding the foregoing, as of and after the date that the exemption for the Plan under Section 162(m) of the Code expires, as set forth in Section 19 below, grants of Awards to any Covered Employee intended
to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based
Compensation. In the case of such Awards granted to Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee. 

  (b)        Multiple Administrative Bodies.  The Plan may be
administered by different bodies with respect to Directors, Officers, Consultants, and Employees who are neither Directors nor Officers. 
   (c)        Powers of the Administrator.  Subject to Applicable Laws and the provisions of the Plan (including any other powers given to
the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion: 
       (i)        to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

       (ii)       to determine whether and to what extent
Awards are granted hereunder; 
       (iii)      to determine the
number of Shares or the amount of other consideration to be covered by each Award granted hereunder; 

      (iv)      to approve forms of Award Agreements for use under the Plan;

       (v)       to determine the terms and conditions of
any Award granted hereunder; 
       (vi)      to establish
additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non-U.S. jurisdictions and to afford Grantees favorable treatment under such rules or laws; provided, however, that no Award shall be granted under any
such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan; 
  

 7 

       (vii)     to amend the terms
of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent, provided, however, that an
amendment or modification that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be treated as adversely affecting the rights of the Grantee. Notwithstanding the foregoing, (A) the reduction or increase of the
exercise price of any Option awarded under the Plan and (B) canceling an Option at a time when its exercise price or base appreciation amount (as applicable) exceeds the Fair Market Value of the underlying Shares, in exchange for another Option
or other Award, in each case, shall not be subject to shareholder approval; 

      (viii)    to construe and interpret the terms of the Plan and Awards, including
without limitation, any notice of award or Award Agreement, granted pursuant to the Plan; and 

      (ix)      to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate. 

  (d)        Indemnification.  In addition to such other rights of
indemnification as they may have as members of the Board or as Officers or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom authority to act for the Board,
the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in
connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with
the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit
or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that
within thirty (30) days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the same. 

5.        Eligibility.  Awards other than Incentive Stock Options may be granted
to Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant who has been granted an Award may, if otherwise
eligible, be granted additional Awards. Awards may be granted to such Employees, Directors or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time. 

6.        Terms and Conditions of Awards. 

  (a)        Designation of Award.  Each Award shall be designated in
the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock 
  

 8 

 
Option or a Non-Qualified Stock Option. However, notwithstanding such designation, an Option will qualify as an Incentive Stock Option under the Code only to the extent the $100,000 dollar
limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d) to the Code is calculated based on the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be taken into account in the
order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the grant date of the relevant Option. In the event that the Code or the regulations promulgated thereunder are amended after the Plan becomes
effective to provide for a different limit on the Fair Market Value of Shares permitted to be subject to Incentive Stock Options, then such different limit will be automatically incorporated herein and will apply to any Options granted after the
effective date of such amendment. 
   (b)        Conditions of
Award.  Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal,
forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based
on any one of, or combination of, increase in share price, earnings per share, total shareholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement. In addition,
the performance criteria shall be calculated in accordance with generally accepted accounting principles, but excluding the effect (whether positive or negative) of any change in accounting standards and any extraordinary, unusual or nonrecurring
item, as determined by the Administrator, occurring after the establishment of the performance criteria applicable to the Award intended to be performance-based compensation. Each such adjustment, if any, shall be made solely for the purpose of
providing a consistent basis from period to period for the calculation of performance criteria in order to prevent the dilution or enlargement of the Grantee’s rights with respect to an Award intended to be performance-based compensation.

   (c)        Acquisitions and Other Transactions.  The
Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another
entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction. 
   (d)        Deferral of Award Payment.  The Administrator may establish one or more programs under the Plan to permit selected Grantees
the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration
under an Award. The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such
other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program. 
  

 9 

   (e)        Separate
Programs.  The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the
Administrator from time to time.  
   (f)        Individual Option
Limit.  Following the date that the exemption from application of Section 162(m) of the Code described in Section 19 (or any exemption having similar effect) ceases to apply to Awards, the maximum number of Shares with
respect to which Options may be granted to any Grantee in any fiscal year of the Company shall be 750,000 Shares. In connection with a Grantee’s commencement of Continuous Service, a Grantee may be granted Options for up to an additional
750,000 Shares which shall not count against the limit set forth in the previous sentence. The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10,
below. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if any Option is canceled, the canceled Option shall continue to count against the
maximum number of Shares with respect to which Options may be granted to the Grantee. For this purpose, the repricing of an Option shall be treated as the cancellation of the existing Option and the grant of a new Option. 

  (g)        Early Exercise.  The Award Agreement may, but need not,
include a provision whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be
subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate. 
   (h)        Term of Award.  The term of each Award shall be the term stated in the Award Agreement, provided, however, that the term
shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the
Award Agreement. Notwithstanding the foregoing, the specified term of any Award shall not include any period for which the Grantee has elected to defer the receipt of the Shares or cash issuable pursuant to the Award. 

  (i)        Transferability of Awards.  Non-Qualified Stock Options
shall be transferable (i) by will and by the laws of descent and distribution and (ii) during the lifetime of the Grantee, to the extent and in the manner authorized by the Administrator by gift or pursuant to a domestic relations order to
members of the Grantee’s Immediate Family. Incentive Stock Options and other Awards may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may
be exercised, during the lifetime of the Grantee, only by the Grantee. Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s Incentive Stock Option or Non-Qualified Stock Option in the event of the
Grantee’s death on a beneficiary designation form provided by the Administrator. 
  

 10 

   (j)        Time of Granting
Awards.  The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such other date as is determined by the Administrator. 

7.        Award Exercise or Purchase Price, Consideration and Taxes. 

  (a)        Exercise or Purchase Price.  The exercise or purchase
price, if any, for an Award shall be as follows: 

      (i)        In the case of an Incentive Stock Option:

        (A)        granted to an Employee who, at
the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price shall
be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or 

       (B)        granted to any Employee other than an
Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 

      (ii)       In the case of a Non-Qualified Stock Option, the per
Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant; OR such price as is determined by the Administrator; 

      (iii)      In the case of Awards intended to qualify as
Performance-Based Compensation, the exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 

      (iv)      In the case of the sale of Shares, the per Share purchase
price, if any, shall be such price as is determined by the Administrator; or 

      (v)       In the case of other Awards, such price as is
determined by the Administrator. 
       (vi)      Notwithstanding
the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(c), above, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument
evidencing the agreement to issue such Award. 

  (b)        Consideration.  Subject to Applicable Laws, the
consideration to be paid for the Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of
grant). In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for 

 

 11 

 
Shares issued under the Plan the following, provided that the portion of the consideration equal to the par value of the Shares must be paid in cash or other legal consideration permitted by the
Delaware General Corporation Law: 

      (i)        cash; 

      (ii)       check; 

      (iii)      delivery of Grantee’s promissory note with such
recourse, interest, security, and redemption provisions as the Administrator determines as appropriate (but only to the extent that the acceptance or terms of the promissory note would not violate an Applicable Law); 

      (iv)      if the exercise or purchase occurs on or after the
Registration Date, surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate
exercise price of the Shares as to which said Award shall be exercised, provided, however, that Shares acquired under the Plan or any other equity compensation plan or agreement of the Company must have been held by the Grantee for a period of more
than six (6) months (and not used for another Award exercise by attestation during such period); 

      (v)       with respect to Options, if the exercise occurs on or
after the Registration Date, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all
of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale transaction; 

      (vi)      with respect to Options, payment through a “net
exercise” such that, without the payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option is being exercised, multiplied by (ii) a
fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined by the Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market Value per Share (the number of net Shares to
be received shall be rounded down to the nearest whole number of Shares); or 

      (vii)    any combination of the foregoing methods of payment. 

The Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Award Agreement described in
Section 4(c)(iv), or by other means, grant Awards which do not permit all of the foregoing forms of consideration to be used in payment for the Shares or which otherwise restrict one or more forms of consideration. 

  (c)        Taxes.  No Shares shall be delivered under the Plan to
any Grantee or other person until such Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of any non-U.S., federal, state, or local income and 

 

 12 

 
employment tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares. Upon exercise or vesting of an Award the Company shall withhold or collect
from the Grantee an amount sufficient to satisfy such tax obligations, including, but not limited to, by surrender of the whole number of Shares covered by the Award sufficient to satisfy the minimum applicable tax withholding obligations incident
to the exercise or vesting of an Award (reduced to the lowest whole number of Shares if such number of Shares withheld would result in withholding a fractional Share with any remaining tax withholding settled in cash). 

8.        Exercise of Award. 

  (a)        Procedure for Exercise; Rights as a Shareholder. 

      (i)        Any Award granted hereunder shall be exercisable
at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement. 
       (ii)       An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance
with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been made, including, to the extent selected, use of the broker-dealer sale and remittance
procedure to pay the purchase price as provided in Section 7(b)(v). 

  (b)        Exercise of Award Following Termination of Continuous
Service.  In the event of termination of a Grantee’s Continuous Service for any reason other than Disability or death (but not in the event of a Grantee’s change of status from Employee to Consultant or from Consultant to
Employee), such Grantee may, but only during the Post-Termination Exercise Period (but in no event later than the expiration date of the term of such Award as set forth in the Award Agreement), exercise the portion of the Grantee’s Award that
was vested at the date of such termination or such other portion of the Grantee’s Award as may be determined by the Administrator. The Grantee’s Award Agreement may provide that upon the termination of the Grantee’s Continuous Service
for Cause, the Grantee’s right to exercise the Award shall terminate concurrently with the termination of Grantee’s Continuous Service. In the event of a Grantee’s change of status from Employee to Consultant, an Employee’s
Incentive Stock Option shall convert automatically to a Non-Qualified Stock Option on the day three (3) months and one day following such change of status. To the extent that the Grantee’s Award was unvested at the date of termination, or
if the Grantee does not exercise the vested portion of the Grantee’s Award within the Post-Termination Exercise Period, the Award shall terminate. 
   (c)        Disability of Grantee.  In the event of termination of a Grantee’s Continuous Service as a result of his or her
Disability, such Grantee may, but only within twelve (12) months from the date of such termination (or such longer period as specified in the Award Agreement but in no event later than the expiration date of the term of such Award as set forth
in the Award Agreement), exercise the portion of the Grantee’s Award that was vested at the date of such termination; provided, however, that if such Disability is not a “disability” as such term is defined in Section 22(e)(3) of
the Code, in the case of an Incentive Stock Option such Incentive Stock Option shall automatically convert to a Non-Qualified Stock Option on the day three (3) months and one day following such termination. To the extent that the Grantee’s
Award was unvested at the date of termination, or if Grantee does not exercise the vested portion of the Grantee’s Award within the time specified herein, the Award shall terminate. 
  

 13 

   (d)        Death of
Grantee.  In the event of a termination of the Grantee’s Continuous Service as a result of his or her death, or in the event of the death of the Grantee during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee’s termination of Continuous Service as a result of his or her Disability, the Grantee’s estate or a person who acquired the right to exercise the Award by bequest or inheritance may exercise the
portion of the Grantee’s Award that was vested as of the date of termination, within twelve (12) months from the date of death (or such longer period as specified in the Award Agreement but in no event later than the expiration of the term
of such Award as set forth in the Award Agreement). To the extent that, at the time of death, the Grantee’s Award was unvested, or if the Grantee’s estate or a person who acquired the right to exercise the Award by bequest or inheritance
does not exercise the vested portion of the Grantee’s Award within the time specified herein, the Award shall terminate. 

  (e)        Extension if Exercise Prevented by Law.  Notwithstanding
the foregoing, if the exercise of an Award within the applicable time periods set forth in this Section 8 is prevented by the provisions of Section 9 below, the Award shall remain exercisable until one (1) month after the date the
Grantee is notified by the Company that the Award is exercisable, but in any event no later than the expiration of the term of such Award as set forth in the Award Agreement and only in a manner and to the extent permitted under Code
Section 409A. 
 9.        Conditions Upon Issuance of Shares. 

  (a)        If at any time the Administrator determines that the delivery of Shares
pursuant to the exercise, vesting or any other provision of an Award is or may be unlawful under Applicable Laws, the vesting or right to exercise an Award or to otherwise receive Shares pursuant to the terms of an Award shall be suspended until the
Administrator determines that such delivery is lawful and shall be further subject to the approval of counsel for the Company with respect to such compliance. The Company shall have no obligation to effect any registration or qualification of the
Shares under federal or state laws. 
   (b)        As a condition to the
exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws. 

10.      Adjustments Upon Changes in Capitalization.  Subject to any required action by
the shareholders of the Company and Section 11 hereof, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Awards may be granted to any Grantee in any fiscal year of the Company, as well as any other
terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting 

 

 14 

 
from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in
the number of issued Shares effected without receipt of consideration by the Company, or (iii) as the Administrator may determine in its discretion, any other transaction with respect to Common Stock including a corporate merger, consolidation,
acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however that conversion of any
convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” In the event of any distribution of cash or other assets to shareholders other than a normal cash dividend, the
Administrator shall also make such adjustments as provided in this Section 10 or substitute, exchange or grant Awards to effect such adjustments (collectively “adjustments”). Any such adjustments to outstanding Awards will be effected
in a manner that precludes the enlargement of rights and benefits under such Awards. In connection with the foregoing adjustments, the Administrator may, in its discretion, prohibit the exercise of Awards or other issuance of Shares, cash or other
consideration pursuant to Awards during certain periods of time. Such adjustments shall be made by the Administrator and its determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award. 

11.      Corporate Transactions. 

  (a)        Effect of Corporate Transaction on Awards.  Effective
upon the consummation of a Corporate Transaction, all outstanding Awards under the Plan shall terminate. However, all such Awards shall not terminate to the extent they are Assumed in connection with the Corporate Transaction. 

  (b)        Acceleration of Award Upon Corporate
Transaction.  Except as provided otherwise in an individual Award Agreement, in the event of a Corporate Transaction, for the portion of each Award that is neither Assumed nor Replaced, such portion of the Award shall automatically
become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares at the time represented by such portion of the Award, immediately
prior to the specified effective date of such Corporate Transaction, provided that the Grantee’s Continuous Service has not terminated prior to such date. The portion of the Award that is not Assumed shall terminate under subsection (a) of
this Section 11 to the extent not exercised prior to the consummation of such Corporate Transaction. 

12.      Effective Date and Term of Plan.  The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the shareholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated. Subject to Section 17 below, and Applicable Laws, Awards
may be granted under the Plan upon its becoming effective. 
  

 15 

 13.      Amendment, Suspension or Termination of the
Plan. 
   (a)        The Board may at any time amend, suspend or
terminate the Plan. To the extent necessary to comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required. 

  (b)        No Award may be granted during any suspension of the Plan or after
termination of the Plan. 
   (c)        No suspension or termination of the
Plan (including termination of the Plan under Section 12, above) shall adversely affect any rights under Awards already granted to a Grantee. 
 14.      Reservation of Shares. 

  (a)        The Company, during the term of the Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 

  (b)        The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained. 
 15.      No Effect on
Terms of Employment/Consulting Relationship.  The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the
Company or a Related Entity to terminate the Grantee’s Continuous Service at any time, with or without cause. 

16.      No Effect on Retirement and Other Benefit Plans.  Except as specifically provided
in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect
any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan” or “Welfare
Plan” under the Employee Retirement Income Security Act of 1974, as amended. 

17.      Shareholder Approval.  Continuance of the Plan shall be subject to approval by
the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such shareholder approval shall be obtained in the degree and manner required under Applicable Laws. Any Award exercised before shareholder
approval is obtained shall be rescinded if shareholder approval is not obtained within the time prescribed, and Shares issued on the exercise of any such Award shall not be counted in determining whether shareholder approval is obtained. 

18.      Information to Grantees.  To the extent required by Applicable Law, the Company
shall provide to each Grantee, during the period for which such Grantee has one or more Awards 
  

 16 

 
outstanding, copies of financial statements at least annually. The Company shall not be required to provide such information to persons whose duties in connection with the Company assure them
access to equivalent information. 
 19.      Effect of Section 162(m) of the
Code.  Section 162(m) of the Code does not apply to the Plan prior to the Registration Date or such earlier time that the Company first becomes subject to the reporting obligations of Section 12 of the Exchange Act. Following
the Registration Date or such earlier time that the Company first becomes subject to the reporting obligations of Section 12 of the Exchange Act, the Plan, and all Awards (except Awards of Restricted Stock that vest over time) issued
thereunder, are intended to be exempt from the application of Section 162(m) of the Code, which restricts under certain circumstances the Federal income tax deduction for compensation paid by a public company to named executives in excess of
$1 million per year. The exemption is based on Treasury Regulation Section 1.162-27(f), in the form existing on the effective date of the Plan, with the understanding that such regulation generally exempts from the application of
Section 162(m) of the Code compensation paid pursuant to a plan that existed before a company becomes publicly held. Under such Treasury Regulation, this exemption is available to the Plan for the duration of the period that lasts until the
earliest of (i) the expiration of the Plan, (ii) the material modification of the Plan, (iii) the exhaustion of the maximum number of shares of Common Stock available for Awards under the Plan, as set forth in Section 3(a),
(iv) the first meeting of shareholders at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Company first becomes subject to the reporting obligations of
Section 12 of the Exchange Act, or (v) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder. To the extent that the Administrator determines as of the date of grant of an Award
that (i) the Award is intended to qualify as Performance-Based Compensation and (ii) the exemption described above is no longer available with respect to such Award, such Award shall not be effective until any shareholder approval required
under Section 162(m) of the Code has been obtained. 
 20.      Unfunded
Obligation.  Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be required to segregate any monies from its general funds, or to create any trusts, or establish any
special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments
or the creation or maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and a Grantee, or otherwise create any vested or
beneficial interest in any Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related Entity for any changes in the value of any assets that may be
invested or reinvested by the Company with respect to the Plan. 

21.      Construction.  Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not
intended to be exclusive, unless the context clearly requires otherwise. 
  

 17 

 22.      Nonexclusivity of the Plan.  Neither
the adoption of the Plan by the Board, the submission of the Plan to the shareholders of the Company for approval, nor any provision of the 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 Awards otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 

 

 18 

 INVENSENSE, INC. 2004 STOCK INCENTIVE PLAN 

NOTICE OF STOCK OPTION AWARD 
  

							
		  	Grantee’s Name and Address:	    	  

			
		  		    	  

			
		  		    	  

			
		  		    	

 You (the “Grantee”) have been granted an option to purchase shares of Common
Stock, subject to the terms and conditions of this Notice of Stock Option Award (the “Notice”), the InvenSense, Inc. 2004 Stock Incentive Plan, as amended from time to time (the “Plan”) and the Stock Option Award Agreement (the
“Option Agreement”) attached hereto, as follows. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Notice. 

 

							
		 	  Award Number	    	  

			
		 	  Date of Award	    	  

			
		 	  Vesting Commencement Date	    	  

				
		 	  Exercise Price per Share	    	$	 	  

			
		 	   Total Number of Shares Subject
   to the Option (the “Shares”)
	    	  

				
		 	  Total Exercise Price	    	$	 	  

			
		 	  Type of Option:	    	                  Incentive Stock Option
			
		 		    	                  Non-Qualified Stock Option
			
		 	  Expiration Date:	    	  

			
		 	  Post-Termination Exercise Period:	    	Forty-Five (45) Days

 Vesting
Schedule: 
 Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice, the Plan and
the Option Agreement, the Option may be exercised, in whole or in part, in accordance with the following schedule: 
 25% of the
Shares subject to the Option shall vest twelve (12) months after the Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall vest on each monthly anniversary of the Vesting Commencement Date thereafter. 

During any authorized leave of absence, the vesting of the Option as provided in this schedule shall be suspended after the leave of
absence exceeds a period of ninety (90) days. Vesting of the Option shall resume upon the Grantee’s termination of the leave of absence and return to service to the Company or a Related Entity. The Vesting Schedule of the Option shall be
extended by the length of the suspension. 
  

 1 

 In the event of the Grantee’s change in status from Employee to Consultant or from an
Employee whose customary employment is 20 hours or more per week to an Employee whose customary employment is fewer than 20 hours per week, vesting of the Option shall continue only to the extent determined by the Administrator as of such change in
status consistent with any minimum vesting requirements set forth in the Plan. 
 IN WITNESS WHEREOF, the Company and the
Grantee have executed this Notice and agree that the Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option Agreement. 

 

			
	 InvenSense, Inc.
 a
California corporation

		
	By:	 	
 

			
		
	Title:	 	  

 THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF
THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH OR
WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL. 

The Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and represents that he or she is familiar with the terms
and provisions thereof, and hereby accepts the Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan and the Option Agreement. The Grantee hereby agrees that all questions of interpretation and administration relating to this Notice, the
Plan and the Option Agreement shall be resolved by the Administrator in accordance with Section 18 of the Option Agreement. The Grantee further agrees to the venue selection and waiver of a jury trial in accordance with Section 19 of the
Option Agreement. The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Notice. 
  

									
	Dated:	 	  
	 		 	Signed:	 	  

		 		 		 		 	Grantee

  

 2 

 Award Number:
                     
 INVENSENSE, INC. 2004 STOCK INCENTIVE PLAN 
 STOCK OPTION AWARD
AGREEMENT 
 1.  Grant of Option.  InvenSense, Inc., a California corporation (the
“Company”), hereby grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award (the “Notice”), an option (the “Option”) to purchase the Total Number of Shares of Common Stock subject to the
Option (the “Shares”) set forth in the Notice, at the Exercise Price per Share set forth in the Notice (the “Exercise Price”) subject to the terms and provisions of the Notice, this Stock Option Award Agreement (the “Option
Agreement”) and the Company’s 2004 Stock Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option Agreement. 
 If designated in the Notice as an Incentive Stock Option, the Option is intended
to qualify as an Incentive Stock Option as defined in Section 422 of the Code. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options
which become exercisable for the first time by the Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in
excess of the foregoing limitation, shall be treated as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the date the Option with respect to such Shares is awarded. 
 2.  Exercise of Option.

 (a) Right to Exercise.  The Option shall be exercisable during its term in accordance with the Vesting
Schedule set out in the Notice and with the applicable provisions of the Plan and this Option Agreement. The Option shall be subject to the provisions of Section 11 of the Plan relating to the exercisability or termination of the Option in the
event of a Corporate Transaction. The Grantee shall be subject to reasonable limitations on the number of requested exercises during any monthly or weekly period as determined by the Administrator. In no event shall the Company issue fractional
Shares. 
 (b) Method of Exercise.  The Option shall be exercisable by delivery of an exercise notice (a form
of which is attached as Exhibit A) or by such other procedure as specified from time to time by the Administrator which shall state the election to exercise the Option, the whole number of Shares in respect of which the Option is being exercised,
and such other provisions as may be required by the Administrator. The exercise notice shall be delivered in person, by certified mail, or by such other method (including electronic transmission) as determined from time to time by the Administrator
to the Company accompanied by payment of the Exercise Price. The Option shall be deemed to be exercised upon receipt by the Company of 

 

 1 

 
such notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price
provided in Section 4(d), below. 
 (c) Taxes.  No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of applicable income tax and employment tax withholding obligations, including, without
limitation, such other tax obligations of the Grantee incident to the receipt of Shares or the disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of the Option, the Company or the Grantee’s
employer may offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee) or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding obligations. 

3.  Grantee’s Representations.  The Grantee understands that neither the Option nor the Shares
exercisable pursuant to the Option have been registered under the Securities Act of 1933, as amended or any United States securities laws. In the event the Shares purchasable pursuant to the exercise of the Option have not been registered under the
Securities Act of 1933, as amended, at the time the Option is exercised, the Grantee shall, if requested by the Company, concurrently with the exercise of all or any portion of the Option, deliver to the Company his or her Investment Representation
Statement in the form attached hereto as Exhibit B. 
 4.  Method of Payment.  Payment of the
Exercise Price shall be made by any of the following, or a combination thereof, at the election of the Grantee; provided, however, that such exercise method does not then violate any Applicable Law: 

(a) cash; 

(b) check; 

(c) if the exercise occurs on or after the Registration Date, surrender of Shares or delivery of a properly executed form of attestation
of ownership of Shares as the Administrator may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised, provided, however, that
Shares acquired under the Plan or any other equity compensation plan or agreement of the Company must have been held by the Grantee for a period of more than six (6) months (and not used for another option exercise by attestation during such
period); or 
 (d) if the exercise occurs on or after the Registration Date, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (i) shall provide written instructions to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to
cover the aggregate exercise price payable for the purchased Shares and (ii) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale
transaction. 
  

 2 

 5.  Restrictions on Exercise.  The Option may not be exercised if
the issuance of the Shares subject to the Option upon such exercise would constitute a violation of any Applicable Laws. In addition, the Option may not be exercised until such time as the Plan has been approved by the shareholders of the Company.
If the exercise of the Option within the applicable time periods set forth in Section 6, 7 and 8 of this Option Agreement is prevented by the provisions of this Section 5, the Award shall remain exercisable until one (1) month after
the date the Grantee is notified by the Company that the Option is exercisable, but in any event no later than the Expiration Date set forth in the Notice. 
 6.  Termination or Change of Continuous Service.  In the event the Grantee’s Continuous Service terminates the Grantee may, but only during the Post-Termination Exercise
Period, exercise the portion of the Option that was vested at the date of such termination (the “Termination Date”). The Post-Termination Exercise Period shall commence on the Termination Date. In no event, however, shall the Option be
exercised later than the Expiration Date set forth in the Notice. In the event of the Grantee’s change in status from Employee, Director or Consultant to any other status of Employee, Director or Consultant, the Option shall remain in effect
and vesting of the Option shall continue only to the extent determined by the Administrator as of such change in status consistent with any minimum vesting requirements set forth in the Plan; provided, however, with respect to any Incentive Stock
Option that shall remain in effect after a change in status from Employee to Director or Consultant, such Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day
three (3) months and one (1) day following such change in status. Except as provided in Sections 7 and 8 below, to the extent that the Option was unvested on the Termination Date, or if the Grantee does not exercise the vested
portion of the Option within the Post-Termination Exercise Period, the Option shall terminate. 
 7.  Disability of
Grantee.  In the event the Grantee’s Continuous Service terminates as a result of his or her Disability, the Grantee may, but only within twelve (12) months commencing on the Termination Date (but in no event later than the
Expiration Date), exercise the portion of the Option that was vested on the Termination Date; provided, however, that if such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code and the Option is
an Incentive Stock Option, such Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the Termination Date.
To the extent that the Option was unvested on the Termination Date, or if the Grantee does not exercise the vested portion of the Option within the time specified herein, the Option shall terminate. Section 22(e)(3) of the Code provides that an
individual is permanently and totally disabled if he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than twelve (12) months. 
 8.  Death of
Grantee.  In the event of the termination of the Grantee’s Continuous Service as a result of his or her death, or in the event of the Grantee’s death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee’s termination of Continuous Service as a result of his or her Disability, the person who acquired the right to exercise the Option pursuant to Section 9 may exercise the portion of the Option
that 
  

 3 

 
was vested at the date of termination within twelve (12) months commencing on the date of death (but in no event later than the Expiration Date). To the extent that the Option was unvested
on the date of death, or if the vested portion of the Option is not exercised within the time specified herein, the Option shall terminate. 
 9.  Transferability of Option.  The Option, if an Incentive Stock Option, may not be transferred in any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of the Grantee only by the Grantee. The Option, if a Non-Qualified Stock Option, may not be transferred in any manner other than by will or by the laws of descent and distribution, provided, however, that a
Non-Qualified Stock Option may be transferred during the lifetime of the Grantee by gift or pursuant to a domestic relations order to members of the Grantee’s Immediate Family to the extent and in the manner determined by the Administrator.
Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s Incentive Stock Option or Non-Qualified Stock Option in the event of the Grantee’s death on a beneficiary designation form provided by the
Administrator. Following the death of the Grantee, the Option, to the extent provided in Section 8, may be exercised (a) by the person or persons designated under the deceased Grantee’s beneficiary designation or (b) in the
absence of an effectively designated beneficiary, by the Grantee’s legal representative or by any person empowered to do so under the deceased Grantee’s will or under the then applicable laws of descent and distribution. The terms of the
Option shall be binding upon the executors, administrators, heirs, successors and transferees of the Grantee. 
 10. Term of
Option.  The Option must be exercised no later than the Expiration Date set forth in the Notice or such earlier date as otherwise provided herein. After the Expiration Date or such earlier date, the Option shall be of no further force
or effect and may not be exercised. 
 11. Company’s Right of First Refusal. 

(a) Transfer Notice.  Neither the Grantee nor a transferee (either being sometimes referred to herein as the
“Holder”) shall sell, hypothecate, encumber or otherwise transfer any Shares or any right or interest therein without first complying with the provisions of this Section 11 or obtaining the prior written consent of the Company. In the
event the Holder desires to accept a bona fide third-party offer for any or all of the Shares, the Holder shall provide the Company with written notice (the “Transfer Notice”) of: 

 

	 	(i)	The Holder’s intention to transfer; 

  

	 	(ii)	The name of the proposed transferee; 

  

	 	(iii)	The number of Shares to be transferred; and 

  

	 	(iv)	The proposed transfer price or value and terms thereof. 

 If the Grantee proposes to transfer any Shares to more than one transferee, the Grantee shall provide a separate Transfer Notice for the proposed transfer to each transferee. The Transfer Notice shall be
signed by both the Grantee and the proposed transferee and must constitute a binding commitment of the Grantee and the proposed transferee for the transfer of the Shares to the proposed transferee subject to the terms and conditions of this Option
Agreement. 
  

 4 

 (b) Bona Fide Transfer.  If the Company determines that the
information provided by the Grantee in the Transfer Notice is insufficient to establish the bona fide nature of a proposed voluntary transfer, the Company shall give the Grantee written notice of the Grantee’s failure to comply with the
procedure described in this Section 11, and the Grantee shall have no right to transfer the Shares without first complying with the procedure described in this Section 11. The Grantee shall not be permitted to transfer the Shares if the
proposed transfer is not bona fide. 
 (c) First Refusal Exercise Notice.  The Company shall have the right to
purchase (the “Right of First Refusal”) all but not less than all, of the Shares which are described in the Transfer Notice (the “Offered Shares”) at any time within forty-five (45) days after receipt of the Transfer Notice
(the “Option Period”), provided, however, that if the Offered Shares are not Mature Shares (as defined below) then the Option Period shall be extended by the number of days necessary for the Offered Shares to become Mature Shares. The
Offered Shares shall be repurchased at (i) the per share price or value and in accordance with the terms stated in the Transfer Notice (subject to Section 11(d) below) or (ii) the Fair Market Value of the Shares on the date on which
the purchase is to be effected if no consideration is paid pursuant to the terms stated in the Transfer Notice, which Right of First Refusal shall be exercised by written notice (the “First Refusal Exercise Notice”) to the Holder.
“Mature Shares” shall mean vested Shares that have been held by the Holder (and any successor Holder) for a period of more than six (6) months after the Shares have vested. 

(d) Payment Terms.  The Company shall consummate the purchase of the Offered Shares on the terms set forth in the
Transfer Notice within 30 days after delivery of the First Refusal Exercise Notice; provided, however, that in the event the Transfer Notice provides for the payment for the Offered Shares other than in cash, the Company and/or its assigns
shall have the right to pay for the Offered Shares by the discounted cash equivalent of the consideration described in the Transfer Notice as reasonably determined by the Administrator. Upon payment for the Offered Shares to the Holder or into
escrow for the benefit of the Holder, the Company or its assigns shall become the legal and beneficial owner of the Offered Shares and all rights and interest therein or related thereto, and the Company shall have the right to transfer the Offered
Shares to its own name or its assigns without further action by the Holder. 
 (e) Assignment.  Whenever the
Company shall have the right to purchase Shares under this Right of First Refusal, the Company may designate and assign one or more employees, officers, directors or shareholders of the Company or other persons or organizations, to exercise all or a
part of the Company’s Right of First Refusal. 
 (f) Non-Exercise.  If the Company and/or its assigns do
not collectively elect to exercise the Right of First Refusal within the Option Period or such earlier time if the Company and/or its assigns notifies the Holder that it will not exercise the Right of First Refusal, then the Holder may transfer the
Shares upon the terms and conditions stated in the Transfer Notice, provided that: 

(i)          The transfer is made within 90 days of the earlier of (A) the
date the Company and/or its assigns notify the Holder that the Right of First Refusal will not be exercised or (B) the expiration of the Option Period; and 
  

 5 

 (ii)          The transferee agrees in
writing that such Shares shall be held subject to the provisions of this Option Agreement. 
 The Company shall have the right to demand further
assurances from the Grantee and the transferee (in a form satisfactory to the Company) that the transfer of the Offered Shares was actually carried out on the terms and conditions described in the Transfer Notice. No Offered Shares shall be
transferred on the books of the Company until the Company has received such assurances, if so demanded, and has approved the proposed transfer as bona fide. 
 (g) Expiration of Transfer Period.  Following such 90-day period, no transfer of the Offered Shares and no change in the terms of the transfer as stated in the Transfer Notice (including
the name of the proposed transferee) shall be permitted without a new written Transfer Notice prepared and submitted in accordance with the requirements of this Right of First Refusal. 

(h) Termination of Right of First Refusal.  The provisions of this Right of First Refusal shall terminate as to all
Shares upon the Registration Date. 
 (i) Additional Shares or Substituted Securities.  In the event of any
transaction described in Sections 10 or 11 of the Plan, any new, substituted or additional securities or other property which is by reason of any such transaction distributed with respect to the Shares shall be immediately subject to the Right
of First Refusal, but only to the extent the Shares are at the time covered by such right. 
 12. Stop-Transfer
Notices.  In order to ensure compliance with the restrictions on transfer set forth in this Option Agreement, the Notice or the Plan, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 

13. Refusal to Transfer.  The Company shall not be required (i) to transfer on its books any Shares that have been
sold or otherwise transferred in violation of any of the provisions of this Option Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall
have been so transferred. 
 14. Tax Consequences.  Set forth below is a brief summary as of the date of this
Option Agreement of some of the federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD CONSULT A TAX
ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 
  

 6 

 (a) Exercise of Incentive Stock Option.  If the Option qualifies as an
Incentive Stock Option, there will be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as
income for purposes of the alternative minimum tax for federal tax purposes and may subject the Grantee to the alternative minimum tax in the year of exercise. However, the Internal Revenue Service issued proposed regulations which would subject the
Grantee to withholding at the time the Grantee exercises an Incentive Stock Option for Social Security and Medicare based upon the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. These proposed
regulations are subject to further modification by the Internal Revenue Service and, if adopted, would be effective only for the exercise of an Incentive Stock Option that occurs two years after the regulations are issued in final form. 

(b) Exercise of Incentive Stock Option Following Disability.  If the Grantee’s Continuous Service terminates as a
result of Disability that is not permanent and total disability as such term is defined in Section 22(e)(3) of the Code, to the extent permitted on the date of termination, the Grantee must exercise an Incentive Stock Option within three
(3) months of such termination for the Incentive Stock Option to be qualified as an Incentive Stock Option. Section 22(e)(3) of the Code provides that an individual is permanently and totally disabled if he or she is unable to engage in
any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve
(12) months. 
 (c) Exercise of Non-Qualified Stock Option.  On exercise of a Non-Qualified Stock Option,
the Grantee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Grantee is an
Employee or a former Employee, the Company will be required to withhold from the Grantee’s compensation or collect from the Grantee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 
 (d) Disposition of Shares.  In the case of a Non-Qualified Stock Option, if Shares are held for more than one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option, if Shares transferred pursuant to the Option are held for more than one year after receipt of the Shares and are disposed more than two years after the
Date of Award, any gain realized on disposition of the Shares also will be treated as capital gain for federal income tax purposes and subject to the same tax rates and holding periods that apply to Shares acquired upon exercise of a Non-Qualified
Stock Option. If Shares purchased under an Incentive Stock Option are disposed of prior to the expiration of such one-year or two-year periods, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the difference between the Exercise Price and the lesser of (i) the Fair Market Value of the Shares on the date of exercise, or (ii) the sale price of the Shares. 

 

 7 

 15. Lock-Up Agreement. 

(a) Agreement.  The Grantee, if requested by the Company and the lead underwriter of any public offering of the Common
Stock (the “Lead Underwriter”), hereby irrevocably agrees not to sell, contract to sell, grant any option to purchase, transfer the economic risk of ownership in, make any short sale of, pledge or otherwise transfer or dispose of any
interest in any Common Stock or any securities convertible into or exchangeable or exercisable for or any other rights to purchase or acquire Common Stock (except Common Stock included in such public offering or acquired on the public market after
such offering) during the 180-day period following the effective date of a registration statement of the Company filed under the Securities Act of 1933, as amended, or such shorter or longer period of time as the Lead Underwriter shall specify. The
Grantee further agrees to sign such documents as may be requested by the Lead Underwriter to effect the foregoing and agrees that the Company may impose stop-transfer instructions with respect to such Common Stock subject to the lock-up period until
the end of such period. The Company and the Grantee acknowledge that each Lead Underwriter of a public offering of the Company’s stock, during the period of such offering and for the lock-up period thereafter, is an intended beneficiary of this
Section 15. 
 (b) No Amendment Without Consent of Underwriter.  During the period from identification of
a Lead Underwriter in connection with any public offering of the Company’s Common Stock until the earlier of (i) the expiration of the lock-up period specified in Section 15(a) in connection with such offering or (ii) the
abandonment of such offering by the Company and the Lead Underwriter, the provisions of this Section 15 may not be amended or waived except with the consent of the Lead Underwriter. 

16. Entire Agreement: Governing Law.  The Notice, the Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the
Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan and this Option Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons
other than the parties. The Notice, the Plan and this Option Agreement are to be construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be determined to be illegal or
unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. 
 17. Construction.  The captions used in the Notice and this Option Agreement are inserted for convenience and shall not be deemed a part of the Option for construction or interpretation.
Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

  

 8 

 18. Administration and Interpretation.  Any question or dispute regarding
the administration or interpretation of the Notice, the Plan or this Option Agreement shall be submitted by the Grantee or by the Company to the Administrator. The resolution of such question or dispute by the Administrator shall be final and
binding on all persons. 
 19. Venue and Waiver of Jury Trial.  The Company, the Grantee, and the
Grantee’s assignees pursuant to Section 9 (the “parties”) agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan or this Option Agreement shall be brought in the United States District Court
for the Northern District of California (or should such court lack jurisdiction to hear such action, suit or proceeding, in a California state court in the County of San Francisco) and that the parties shall submit to the jurisdiction of such court.
The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY
HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 19 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified
to the minimum extent necessary to make it or its application valid and enforceable. 
 20. Notices.  Any
notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United
States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown in these instruments, or to such other address as such party may designate in writing
from time to time to the other party. 
 21. Confidentiality.  The Company shall provide to the Grantee, during
the period the Option is outstanding, copies of financial statements of the Company at least annually. The Grantee understands and agrees that such financial statements are confidential and shall not be disclosed by the Grantee, to any entity or
person, for any reason, at any time, without the prior written consent of the Company, unless required by law. If disclosure of such financial statements is required by law, whether through subpoena, request for production, deposition, or otherwise,
the Grantee promptly shall provide written notice to Company, including copies of the subpoena, request for production, deposition, or otherwise, within five (5) business days of their receipt by the Grantee and prior to any disclosure so as to
provide Company an opportunity to move to quash or otherwise to oppose the disclosure. Notwithstanding the foregoing, the Grantee may disclose the terms of such financial statements to his or her spouse or domestic partner, and for legitimate
business reasons, to legal, financial, and tax advisors. 
 END OF AGREEMENT 

 

 9 

 EXHIBIT A 

INVENSENSE, INC. 2004 STOCK INCENTIVE PLAN 
 EXERCISE NOTICE 
  
 Attention: Secretary 
 1.        Effective
as of today,                         , the undersigned (the “Grantee”) hereby elects to exercise the
Grantee’s option to purchase                      shares of the Common Stock (the “Shares”) of InvenSense, Inc., (the
“Company”) under and pursuant to the Company’s 2004 Stock Incentive Plan, as amended from time to time (the “Plan”) and the [    ] Incentive [    ] Non-Qualified Stock Option
Award Agreement (the “Option Agreement”) and Notice of Stock Option Award (the “Notice”) dated
                        ,             . Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Exercise Notice. 

2.        Representations of the Grantee.  The Grantee acknowledges that the
Grantee has received, read and understood the Notice, the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
 3.        Rights as Shareholder.  Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided
in Section 10 of the Plan. 
 The Grantee shall enjoy rights as a shareholder until such time as the Grantee disposes of
the Shares or the Company and/or its assignee(s) exercises the Right of First Refusal. Upon such exercise, the Grantee shall have no further rights as a holder of the Shares so purchased except the right to receive payment for the Shares so
purchased in accordance with the provisions of the Option Agreement, and the Grantee shall forthwith cause the certificate(s) evidencing the Shares so purchased to be surrendered to the Company for transfer or cancellation. 

4.        Delivery of Payment.  The Grantee herewith delivers to the Company the
full Exercise Price for the Shares, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 4(d) of the Option Agreement. 

5.        Tax Consultation.  The Grantee understands that the Grantee may suffer
adverse tax consequences as a result of the Grantee’s purchase or disposition of the Shares. The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for any tax advice. 
  

 1 

 6.        Taxes.  The Grantee
agrees to satisfy all applicable federal, state and local income and employment tax withholding obligations and herewith delivers to the Company the full amount of such obligations or has made arrangements acceptable to the Company to satisfy such
obligations. In the case of an Incentive Stock Option, the Grantee also agrees, as partial consideration for the designation of the Option as an Incentive Stock Option, to notify the Company in writing within thirty (30) days of any disposition
of any shares acquired by exercise of the Option if such disposition occurs within two (2) years from the Date of Award or within one (1) year from the date the Shares were transferred to the Grantee. If the Company is required to satisfy
any federal, state or local income or employment tax withholding obligations as a result of such an early disposition, the Grantee agrees to satisfy the amount of such withholding in a manner that the Administrator prescribes. 

7.        Restrictive Legends.  The Grantee understands and agrees that the
Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or
federal securities laws: 
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES. 
 8.        Successors and Assigns.  The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this
agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon the Grantee and his or her heirs, executors, administrators,
successors and assigns. 
  

 2 

 9.        Construction.  The
captions used in this Exercise Notice are inserted for convenience and shall not be deemed a part of this agreement for construction or interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the
plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 
 10.      Administration and Interpretation.  The Grantee hereby agrees that any question or dispute regarding the administration or interpretation of this
Exercise Notice shall be submitted by the Grantee or by the Company to the Administrator. The resolution of such question or dispute by the Administrator shall be final and binding on all persons. 

11.      Governing Law; Severability.  This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of California without giving effect to any choice of law Rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable. 

12.      Notices.  Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United
States), with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party. 

13.      Further Instruments.  The parties agree to execute such further instruments and
to take such further action as may be reasonably necessary to carry out the purposes and intent of this agreement. 

14.      Entire Agreement.  The Notice, the Plan and the Option Agreement are incorporated
herein by reference and together with this Exercise Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan, the Option Agreement and this Exercise
Notice (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. 
  

 3 

							
	Submitted by:	 		 	Accepted by:
			
	GRANTEE:	 		 	INVENSENSE, INC.
				
		 		 	By:	 	  

							
				
	  
	 		 	Title:	 	  

	(Signature)	 		 		 	
			
	Address:	 		 	Address:
			
	  
	 		 	  

	  
	 		 		 	

  

 4 

 EXHIBIT B 

INVENSENSE, INC. 2004 STOCK INCENTIVE PLAN 
 INVESTMENT REPRESENTATION STATEMENT 
  

					
	GRANTEE:	  	  
	  	
	  
 COMPANY:
	  	INVENSENSE, INC.	  	
	  
 SECURITY:
	  	COMMON STOCK	  	
	  
 AMOUNT:
	  	  
	  	
	  
 DATE:
	  	  
	  	

 In connection with the purchase of the above-listed Securities, the undersigned Grantee represents to the Company
the following: 
 (a) Grantee is aware of the Company’s business affairs and financial condition and has acquired
sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Grantee is acquiring these Securities for investment for Grantee’s own account only and not with a view to, or for resale in
connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). 
 (b) Grantee acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a
specific exemption therefrom, which exemption depends upon among other things, the bona fide nature of Grantee’s investment intent as expressed herein. Grantee further understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such registration is available. Grantee further acknowledges and understands that the Company is under no obligation to register the Securities. Grantee understands that the
certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company. 

(c) Grantee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in
substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the
issuer qualifies under Rule 701 at the time of the grant of the Option to the Grantee, the exercise will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the
satisfaction of certain of the conditions specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the 
  

 1 

 
availability of certain public information about the Company, (3) the amount of Securities being sold during any three month period not exceeding the limitations specified in
Rule 144(e), and (4) the timely filing of a Form 144, if applicable. 
 In the event that the Company does not qualify
under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than one year after the later of the
date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two (2) years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of the paragraph immediately above. 

(d) Grantee further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied,
registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange
Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Grantee understands that no assurances can be given that any such
other registration exemption will be available in such event. 
 (e) Grantee represents that Grantee is a resident of the state
of  

                         
       . 
  

	
	Signature of Grantee:
	
	  

	
	Date:
                            ,
            

  

 2

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