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Exhibit 10.13  

 
 

EMPLOYMENT AGREEMENT    

        This
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of September 5, 2006, is entered into by and between Netlist, Inc., a
Delaware corporation (the "Company"), and Chun K. Hong, an individual ("Employee"). 

        NOW,
THEREFORE, in consideration for the promises and obligations set forth below, the Company and Employee agree as follows: 

        1.     Employment.    The Company shall employ Employee as the President, Chief Executive Officer and Chairman of the
Board of Directors of the Company on the terms and conditions set forth herein from and after the date hereof until Employee's employment is terminated as provided in  Section 4. During the term of
his employment with the Company, Employee shall devote his full-time efforts to his duties as the
President, Chief Executive Officer and Chairman of the Board of Directors of the Company, and shall perform such other duties consistent with such positions as may be assigned to Employee from time to
time by the Board of Directors of the Company (the "Board"); provided, however, that Employee may
(i) manage his personal business affairs, (ii) serve on the boards of civic and charitable organizations, and (iii) serve on the board of directors of any for-profit
corporations if such service with such corporation or corporations is expressly authorized by the Board, in each of the foregoing cases so long as such activities do not interfere with the performance
of Employee's duties with the Company. During the term of his employment, Employee shall be subject to, and shall comply with, the Company's policies and practices as they may from time to time be
adopted or modified, provided that such policies and practices do not conflict with any law, government regulation, generally accepted accounting policies or generally accepted practices of corporate
governance. 

        2.     Compensation.    Employee's initial annual base salary shall be $323,000, paid in accordance with the Company's
standard payroll policies for its executive officers. The annual base salary amount may be increased from time to time at the sole discretion of the Board. Employee shall have the opportunity to earn
annual performance bonuses, at the Board's discretion, of up to seventy-five percent (75%) of Employee's base salary based upon the achievement of reasonable performance objectives for
each annual period during the term of Employee's employment, commencing with the period beginning on January 1, 2007. Each performance bonus shall be paid to Employee in the first quarter of
the year following the applicable annual performance period. The performance objectives for each annual performance period and the amounts allocated to the achievement of such performance objectives
for such annual performance period shall be determined by the Board in consultation with Employee and the Compensation Committee of the Board. In addition, as soon as practicable after the
consummation of the initial public offering of the common stock of the Company contemplated by the Registration Statement on Form S-1 filed by the Company with the Securities and
Exchange Commission, the Company shall pay to Employee a cash success bonus in the amount of $200,000. All compensation paid to Employee shall be subject to such tax withholdings or other deductions
as may be required by applicable law. 

        3.     Benefits.    Employee shall be entitled to participate in and receive all employee benefits that are generally
made available to employees of the Company, including any benefits that are made available to the executive officers of the Company. Employee shall also be entitled to (i) reimbursement of all
professional fees and expenses incurred by Employee in connection with (a) income tax planning and preparation, (b) income tax audits and the defense of income tax claims, and
(c) estate planning, including the creation and modification of wills, codicils and trusts, (ii) reimbursement of the professional and membership fees and expenses incurred by Employee
to maintain membership in, or belong to, one country club in Orange County (including reasonable expenses for dinners, guest passes and other reasonable expenses) and such professional organizations
and societies as may be designated by Employee from time to time, (iii) reimbursement of all legal fees incurred by Employee in connection with his employment, (iv) use of a Company
automobile during the term of Employee's employment hereunder, (v) reimbursement of health club dues, executive 

 

physical
examinations and other similar expenses related to the maintenance of the physical well being of employee that are not covered by Employee's health insurance, and (vi) such other
benefits as Employee may reasonably request that are commensurate with Employee's position and which may facilitate Employee's performance of his duties under this Agreement, and which are approved by
the Board. 

        4.     Termination of Employment.  

        4.1   Term.    The term ("Term") of this Agreement shall commence on September 1, 2006 (the "Effective Date") and shall
initially
continue for a period of five (5) years; provided, however, that unless one of the parties hereto provides the other with written notice of its desire to terminate this Agreement at least six
(6) months prior to such initial Term or any successor term, the Term shall automatically be extended for successive periods of one (1) year each. Notwithstanding the foregoing, this
Agreement shall terminate effective as of the date of Employee's death or, subject to any applicable federal or state disability or leave laws, disability (as determined in accordance with
Section 4.6), and Employee's employment is intended to be "at will." Consequently, subject to the provisions of this Section 4,
(i) Employee can resign at any time and (ii) subject to the notice provisions set forth herein and applicable federal and state statutes and regulations relating to employment, the
Company may terminate Employee's employment at any time for any lawful reason or for no reason. No policies or procedures of the Company or benefits provided by the Company, whether oral or written,
express or implied, formal or informal, are intended, nor shall they be construed, to limit the right or ability of the Company to terminate Employee's employment at any time or under any
circumstances. Except to the extent Employee's employment is terminated in violation of any applicable federal or state statute or regulation relating to employment, this  Section 4 shall constitute
the exclusive remedy available to Employee or the Company relating to or arising from the termination of Employee's
employment by the Company for any reason or any resignation by Employee, including claims for breach of contract or in tort arising therefrom. 

        4.2   Termination by the Company With Cause.    The Company may terminate Employee's employment at any time with
Cause (as defined below) on written notice of such termination setting forth the basis therefor. Except as otherwise agreed in writing (or as required by law), upon termination of Employee's
employment with Cause, the Company shall have no further obligation to Employee under this Agreement by way of compensation or otherwise other than to pay Employee his base salary through the date of
such termination. As used in this Agreement, "Cause" shall mean a reasonable determination by the Board, acting in good faith based upon actual knowledge at the time, that Employee has
(i) materially breached the terms of this Agreement, that certain Agreement to Arbitrate between Company and Employee in the form of  Exhibit A to this Agreement, that certain Proprietary
Information and Invention Assignment Agreement between the Company and Employee, or any
other material agreement between the Company and Employee, (ii) committed gross negligence or engaged in serious misconduct in the execution of his assigned duties, (iii) been convicted
of a felony or other serious crime involving moral turpitude, (iv) materially refused to perform any lawful duty or responsibility consistent with Employee's position with the Company, or
(v) materially breached his fiduciary duty or his duty of loyalty to the Company. Notwithstanding the foregoing, Employee's employment shall not be terminated for Cause pursuant to this
Section 4.2 unless and until Employee has received notice of a proposed termination for Cause, and Employee has had an opportunity to be heard at a meeting with at least a majority of the
members of the Board. Employee shall be deemed to have had such opportunity if given written notice by any director acting on behalf of the Board at least seventy two (72) hours in advance of
such meeting. After Employee's hearing before the Board pursuant to this Section 4.2, the Board shall promptly, and in any event within seventy two (72) hours, decide to uphold or
rescind Employee's termination for Cause (the "Final Action"). If the Final 

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Action
upholds Employee's termination for Cause, Employee shall have the right to appeal the Final Action in accordance with the procedures set forth in that certain Agreement to Arbitrate between the
Company and Employee; provided, however, that Employee shall prevail in such appeal, and Cause shall not be deemed to exist, unless the Company
establishes in such appeal by "clear and convincing evidence" that Cause existed for such termination. If Employee elects to appeal the Final Action, the Company shall continue to pay Employee's base
salary and benefits for a period of six (6) months after the date of the Final Action, or until final resolution of such appeal (the "Decision"),
whichever period is shorter, at a rate and time and in an amount and manner equal to one hundred percent (100%) of the base salary and benefits payable to Employee immediately prior to the Final
Action. The Company shall pay all costs incurred by Employee in preparing for the Final Action and in pursuing any appeal thereof, including all professional fees and expenses. If Employee is the
non-prevailing party in the Decision, Employee shall reimburse the Company for the costs, fees and expenses paid by the Company and shall reimburse the Company for any base salary and
benefits paid to Employee during the period of time from the Final Action through the date of the Decision. Any proceedings by the Board pursuant to this Section 4.2 shall be conducted in a
confidential manner and all steps shall be taken to prevent any harm to Employee's reputation. 

        4.3   Termination by the Company Without Cause; Resignation of Employee With Good Reason.  

         (a)   Notice of Termination Without Cause or Resignation With Good Reason.    The Company may terminate Employee's
employment at any time
without Cause on 30 days' advance written notice to Employee of such termination. Employee may resign with Good Reason on 30 days' advance written notice to the Company of such
resignation, provided that such notice is given by Employee within 90 days following
the occurrence of any event constituting Good Reason (as defined below) and, provided further, that the Company does not remedy the basis for such
termination prior to the expiration of such 30 days notice period. As used in this Agreement, "Good Reason" shall mean (i) the assignment
to Employee, without his consent, of duties inconsistent with Employee's position so as to constitute a diminution of status with the Company, including an assignment of Employee to a position other
than President and Chief Executive Officer of the Company, (ii) a reduction by the Company in the base salary as in effect at any time without Employee's consent, other than a decrease of up to
(and including) ten percent (10%) in connection with an adverse change in the business operations or financial condition of the Company, (iii) the occurrence of a Change of Control (as defined
below), or (iv) a requirement that Employee relocate (or report on a regular basis) to an office outside of Orange County without Employee's consent. For the purposes of this Agreement, a
"Change of Control" shall mean any of the following: 

	(1)
	Any
person or entity is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Company representing a percentage of the combined voting power of the Company's then outstanding securities that is greater than 50%; or

	(2)
	the
following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the
Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for
election was previously so approved or recommended; or 

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	(3)
	There
is consummated a merger or consolidation of the Company in which (A) the Company does not survive, or (B) the Company survives, but the shares of the
Company's Common Stock outstanding immediately prior to such merger or consolidation represent 50% or less of the voting power of the Company after such merger or consolidation; or

	(4)
	the
stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. 

        (b)   Termination Without Cause or Resignation With Good Reason.    In the event of any termination of Employee's
employment by the Company without Cause or resignation by Employee with Good Reason, (i) the Company shall continue to pay to Employee his base salary for the one-year period
following the effective date of such termination or resignation, (ii) the Company shall reimburse Employee for any payments actually made by him for health insurance from the effective date of
such termination or resignation to the early of (A) the first anniversary of such termination or resignation and (B) the date on which he becomes employed with another entity in a
monthly amount not to exceed the amount that Employee would be required to pay under COBRA if he were to elect to obtain health insurance under COBRA that is substantially equivalent to his
then-current health insurance (with the understanding that, during such period, Employee is free to purchase health insurance under COBRA, to the extent available, or otherwise, or not at
all, but that he is entitled only to reimbursement for amounts actually paid by him for health insurance, within the limits stated above), (iii) the Company shall pay to Employee the
pro-rated portion (based on the number of days in an annual performance period prior to the effective date of such termination or resignation) of any annual performance bonus to which
Employee would otherwise have been entitled for the annual performance period during which such termination or resignation becomes effective, such payment to be made within fifteen business days of
the date on which it can first be determined that such bonus has been earned, and (iv) the stock option granted to Employee on August 7, 2006, allowing for the purchase of 500,000 shares
of common stock of the Company and all other stock options held by Employee shall immediately become fully vested and exercisable as of the effective date of such termination or resignation. In
addition to the foregoing, if any such termination or resignation is effective after the completion of an annual performance period for which Employee has earned a performance bonus but before such
bonus has been paid, the Company shall pay such performance bonus to Employee as and when such bonus would have been paid absent such termination. 

        4.4   Resignation of Employee Without Good Reason.    Employee may voluntarily resign (i.e., without Good Reason) at
any time on six (6) months' advance written notice to the Company of such resignation. In the event of any such resignation, the Company may, by written notice to Employee, make such
resignation effective immediately or as of any date prior to the expiration of the six (6) months' notice period, in which event such resignation shall be effective as of such earlier date;  provided,
however, that any stock options held by Employee shall continue to vest during the full six (6) month notice period even if the Company
elects to make such resignation effective immediately or as of any date prior to the expiration of such notice period. Except as otherwise agreed in writing (or as required by law), upon any such
resignation, the Company shall have no further obligation to Employee under this Agreement by way of compensation or otherwise other than to pay Employee his base salary through the effective date of
such resignation; provided, however, that if such resignation is effective after the completion of an 

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annual
performance period for which Employee has earned a performance bonus but before such bonus has been paid, the Company shall pay such performance bonus to Employee as and when such bonus would
have been paid absent such termination. 

        4.5   Termination of Employment Upon Employee's Death.    In the event of Employee's death, (i) the Company
shall pay to Employee's estate within thirty days of Employee's death a lump-sum amount equal to one half of the then effective annual base salary, and (ii) any stock options held
by Employee shall be deemed vested as of the date of his death to the same extent as they would have been vested one year thereafter had Employee remained employed by the Company during such year and
each such stock option shall be exercisable for the period set forth in the agreement evidencing such stock option. Except as required by law, no other compensation will be paid to Employee's estate;  provided,
however, that if Employee dies after the completion of an annual performance period for which Employee has earned a performance bonus but
before such bonus has been paid, the Company shall pay such performance bonus to Employee's estate at such time as it would otherwise have been paid to Employee. 

        4.6   Termination of Employment Due to Disability.    The Company may terminate Employee's employment on
30 days' advance written notice to Employee in the event that he at any time becomes unable to perform his duties and responsibilities hereunder due to mental or physical disability. In the
event of any such termination, (i) the Company shall continue to pay to Employee his base salary for the six months following the effective date of such termination, and (ii) any stock
options held by Employee shall be deemed vested as of the effective date of such termination to the same extent as they would have been vested one year thereafter had Employee remained employed by the
Company during such year, and each such stock option shall be exercisable for the period set forth in the agreement evidencing such stock option. Except as required by law, no other compensation will
be paid to Employee upon such termination; provided, however, that if such termination is effective after the completion of a full calendar year in
which Employee has earned an annual performance bonus but before such bonus has been paid, the Company shall pay such bonus to Employee as and when such bonus would have been paid absent such
termination. 

        4.7.  Excess Parachute Payments.    In the event that any payment or benefit received or to be received by Employee
upon the termination of his employment, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement by the Company, any predecessor or successor to the Company
or any corporation affiliated (within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code")), with the
Company or which becomes affiliated with the Company (collectively all such payments are hereinafter referred to as the "Total Payments") is deemed to
be an "Excess Parachute Payment" (in whole or in part) to Employee within the meaning of Section 280G(b)(1) of the Code as in effect at such time, then, in addition to all other amounts to be
paid to Employee by the Company hereunder, the Company shall, within 30 days of the date on which any Excess Parachute Payment is made, pay to Employee, in addition to any other payment,
coverage or benefit due and owing hereunder, an amount determined by (i) multiplying the rate of excise tax then imposed by Code Section 4999 by the amount of the "Excess Parachute
Payment" received by Employee (determined without regard to any payments made to Employee pursuant to this Section 4.7) and (ii) dividing
the product so obtained by the amount obtained by subtracting (A) the aggregate local, state and Federal income tax rates applicable to the receipt by Employee of the "Excess Parachute Payment"
(taking into account the deductibility for Federal income tax purposes of the payment of state and local income taxes thereon) from (B) the amount obtained by subtracting from 1.00 the rate of
excise tax then imposed by Section 4999 of the Code. It is the Company's intention that Employee's net after-tax position be substantially the same as it would have been had
Sections 280G and 4999 not been part of the Code. For purposes of implementing this Section 4.7, (i) no 

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portion,
if any, of the Total Payments, the receipt or enjoyment of which Employee shall have effectively waived in writing prior to the date of payment of the Total Payments, shall be taken into
account, and (ii) the value of any non-cash benefit or any deferred cash payment included in the Total Payments shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code. 

        5.     Miscellaneous Provisions.

        5.1   Severability.    In the event that any of the provisions of this Agreement shall be held to be invalid or
unenforceable, then all other provisions shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included in this Agreement. 

        5.2   Successors and Assigns.    This Agreement shall be binding upon the heirs, executors, administrators, and
successors-in-interest of the parties hereto. 

        5.3   Governing Law.    This Agreement shall be construed and enforced according to the laws of the State of
California, excluding its choice of law rules. 

        5.4   Integrated Agreement.    This Agreement, including  Exhibit A hereto, supersedes all previous correspondence, promises, representations, and
agreements, if any, either written or oral, between the
Company and Employee. No provision of this Agreement may be modified except by a writing signed by both the Company and Employee. 

        5.5   Notices.    All notices, demands, requests, consents, approvals or other communications required or permitted
to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served or deposited in the United States mail, registered or certified, return
receipt requested, postage prepaid, addressed (i) to the attention of the Board, with a copy to the Secretary of the Company, at the Company's principal executive offices and (ii) to
Employee at Employee's home address as indicated on the Company's records or, in either such case, at such other address as such party shall have specified most recently by written notice. Notices
shall be deemed given on the date of service if personally served. Notices mailed as provided herein shall be deemed given on the third business day following mailing. 

        5.6   ACKNOWLEDGMENT BY EMPLOYEE.    EMPLOYEE HAS CAREFULLY READ AND CONSIDERED THE PROVISIONS OF THIS AGREEMENT AND
HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY OF HIS CHOICE PRIOR TO EXECUTING THIS AGREEMENT. THIS AGREEMENT IS BEING ENTERED INTO VOLUNTARILY AND WITHOUT COERCION OF ANY
KIND.

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

	THE COMPANY:	 	EMPLOYEE:
	

NETLIST, INC.	
 	

 
	

By:	

/s/  LEE KIM      
	
 	

/s/  CHUN K. HONG      

	 	Lee Kim, Vice President, Secretary and Chief Financial Officer	 	CHUN K. HONG

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EXHIBIT A    

AGREEMENT TO ARBITRATE 

        This
Agreement to Arbitrate is made by and between Chun K. Hong (hereinafter referred to as "Employee"), and Netlist, Inc. (hereinafter referred to as "Employer" or "Company"), a
California corporation. 

        WHEREAS
Employer and Employee want to provide for the expeditious cost-effective resolution of any and all Disputes (as hereinafter defined) of any kind and nature which may
now, or in the past or in the future exist between them; 

        WHEREAS
Employer and Employee want to use an expeditious cost-effective means to avoid the delays and uncertainties of resolving Disputes through the courts; 

        WHEREAS
Employer and Employee want to enter into an agreement for final and binding resolution of any Disputes through the arbitration process: 

        NOW
THEREFORE, in consideration of Employee being employed by the Company, Employer and Employee agree to final and binding arbitration as follows: 

        1.     Scope of the Agreement to Arbitrate.    Employer and Employee mutually agree to submit to final and binding
arbitration of all controversies, claims, disputes, and matters in question ("Disputes") arising out of, or relating to this Agreement, or breach thereof, or out of Employee's employment with Employer
or termination of employment with Employer, including but not limited to, (1) claims arising under the Federal and California anti-discrimination statutes, including but not limited
to Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the California Fair Employment and Housing Act; (2) contract claims;
(3) actions for breach of implied contract, including actions for breach of the covenant of good faith and fair dealing; and (4) common law tort claims. Disputes shall not include claims
for unemployment benefits or workers' compensation benefits. 

        2.     Definition of the Term "Employer".    The term "Employer" as defined herein includes, but is not limited to, any
present or former employee, officer, director, manager and/or supervisor, benefit plan administrator, sponsor, and/or fiduciary in their capacity as benefit plan administrators and as individuals, and
any agent of Employer. The term "Employer" shall be further defined to include any parent, subsidiary, affiliated and/or successor company. 

        3.     Agreement to Cover All Past, Present and Future Disputes.    This Agreement to Arbitrate shall cover all
Disputes between Employer and Employee that may have arisen prior to and after the date of execution of this Agreement to Arbitrate. 

        4.     Exercising the Right to Arbitrate—Notice to Arbitrate.    Either of the parties may exercise the
right to arbitrate any Dispute against the other by sending a written notice to arbitrate to the other party by Certified Mail of any action which gives rise to the Dispute or when the party knew or
reasonably should have known of the existence of any Dispute. The written notice shall identify and describe the nature of all Disputes asserted and the facts upon which such Disputes are based. 

        5.     Selection of the Arbitrator.    The arbitration will be conducted by Judicial Arbitration Mediation Services
("JAMS"), ADR Services, Inc. ("ADR") or some other mutually agreed upon arbitrator or dispute resolution organization. If the parties cannot agree upon an arbitrator, they shall submit the
Dispute to JAMS or ADR, as he case may be, and utilize the rules and procedures of JAMS or ADR, as the case may be, to choose an arbitrator. 

        6.     Venue; Consent to Jurisdiction.    The arbitration will be held in Orange County, California, and all parties
hereby consent to the personal jurisdiction of same. 

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        7.     Payment of the Arbitrator's Fees and Costs and Setting the Date, Time and Place of the Arbitration.    The
payment of arbitration filing fees and fees of the arbitrator shall be paid consistent with California law governing arbitration agreements. Each party shall bear his/her/its own attorneys' fees,
witness fees and costs not unique to arbitration. The parties shall mutually agree with the arbitrator on the date, time and place of the arbitration. In the event that the parties are unable to
mutually agree to the date, time, and place for the arbitration to be conducted, the selected arbitrator shall determine the date, time, and place of the arbitration. 

        8.     Authority of the Arbitrator; Time Deadline for Issuance of Decision.    The arbitrator shall have exclusive
authority to resolve any Dispute(s) between the parties. The arbitrator shall have the power to award damages against any party and to make an award granting such further relief as he/she deems just,
proper, and equitable. The arbitrator shall be bound to follow California law and case precedent, or, federal law and case precedent, if the Dispute alleges a violation of federal law. Any decision of
the arbitrator will not be binding if the arbitrator fails to follow the requisite California or federal law and case precedent. The arbitrator shall render a written arbitration decision that reveals
the essential findings and conclusions upon which the award is based. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. 

        9.     Right to Representation.    Each party may be represented throughout the arbitration proceedings by counsel of
his/her/its own choosing. Each party shall pay its own attorneys' fees. However, if any party prevails on a statutory claim which affords the prevailing party attorneys' fees, the arbitrator may award
reasonable attorneys' fees to the prevailing party. 

        10.   Right to Pre-hearing Discovery.    Each party shall have the right to pre-hearing
discovery. This pre-hearing discovery shall be sufficient to entitle each party to adequately arbitrate his/her/its claims. 

        11.   Final and Binding Award of Arbitrator Enforceable in Court.    Any award issued by an arbitrator pursuant to
this Agreement to Arbitrate shall be final and binding and enforceable in a court of competent Jurisdiction. 

        12.   Right to Injunction.    Notwithstanding any other provision herein, Employee and Employer may obtain any
provisional remedy including, without limitation, injunctive or similar relief, from any court of competent jurisdiction as may be necessary to protect their respective rights and interests pending
arbitration, particularly if necessary, to avoid irreparable harm. For example, Employer shall, in addition to any other rights or remedy which it may have, be entitled to seek equitable and/or
injunctive relief as may be available from any court of competent jurisdiction to restrain Employee from violating any of his/her confidentiality obligations to Employer. 

        13.   Opportunity to Have this Agreement Reviewed by an Attorney.    Employer and Employee agree that they have had
an opportunity to review this agreement and its legal implications with an attorney. Employer and Employee represent to each other that each understands the legal effect of entering into this
Agreement to Arbitrate all past, present, and future disputes that they may have with each other. 

        14.   Entire Agreement.    This agreement supersedes any and all other agreements, both oral and written, between the
parties as to matters stated herein, unless specifically stated to the contrary in a written agreement between the parties, and constitutes the sole, entire, and complete agreement between the
parties. 

        15.   Not an Employment Agreement.    This Agreement is not, and shall not be construed to create any contract of
employment, express or implied. Nor does this Agreement in any way alter the "at-will" status of Employee's employment. 

        16.   Partial Invalidity, Captions, and Paragraph Headings.    If any provision of this agreement is held to be
invalid, void, or unenforceable by a court of competent jurisdiction, the remaining provisions of the agreement shall, nevertheless, continue in full force and effect without being impaired or 

8

 

invalidated
in any way so as to enforce the parties' intent to arbitrate any and all Disputes between them. The captions and paragraph headings used herein are for convenience only, are not a part of
this agreement, and shall not be used in interpreting and/or construing this agreement. 

        17.   Notices Given by a Party.    Written notices to be given under this agreement shall be sent by Certified Mail,
Return Receipt Requested, to Employer at 475 Goddard, Irvine, California 92618 and to Employee at: 

SO
AGREED TO ON THE DATE BELOW: 

	

DATED:	

 	
 	

EMPLOYEE	

 
	 	
	 	 	

	DATED:	 	 	EMPLOYER	 
	 	
	 	 	

9

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Exhibit 10.14  

 
  PERFORMANCE INCENTIVE AGREEMENT    

        This
PERFORMANCE INCENTIVE AGREEMENT (this "Agreement") is entered into as of August     , 2006, by and between Netlist, Inc., a Delaware corporation (the
"Company"), and                        , an individual ("Employee"), with reference to the following recitals of fact: 

R E C I T A L S:  

        WHEREAS, the Company wishes to compensate Employee for his prior service as an employee of the Company and retain his future services as an employee of the
Company; 

        WHEREAS,
the Compensation Committee of the Board of Directors of the Company has authorized the compensation provided for in this Agreement, including the grant to Employee of the stock
option described in Section 1 of this Agreement upon his execution of this Agreement; and 

        WHEREAS,
the Company proposes to enter into an Underwriting Agreement with Thomas Weisel Partners LLC, Needham & Company, LLC, and WR Hambrecht + Co LLC, as
representatives (the "Representatives"), of the several Underwriters named in Schedule I to such agreement (collectively, the "Underwriters") and certain selling stockholders of the Company,
providing for a public offering (the "Offering") of shares of Common Stock of the Company (the "Shares") pursuant to a Registration Statement on Form S-1 filed with the Securities
and Exchange Commission (the "SEC"). 

        NOW,
THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 

A G R E E M E N T:  

        1.     Grant of Stock Option.    Concurrently with Employee's execution of this Agreement, the Company shall grant to
Employee under its 2000 Equity Incentive Plan, as amended (the "Plan"), a nonqualified stock option to purchase 100,000 shares of the common stock of the Company (the "Option"). The Option shall have
an exercise price of $7.00 per share, shall vest and become exercisable in full at the end of the Lock-Up Period (as defined below) if Employee has not terminated his employment with the
Company prior to such date, and, once vested, shall be exercisable for 10 years from the date of this Agreement. Prior to the end of the Lock-Up Period, no portion of the Option
shall be exercisable. The Option shall be evidenced by a Nonqualified Stock Option Agreement to be entered into by the Company and Employee, which agreement shall be in the general form previously
approved by the Board of Directors of the Company for grants under the Plan. 

        2.     Bonus Upon Completion of the Offering.    As soon as practicable after the consummation of the Offering, the
Company shall pay to Employee a cash success bonus in the amount of $100,000. If Employee terminates his employment with the Company prior to the end of the Lock-Up Period, Employee shall
promptly pay the entire amount of such success bonus back to the Company. 

        3.     Sale of Shares in the Offering.    If the Underwriters exercise their 30-day option to purchase
additional Shares to cover over-allotments in connection with the Offering, the Company hereby agrees that Employee shall be entitled to sell, as part of such over-allotment
option, the number of shares of the Company's common stock held by him that would provide him with gross proceeds from such sale of $750,000. 

        4.     Lock-up Agreement.

        (a)   Employee
agrees that, during the period specified in the following paragraph (the "Lock-Up Period"), he will not offer, sell, contract to sell, pledge
(except a pledge for the benefit of the Company pursuant to an agreement entered or to be entered into between the Company and him), grant any option to purchase, make any short sale or otherwise
dispose of any shares of common stock of the Company, whether now owned or hereafter acquired, owned directly by him (including holding as a custodian) or with respect to which he has beneficial
ownership within the 

rules
and regulations of the SEC (collectively "Employee's Shares"). The foregoing restriction is expressly agreed to preclude Employee from engaging in any hedging or other transaction which is
designed to or which reasonably could be expected to lead to or result in a sale or disposition of Employee's Shares even if such Shares would be disposed of by someone other than Employee. Such
prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect
to any of Employee's Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares. 

        (b)   The
Lock-Up Period shall commence upon the expiration or termination of the "lock-up period" provided for in the Lock-Up Agreement to
be entered into by Employee and the Representatives in connection with the Offering and shall continue until the second anniversary of such expiration or termination. 

        (c)   Notwithstanding
the foregoing, Employee may transfer (i) any number of Employee's Shares (A) as a bona fide
gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth in this Section 4, or (B) to any trust for the direct or indirect
benefit of Employee or his spouse or children, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth in this Section 4, and provided further that
any such transfer shall not involve a disposition for value, and (ii) up to 25,000 shares in any three-month period pursuant to a trading plan adopted pursuant to Rule 10b5-1
under the Securities Exchange Act of 1934, as amended, and approved by the Company, which approval shall not be unreasonably withheld. 

        (d)   Employee
agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of Employee's Shares except
in compliance with the foregoing restrictions. 

        5.     Binding Agreement; Amendments.    The provisions of this Agreement are irrevocable and shall be binding upon
each party's heirs, legal representatives, successors, and assigns. This Agreement may not be amended or modified except by a written instrument signed by each party to this Agreement. 

        6.     Counterparts; Facsimile.    This Agreement may be executed in any number of counterparts and may be delivered by
telecopy or facsimile, each of which shall be an original but all of which taken together shall constitute one Agreement. 

        7.     Governing Law.    This Agreement and all amendments hereto shall be governed by and construed in accordance with
the laws of the State of California. 

        8.     Severability.    In case any provision of this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 

[signature
page follows] 

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

NETLIST, INC.

	By:	 	 	 
	 	
	 	

	 	Chun Ki Hong

President and

Chief Executive Officer	 	[Name]

SIGNATURE PAGE TO PERFORMANCE INCENTIVE AGREEMENT 

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