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a101yifanliang

DB2/21688765.1   ALPHA AND OMEGA SEMICONDUCTOR LIMITED         Exhibit 10.1 April 28, 2010    Mr. Yifan Liang  c/o Alpha and Omega Semiconductor Incorporated  475 Oakmead Parkway  Sunnyvale, California 94085     Dear Yifan:  We are pleased to inform you that the Company's Board of Directors has approved a new  severance benefit program for you.  The purpose of this letter agreement is to set forth the terms  and conditions of your severance benefits and to explain certain limitations that may govern their  overall value or payment.  Your severance package will become payable should your employment terminate under  certain circumstances prior to or following certain changes in ownership or control of the  Company.  To understand the full scope of your benefits, you should familiarize yourself with  the definitional provisions of Part One of this letter agreement.  The benefits comprising your  severance package are detailed in Parts Two and Three, and the dollar limitations on the overall  value of your benefit package and other applicable restrictions are specified in Parts Four and  Five.    PART ONE – DEFINITIONS  For purposes of this Agreement, the following definitions shall be in effect:  Board means the Company’s Board of Directors.  Change in Control  means a change in control of the Company effected through any of  the following transactions:  (i) a merger, consolidation or other reorganization approved by the  Company’s shareholders, unless securities representing more than fifty percent (50%) of  the total combined voting power of the voting securities of the successor Company are  immediately thereafter beneficially owned, directly or indirectly and in substantially the  same proportion, by the persons who beneficially owned the Company’s outstanding  voting securities immediately prior to such transaction, or  (ii) a shareholder-approved sale, transfer or other disposition of all or  substantially all of the Company’s assets in liquidation or dissolution of the Company, or  (iii) the acquisition, directly or indirectly by any person or related group of  persons (other than the Company or a person that directly or indirectly controls, is  

 

DB2/21688765.1  -2- controlled by, or is under common control with, the Company), of beneficial ownership  (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than  fifty percent (50%) of the total combined voting power of the Company’s outstanding  securities pursuant to a tender or exchange offer made directly to the Company’s  shareholders.  Change in Control Severance Period  means the period commencing with the  Company’s execution of the definitive agreement for a Change in Control transaction and  continuing until the end of the twelve (12)-month period measured from the closing date of that  Change in Control.  Code means the Internal Revenue Code of 1986, as amended.  Common Share means the Company’s common share.  Company means Alpha and Omega Semiconductor Limited, a company incorporated  and existing under the laws of the Islands of Bermuda.  Executive means the undersigned executive.  Good Reason means the Executive’s voluntary resignation within ninety (90) days  following one or more of the following events that occur without the Executive’s written  consent: (A) a material diminution in the Executive’s authority, duties or responsibilities, (B) a  material reduction in his base compensation, with a reduction of fifteen percent (15%) or more to  be deemed material for such purpose, (C) a material relocation of his principal place of  employment, with a relocation that is more than fifty (50) miles from the location of his principal  office in Sunnyvale, California to be deemed material for such purpose, or (D) a material breach  by the Company of any of its obligations under this Agreement; provided, however, that none of  the events specified above shall constitute Good Reason unless the Executive first provides  written notice to the Company describing the applicable event within thirty (30) days following  the occurrence of that event and the Company fails to cure such event within thirty (30) days  after receipt of such written notice.  Involuntary Termination means (i) the Company’s termination of the Executive’s  employment for any reason other than a Termination for Cause or (ii) the Executive’s voluntary  resignation for Good Reason.  1934 Act shall mean the U.S. Securities Exchange Act of 1934, as amended.  Plan means (i) the Company’s 2000 Share Plan, (ii) the Company’s 2009 Share  Option/Share Issuance Plan, as amended or restated from time to time, and (iii) any successor  stock incentive plan subsequently implemented by the Company.  Separation from Service means the Executive’s cessation of Employee status and shall  be deemed to occur at such time as the level of the bona fide services the Executive is to perform  in Employee status (or as a consultant or other independent contractor) permanently decreases to  a level that is not more than twenty percent (20%) of the average level of services the Executive  rendered in Employee status during the immediately preceding thirty-six (36) months (or such  

 

DB2/21688765.1  -3- shorter period for which the Executive may have rendered such service).  Any such  determination as to Separation from Service, however, shall be made in accordance with the  applicable standards of the Treasury Regulations issued under Code Section 409A.  For purposes  of determining whether the Executive has incurred a Separation from Service, the Executive will  be deemed to continue in “Employee” status for so long as he remains in the employ of one or  more members of the Employer Group, subject to the control and direction of the employer  entity as to both the work to be performed and the manner and method of performance.  “Employer Group” means the Company and any other corporation or business controlled by,  controlling or under common control with, the Company as determined in accordance with  Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in  applying Sections 1563(a)(1), (2) and (3) for purposes of determining the controlled group of  corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at  least 80 percent” each place the latter phrase appears in such sections and in applying Section  1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are  under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be  used instead of “at least 80 percent” each place the latter phrase appears in Section 1.414(c)-2 of  the Treasury Regulations.  In addition to the foregoing, a Separation from Service will not be  deemed to have occurred while the Executive is on a sick leave or other bona fide leave of  absence if the period of such leave does not exceed six (6) months or any longer period for which  the Executive is provided with a right to reemployment with the Company by either statute or  contract; provided, however, that in the event of a leave of absence due to any medically  determinable physical or mental impairment that can be expected to result in death or to last for a  continuous period of not less than six (6) months and that causes the Executive to be unable to  perform his duties as an Employee, no Separation from Service shall be deemed to occur during  the first twenty-nine (29) months of such leave.  If the period of leave exceeds six (6) months (or  twenty-nine (29) months in the event of disability as indicated above) and the Executive is not  provided with a right to reemployment by either statute or contract, then the Executive will be  deemed to have Separated from Service on the first day immediately following the expiration of  the applicable six (6)-month or twenty-nine (29)-month period.  Termination for Cause means the termination of the Executive’s employment due to (i)  the commission of any act of fraud, embezzlement or dishonesty by the Executive or his  conviction of a felony, (ii) any unauthorized use or disclosure by the Executive of confidential  information or trade secrets of the Company (or any parent or subsidiary), (iii) any other  misconduct by the Executive adversely affecting the business or affairs of the Company in a  material manner, (iv) the Executive’s failure to cure any breach of his obligations under this  Agreement or his Proprietary Information and Inventions Agreement with the Company after  written notice of such breach from the Company and a reasonable cure period of at least thirty  (30) days or (v) the Executive’s breach of any of his fiduciary duties as an officer or director of  the Company. The foregoing definition shall not be deemed to be inclusive of all the acts or  omissions which the Company (or any parent or subsidiary) may consider as grounds for the  dismissal or discharge of the Executive or any other individual in the service of the Company (or  any parent or subsidiary), but a dismissal for such other acts or omissions shall not constitute a  Termination for Cause for purposes of this Agreement unless otherwise described above.  

 

DB2/21688765.1  -4- PART TWO – NORMAL SEVERANCE BENEFITS  1. Entitlement.  Should the Company terminate the Executive’s employment (other  than a Termination for Cause) at any time other than during the Change in Control Severance  Period, then the Executive shall become entitled to receive the payments and benefits set forth in  Paragraph 2, subject to the Executive’s compliance with the following requirement:    The Executive shall, within twenty-one (21) days (or such longer period as required  by law) following the date of such Involuntary Termination execute and deliver to the  Company a general release (“Release”) in the form attached hereto as Exhibit A  which becomes effective in accordance with applicable law following the expiration  of the applicable revocation period.  This requirement shall hereinafter be referred to  as the “Release Condition”.  The payments and benefits provided under this Part Two shall be in lieu of any other  severance benefits to which the Executive might otherwise, by reason of the termination of the  Executive’s employment, be entitled under any other severance plan, program or arrangement of  the Company.  2. Severance Payments.  The severance payments and benefits which the Executive  shall receive under this Part Two shall consist of the following:  A. Salary Continuation Payments .  The Executive shall be eligible to  receive continued payment of the Executive’s then-current base salary for a period of six (6)-  month.  The first such payment shall be made on the sixtieth (60th) day following the date of the  Executive’s Separation from Service provided the Release is effective, and subsequent payments  will be made in accordance with the Company’s normal payroll schedule for salaried employees.   Such cash payments shall be treated as a right to a series of separate payments for purposes of  Section 409A of the Code.    B. Health Care Coverage .  Provided the Executive and his or her spouse  and eligible dependents elect to continue medical care coverage under the Company’s group  health care plans pursuant to the applicable COBRA provisions, the Company shall provide  continued medical care coverage for the Executive, his or her spouse and eligible dependents  until the earlier of (i) the expiration of the six (6)-month period measured from the first day of  the calendar month following the calendar month in which the Executive’s Involuntary  Termination occurs or (ii) the first date on which the Executive and the Executive’s eligible  dependents are covered under another employer’s health benefit program without exclusion for  any pre-existing medical condition.  Any additional medical care coverage to which the  Executive and the Executive’s spouse and dependents may be entitled under COBRA following  the period of such Company-paid coverage shall be at the Executive’s sole cost and expense.   During the period the Company-provided medical care coverage remains in effect hereunder, the  following provisions shall govern the arrangement: (a) the amount of such benefits in any one  calendar year of such coverage shall not affect the amount of benefits in any other calendar year  for which such benefits are to be provided hereunder and (b) the Executive’s right to the benefits  cannot be liquidated or exchanged for any other benefit.  

 

DB2/21688765.1  -5- C. No Vesting Accelera tion.  All vesting of the Executive’s outstanding  options and other equity awards granted under the Plan shall cease at the time of the Executive’s  termination, and the Executive shall not have more than the period of time specified in the  applicable option agreement in which to exercise those outstanding options following such  termination for any Common Shares which are vested and exercisable at the time of such  termination.  PART THREE - CHANGE IN CONTROL SEVERANCE BENEFITS  3. Entitlement.  Should the Executive’s employment terminate by reason of an  Involuntary Termination within the Change in Control Severance Period, then the Executive  shall become entitled to receive the payments and benefits set forth in Paragraph 4, subject to the  Executive’s compliance with the Release Condition.   The payments and benefits provided under this Part Three shall be in lieu of any other  severance benefits to which the Executive might otherwise, by reason of the termination of the  Executive’s employment during the Change in Control Severance Period, be entitled under any  other severance plan, program or arrangement of the Company.  4. Severance Payments.  The severance payments and benefits which the Executive  shall receive under this Part Three shall consist of the following:  A. Salary Continuation Payments .  The Executive shall be eligible to  receive continued payment of the Executive’s then-current base salary for a period of six (6)  months.  The first such payment shall be made on the sixtieth (60th) day following the date of  the Executive’s Separation from Service provided the Release is effective, and subsequent  payments will be made in accordance with the Company’s normal payroll schedule for salaried  employees.  Such cash payments shall be treated as a right to a series of separate payments for  purposes of Section 409A of the Code.    B. Health Care Coverage .  Provided the Executive and his or her spouse  and eligible dependents elect to continue medical care coverage under the Company’s group  health care plans pursuant to the applicable COBRA provisions, the Company shall provide  continued medical care coverage for the Executive, his or her spouse and eligible dependents  until the earlier of (i) the expiration of the six (6)-month period measured from the first day of  the calendar month following the calendar month in which the Executive’s Involuntary  Termination occurs or (ii) the first date on which the Executive and the Executive’s eligible  dependents are covered under another employer’s health benefit program without exclusion for  any pre-existing medical condition.  Any additional medical care coverage to which the  Executive and the Executive’s spouse and dependents may be entitled under COBRA following  the period of such Company-paid coverage shall be at the Executive’s sole cost and expense.   During the period the Company-provided medical care coverage remains in effect hereunder, the  following provisions shall govern the arrangement: (a) the amount of such benefits in any one  calendar year of such coverage shall not affect the amount of benefits in any other calendar year  for which such benefits are to be provided hereunder and (b) the Executive’s right to the benefits  cannot be liquidated or exchanged for any other benefit.  

 

DB2/21688765.1  -6- C. Accelerated Vesting.  Each outstanding option and other equity award  granted under the Plan held by the Executive at the time of the Executive’s Involuntary  Termination shall immediately vest with respect to the number of additional Common Shares  that would have vested had the Executive continued in employment with the Company for an  additional period of one (1) year following the Involuntary Termination.  The Executive shall not  have more than the period of time specified in the applicable option agreement in which to  exercise those outstanding options following such Involuntary Termination for any Common  Shares which are vested and exercisable at the time of such termination, including any shares  which become vested as a result of this Paragraph 4C.    PART FOUR - LIMITATION ON BENEFITS  5. No Duplication of Benefits .  In no event shall the Executive be entitled to  severance benefits under both Parts Two and Three of this Agreement.  6. Benefit Limit.  The benefit limitations of this Part Four shall be applicable in the  event the Executive receives any benefits under this Agreement which are deemed to constitute  parachute payments under Code Section 280G.   In the event that any payments to which the Executive becomes entitled in  accordance with the provisions of this Agreement would otherwise constitute a parachute  payment under Code Section 280G, then such payments will be subject to reduction to the extent  necessary to assure that the Executive receives only the greater of (i) the amount of those  payments which would not constitute such a parachute payment or (ii) the amount which yields  the Executive the greatest after-tax amount of benefits after taking into account any excise tax  imposed on the payments provided to the Executive under this Agreement (or on any other  benefits to which the Executive may be entitled in connection with any change in control or  ownership of the Company or the subsequent termination of the Executive’s employment with  the Company) under Code Section 4999.  Should a reduction in benefits be required to satisfy the benefit limit of this  Section 6, then the salary continuation payments shall accordingly be reduced to the extent  necessary to comply with such benefit limit.  Should such benefit limit still be exceeded  following such reduction, then the number of shares which would otherwise vest under the  vesting-accelerated portion  (if any) of each equity award (based on the amount of the parachute  payment attributable to such equity award under Code Section 280G) shall be reduced to the  extent necessary to eliminate such excess.  7. Restrictive Covenants.  For the entire period during which the Executive is  entitled to severance payments under Part Two or Part Three of this Agreement, the Executive  shall not:  (i) anywhere in the United States render any services  or provide any advice, assistance or support to any Competing Business, whether as an  employee, agent, representative, consultant, partner, officer, director or stockholder or in  any other capacity; provided, however, that such restriction shall not apply to any passive  investment representing an interest of less than five percent (5%) of an outstanding class  

 

DB2/21688765.1  -7- of publicly-traded securities of any corporation or other enterprise which may constitute a  Competing Business hereunder;   (ii) contact, solicit or call upon any customer or  supplier of the Company on behalf of any person or entity other than the Company for the  purpose of selling any products or providing or performing any services of the type  normally sold, provided or performed by the Company;   (iii) induce or attempt to induce any person or entity to  curtail or cancel any business or contracts which such person or entity has with the  Company; or   (iv) encourage or solicit any of the Company’s  employees to leave the Company’s employ for any reason or interfere in any other  manner with employment relationships at the time existing between the Company and its  employees.  For purposes of this Agreement, a Competing Business means any business which is or,  to the best of the Executive’s knowledge, is expected to become, competitive with the business  or any contemplated business of the Company, or any direct or indirect subsidiaries of the  Company or any of their affiliates.  8. Cessation of Benefits.  In the event of a material breach by the Executive of any  of the Executive’s obligations under Paragraph 7 of this Agreement or any of the Executive’s  obligations under the Executive’s Proprietary Information and Inventions Agreement with the  Company, the Executive shall cease to be entitled to any further payments or benefits under Part  Two or Part Three of this Agreement.   PART FIVE -MISCELLANEOUS PROVISIONS  9. Section 409A.    A. It is the intention of the parties that the provisions of this Agreement  comply with the requirements of Section 409A of the Code and the Treasury Regulations  thereunder.  Accordingly, to the extent there is any ambiguity as to whether one or more  provisions of this Agreement would otherwise contravene the applicable requirements or  limitations of Code Section 409A, then those provisions shall be interpreted and applied in a  manner that does not result in a violation of the applicable requirements or limitations of Code  Section 409A and the Treasury Regulations thereunder.  In no event may Executive, directly or  indirectly, designate the calendar year of a payment.    B. Notwithstanding any provision to the contrary in this Agreement (other  than Section 6(C) below), no payments or benefits to which the Executive becomes entitled  under Part Two of this Agreement shall be made or paid to the Executive prior to the earlier of  (A) the expiration of the 6-month period measured from the date of his or her Separation from  Service or (B) the date of the Executive’s death, if the Executive is deemed at the time of such  Separation from Service a “specified employee” within the meaning of that term under Section  409A of the code and the Treasury Regulation s thereunder and such delayed commencement is  

 

DB2/21688765.1  -8- otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).   Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments  deferred pursuant to this Section 6(B)shall be paid in a lump sum to the Executive, and any  remaining payments due under this Agreement shall be paid in accordance with the normal  payment dates specified for them herein.     10. Employment at Will .  The Executive’s employment with the Company shall  remain at will.  Nothing in this Agreement is intended to provide the Executive with any right to  continue in the employ of the Company (or any affiliate) for any period of specific duration or  interfere with or otherwise restrict in any way the rights of the Company (or any affiliate) or the  Executive, which rights are hereby expressly reserved by each, to terminate the Executive’s  employment at any time for any reason or for no reason.  11. Other Termination.  The Executive shall not be entitled to receive any severance  payments or benefits if there is a Termination for Cause or his employment with the Company  ends due to death, disability, retirement or voluntary termination (other than as specified in Part  Three).  Upon any such termination, the Company shall only be required to pay the Executive (i)  any unpaid compensation earned for services rendered through the date of such termination and  (ii) the value of any accrued but unpaid vacation benefits or sick days, and no benefits will be  payable under Part Two or Part Three of this Agreement.  In addition, all vesting in the  Executive’s outstanding options and other equity awards, if any, shall cease at the time of such  termination, and the Executive shall not have more than the period of time specified in the  applicable option agreement for each option in which to exercise that option following such  termination of employment for the Company’s Common Shares which are vested and exercisable  at the time of such termination.  12. Successors and Assigns .  The provisions of this Agreement shall inure to the  benefit of, and shall be binding upon, (i) the Company and its successors and assigns, including  any successor entity by merger, consolidation or transfer of all or substantially all of the  Company’s assets (whether or not such transaction constitutes a Change in Control), and (ii) the  Executive, the personal representative of the Executive’s estate and the Executive’s heirs and  legatees.  13. General Creditor Status .  The benefits to which the Executive may become  entitled under Part Two or Part Three of this Agreement shall be paid, when due, from the  Company’s general assets, and no trust fund, escrow arrangement or other segregated account  shall be established as a funding vehicle for such payments.  Accordingly, the Executive’s right  (or the right of the executors or administrators of the Executive’s estate) to receive such benefits  shall at all times be that of a general creditor of the Company and shall have no priority over the  claims of other general creditors.  14. Governing Documents.  This Agreement, together with (i) the agreements  evidencing the Executive’s currently outstanding options and any future option grants or other  equity awards under the Plan and (ii) the Executive’s existing Proprietary Information and  Inventions Agreement, shall constitute the entire agreement and understanding of the Company  and the Executive with respect to the payment of severance benefits to the Executive and shall  supersede all prior and contemporaneous written or verbal agreements and understandings  

 

DB2/21688765.1  -9- between the Executive and the Company relating to such subject matter.  This Agreement may  only be amended by a written instrument signed by the Executive and an authorized officer of  the Company.  Any and all prior agreements, understandings or representations relating to the  Executive’s severance benefits, other than (i) the agreements evidencing the Executive’s  currently outstanding options under the Plan and (ii) the Executive’s existing Proprietary  Information and Inventions Agreement, are hereby terminated and cancelled in their entirety and  are of no further force or effect.  15. Governing Law.  The provisions of this Agreement shall be construed and  interpreted under the laws of the State of California applicable to agreements executed and  wholly performed within the State of California.  If any provision of this Agreement as applied  to any party or to any circumstance should be adjudged by a court of competent jurisdiction to be  void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to  the maximum extent permissible by law) the application of such provision under circumstances  different from those adjudicated by the court, the application of any other provision of this  Agreement, or the enforceability or invalidity of this Agreement as a whole.  Should any  provision of this Agreement become or be deemed invalid, illegal or unenforceable in any  jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall  be deemed amended to the extent necessary to conform to applicable law so as to be valid and  enforceable or, if such provision cannot be so amended without materially altering the intention  of the parties, then such provision will be stricken, and the remainder of this Agreement shall  continue in full force and effect.  16. Arbitration.  A. Each party agrees that any and all disputes which arise out of or relate to  the Executive’s employment, the termination of the Executive’s employment or the terms of this  Agreement shall be resolved through final and binding arbitration.  Such arbitration shall be in  lieu of any trial before a judge and/or ju ry, and the Executive and Company express ly  waive all rights to  have such disp utes resolved through trial before a judge and/or jury.    Such disputes shall include, without limitation, claims for breach of contract or of the covenant  of good faith and fair dealing, claims of discrimination, claims under any federal, state or local  law or regulation now in existence or hereinafter enacted and as amended from time to time  concerning in any way the subject of the Executive’s employment with the Company or its  termination.   B. Arbitration shall be held in Santa Clara County, California and conducted  in accordance with the National Rules for the Resolution of Employment Disputes of the  American Arbitration Association (“AAA Rules”), provided, however, that the arbitrator shall  allow the discovery authorized by California Code of Civil Procedure section 1282, et seq., or  any other discovery required by applicable law in arbitration proceedings.  To the extent that any  of the AAA Rules conflict with applicable law, the arbitration procedures required by applicable  law shall govern.   C. During the course of the arbitration, the Company will pay the arbitrator’s  fee and any other type of expense or cost that the Executive would not otherwise be required to  bear if he were free to bring the dispute or claim in court and any other expense or cost that is  

 

DB2/21688765.1  -10- unique to arbitration.  The Company and the Executive shall each bear its or his own respective  attorneys’ fees incurred in connection with the arbitration.  D. The arbitrator shall issue a written award that sets forth the essential  findings of fact and conclusions of law on which the award is based.  The arbitrator shall have  the authority to award any relief authorized by law in connection with the asserted claims or  disputes.  The arbitrator’s award shall be subject to correction, confirmation, or vacation, as  provided by applicable law setting forth the standard of judicial review of arbitration awards.  Judgment upon the arbitrator’s award may be entered in any court having jurisdiction thereof.  17. Legal Representation.  The Executive acknowledges that he has had the right to  consult with counsel and is fully aware of his rights and obligations under this Agreement.  18. Counterparts.  This Agreement may be executed in more than one counterpart,  each of which shall be deemed an original, but all of which together shall constitute but one and  the same instrument.      

 

 

 

DB2/21688765.1   EXHIBIT A    FORM OF GENERAL RELEASE    THIS DOCUMENT IS INTENDED AS A FORM OF THE GENERAL SETTLEMENT AND  RELEASE.  PURSUANT TO PARAGRAPH 1 AND PARAGRAPH 3 OF THE LETTER  AGREEMENT, EXECUTION OF A RELEASE, IN SUBSTANTIALLY THE SAME FORM  AS THIS EXHIBIT A IS A CONDITION FOR EXECUTIVE’S RECEIPT OF CERTAIN  BENEFITS PURSUANT TO PARAGRAPH 2 AND PARAGRAPH 4. THE FORM MUST BE  FINALIZED BY ALPHA AND OMEGA SEMICONDUCTOR LIMITED PRIOR TO  EXECUTION.  

 

DB2/21688765.1  -2-   GENERAL SETTLEMENT AND RELEASE AGREEMENT   This General Settlement and Release Agreement (the “Agreement”) is by and between  Alpha ad Omega Semiconductor Limited, for itself and for all of its affiliated, related, parent and  direct and indirect subsidiary companies, joint venturers and partnerships, successors and  permitted assigns and each of them (collectively, “AOS”), on the one hand, and  __________________, for himself, and his agents, representatives, heirs and assigns  (“Executive”), on the other hand.  1. Payments. In full and complete consideration for Executive’s promises and  undertaking set forth in this Agreement, following the eighth (8th) day following receipt by AOS  of a fully executed Settlement and Release Agreement from Executive, AOS will provide  Executive the consideration, if any, to which Executive is entitled pursuant to the  Letter  Agreement between the parties, dated ________, 2010, at the times specified in Paragraph 2 or  Paragraph 4 (as applicable) of that Agreement unless the signature on this Agreement is revoked  pursuant to Paragraph 7 below.  2. Release of Known and Unknown Claims.  (a) It is understood and agreed by the parties to this Agreement that in consideration  of the mutual promises and covenants contained in this Agreement, and after consultation with  counsel, Executive irrevocably and unconditionally releases and forever discharges AOS and  each of the other Released Parties from any and all causes of action, claims, actions, rights,  judgments, obligations, damages, demands, accountings or liabilities of whatever kind or  character, which Executive may have against AOS or any of the Released Parties, or any of  them, by reason of or arising out of, touching upon or concerning Executive’s employment,  separation of his employment and reapplication for employment with AOS, or any statutory  claims, or any and all other matters of whatever kind, nature or description, whether known or  unknown, occurring prior to the date of the execution of this Agreement.  Executive  acknowledges that this release of claims specifically includes, but is not limited to, any and all  claims for fraud; breach of contract; breach of the implied covenant of good faith and fair  dealing; inducement of breach; interference with contractual rights; wrongful or unlawful  discharge or demotion; violation of public policy; sexual assault and battery; invasion of privacy;  intentional or negligent infliction of emotional distress; intentional or negligent  misrepresentation; conspiracy; defamation; unlawful effort to prevent employment;  discrimination or harassment on the basis of age, race, color, sex, national origin, ancestry,  religion, disability, handicap, medical condition or marital status; any claim under: Title VII,  ADA, ADEA OWBPA, FMLA, COBRA, OSHA, ERISA, IRC, FEHA, CalOsha, or any other  wrongful conduct, based upon events occurring prior to the date that this Agreement is executed  by Executive. Notwithstanding anything to the contrary herein, this Agreement shall not release  Executive’s  right, if any,  to indemnification pursuant to the Company’s Bylaws or insurance  policies, for any claims arising out of Executive’s conduct as an employee or officer of the  Company during his employment.    

 

DB2/21688765.1  -3- (b) Executive represents and warrants that he has not assigned or subrogated any of  his rights, claims or causes of action, including any claims referenced in this Agreement, or  authorized any other person or entity to assert such claims on his behalf, and he agrees to  indemnify and hold harmless AOS and each of the Released Parties against any assignment of  said rights, claims and/or causes of action.  3. Waiver of Unknown Claims.  (a) Executive does hereby expressly waive and relinquish all rights and benefits  afforded to him under law, and does so understanding and acknowledging the significance and  consequences of such a waiver.  (b) Releases of Unknown Claims/Waiver of Civil Code Section 1542 . The parties  agree that this Agreement is a full and final release of any and all claims and Executive expressly  waives the benefit of Section 1542 of the California Civil Code, which provides:  “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE  CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME  OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR”  (c) Executive acknowledges and understands that he is being represented in this  matter by counsel, and acknowledges that he is not required to release unknown claims but that  he expressly acknowledges and agrees that this Agreement is also intended to include in its  effect, without limitation, all such claims which he does not know or suspect to exist at the time  of the execution of this Agreement, and that this Agreement contemplates the extinguishment of  those claims.  (d) Executive acknowledges and agrees that he may later discover facts different from or in  addition to those he now knows or believes to be true in entering into this Agreement.  Executive agrees  to assume the risk of the possible discovery of additional or different facts, including facts which may  have been concealed or hidden, and agrees that this Agreement shall remain effective regardless of such  additional or different facts.  Executive further acknowledges and agrees that neither AOS nor any of the  other Released Parties had any duty to disclose any fact to him prior to the execution of this Agreement.  4. Non-Admission of Liability .  Executive expressly recognizes that this Agreement shall  not in any way be construed as an admission by AOS or any of the other Released Parties of any  unlawful or wrongful acts whatsoever against Executive or any other person or entity.  AOS and  each of the Released Parties expressly denies any violation of any policy or procedure, or of any  state or federal law or regulation.  AOS and each of the Released Parties also specifically denies  any liability to or wrongful acts against Executive, or any other person, on the part of themselves  or any other employees or agents of AOS.  This Agreement shall not be admissible in any  proceeding as evidence of or any admission by AOS of any violation of any law or regulation or  wrongful act.  This Agreement may, however, be introduced in any proceeding to enforce this  Agreement.  5. No Filing of Claims .  Executive specifically represents that he has no pending  complaints or charges against AOS or any of the other Released Parties with any state or federal  

 

DB2/21688765.1  -4- court or any local, state or federal agency, division or department based on any events occurring  prior to the date of execution of this Agreement.  6. Advice of Counsel .  Executive acknowledges that he has been given twenty-one days  (21) to seek the advice of counsel and to consider the effects of this Agreement upon his legal  rights (the “Consideration Period”).  To the extent that Executive has signed the Agreement  without obtaining the advice of counsel or before expiration of the Consideration Period,  Executive acknowledges that he has done so voluntarily with a full understanding of the  Agreement and its effect upon his legal rights.  Any discussion between Executive and AOS or  any of the Released Parties concerning the terms and conditions of this Agreement does not  extend the Consideration Period.  7. Revocation Period.  Executive acknowledges that he has been informed that, after he  signs this Agreement, he has the right to revoke his signature for a period of seven days (7) from  the date that he signs the Agreement.  To be effective, the revocation must be in writing, signed  by Executive, and delivered to Vice President of Human Resources at 475 Oakmead Parkway,  Sunnyvale, California 94085 before the close of business on the seventh day (7th) day following  the date Executive signs this Agreement.  Executive acknowledges and agrees that AOS has no  obligation to comply with the terms of this Agreement until the Revocation Period has expired  without revocation.  8. Confidentiality.  Executive consents and agrees that he will not, at any time, disclose the  existence of this Agreement, the terms of his severance benefits and/or the alleged facts or  circumstances giving rise to any actual or alleged claims or the Action to any person, firm,  Company, association, or entity or the press or media for any reason or purpose whatsoever,  other than to his attorney, his immediate family and to his accountant or financial advisor for tax  purposes.  If Executive is served with any subpoena, court order, or other legal process seeking  disclosure of any such information, Executive shall promptly send to AOS, within forty-eight  (48) hours, via facsimile at (408) 830 9749, such subpoena, court order, or other legal process so  that AOS may exercise any applicable legal remedies.  Executive agrees and acknowledges that a  violation of this paragraph by Executive shall be a material breach of this Agreement.  9. Delivery of Documents.  Executive represents and warrants that he has not removed any  documents, records or other information, including any such documents, records or information  that are or were electronically stored, from the premises of AOS. Executive acknowledges that  such documents, records and other information are the exclusive property of AOS or its  subsidiaries or affiliates.  10. Remedies For Breach Of This Agreement.  (a) Injunctive Relief.  In the event of a breach of the provisions of this Agreement,  Executive agrees that any remedy at law for any breach or threatened breach of the provisions of  such paragraphs and the covenants set forth therein, will be inadequate and, accordingly, each  party hereby stipulates that the other is entitled to obtain injunctive relief for any such breaches  or threatened breaches (without the necessity of posting a bond).  The injunctive relief provided  for in this paragraph is in addition to, and is not in limitation of, any and all other remedies at law  or in equity otherwise available to the applicable party.  

 

DB2/21688765.1  -5- (b) Remedies Cumulative.  The remedies in this paragraph are not exclusive, and the  parties shall have the right to pursue any other legal or equitable remedies to enforce the terms of  this Agreement.  (c) Governing Law; Consent to Jurisdiction.  This Agreement shall be deemed to  be a contract made under, and shall be construed in accordance with, the laws of the State of  California, without giving effect to conflict of laws principles thereof.  All questions concerning  the construction, validity, and interpretation of this Agreement shall be governed by and  construed in accordance with the domestic laws of the State of California, without giving effect  to any choice of law or conflict of law provision that would cause the application of the laws of  any jurisdiction other than the State of California.  Each of the parties hereby irrevocably and  unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of  California or the United States District Court for the Northern District of California for any  litigation, proceeding or action arising out of or relating to this Agreement  (and agrees not to  commence any litigation, proceeding or action relating thereto except in such courts).  Each of  the parties hereby irrevocably and unconditionally waives any objection to the laying of venue of  any litigation, proceeding or action arising out of this agreement or thereby in the courts of the  State of California or the United States District Court for the Northern District of California and  hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any  such court that any such litigation, proceeding or action brought in any such court has been  brought in an inconvenient forum.  11. Counsel.  The parties hereby acknowledge that they have had the reasonable opportunity  to consult with attorneys of their own choice concerning the terms and conditions of this  Agreement, that they have read and understand this Agreement, that they are fully aware of the  contents of this Agreement and that they enter into this agreement freely and knowingly and with  a full understanding of its legal effect.  12. Entire Agreement.  This is the entire agreement between Executive and AOS with  respect to the subject matter hereof and the Agreement supersedes any previous negotiations,  agreements and understandings.  Executive acknowledges that he has not relied on any oral or  written representations by AOS (or its counsel) or any of the other Released Parties to induce  him to sign this Agreement, other than the terms of this Agreement.  No modifications of this  Agreement can be made except in writing signed by Executive and AOS.  13. Severability.  If any provision of this Agreement is held to be illegal, invalid or  unenforceable under existing or future laws effective during the term of this Agreement, such  provisions shall be fully several, the Agreement shall be construed and enforced as if such  illegal, invalid or unenforceable provision had never comprised a part of this Agreement, and the  remaining provisions of this Agreement shall remain in full force and effect and shall not be  affected by the illegal, invalid or unenforceable provision or by its severance from this  Agreement.  Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall  be added automatically as part of this Agreement a provision as similar in terms to such illegal,  invalid or unenforceable provision as may be possible and be legal, valid and enforceable.  14. Ambiguities.  Attorneys for both parties have participated in the negotiation of this  Agreement and, thus, it is understood and agreed that the general rule that ambiguities are to be  

 

DB2/21688765.1  -6- construed against the drafter shall not apply to this Agreement.  In the event that any language of  this Agreement is found to be ambiguous, each party shall have an opportunity to present  evidence as to the actual intent of the parties with respect to any such ambiguous language.  15. Waiver.  No waiver by any party of any breach of any term or provision of this  Agreement shall be a waiver of any preceding, concurrent or succeeding breach of this  Agreement or of any other term or provision of this Agreement.  No waiver shall be binding on  the part of, or on behalf of, any other party entering into this Agreement.  16. Counterparts.  This Agreement may be executed in one or more counterparts, each of  which shall be deemed an original, all of which together shall constitute one and the same  instrument,  THE SIGNATORIES HAVE CAREFULLY READ THIS ENTIRE  AGREEMENT.  ITS CONTENTS HAVE BEEN FULLY EXPLAINED TO  THEM BY THEIR ATTORNEYS.  THE SIGNATORIES FULLY  UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS  AGREEMENT.  THE ONLY PROMISES MADE TO ANY SIGNATORY  ABOUT THIS AGREEMENT, AND TO SIGN THIS AGREEMENT, ARE  CONTAINED IN THIS AGREEMENT.  THE SIGNATORIES ARE SIGNING  THIS AGREEMENT VOLUNTARILY.    PLEASE READ CAREFULLY.  THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE  INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS 

 

DB2/21688765.1   IN WITNESS WHEREOF , the parties have executed this General Settlement and Release  Agreement on the dates set forth below.       ALPHA AND OMEGA  SEMICONDUCTOR LIMITED:           DATE:             EXECUTIVE:             DATE:a102yueh-seho

DB2/21688780.1   ALPHA AND OMEGA SEMICONDUCTOR LIMITED              Exhibit 10.2 April 28, 2010    Dr. Yueh-Se Ho  c/o Alpha and Omega Semiconductor Incorporated  475 Oakmead Parkway  Sunnyvale, California 94085     Dear Yueh-Se:  We are pleased to inform you that the Company's Board of Directors has approved a new  severance benefit program for you.  The purpose of this letter agreement is to set forth the terms  and conditions of your severance benefits and to explain certain limitations that may govern their  overall value or payment.  Your severance package will become payable should your employment terminate under  certain circumstances prior to or following certain changes in ownership or control of the  Company.  To understand the full scope of your benefits, you should familiarize yourself with  the definitional provisions of Part One of this letter agreement.  The benefits comprising your  severance package are detailed in Parts Two and Three, and the dollar limitations on the overall  value of your benefit package and other applicable restrictions are specified in Parts Four and  Five.    PART ONE – DEFINITIONS  For purposes of this Agreement, the following definitions shall be in effect:  Board means the Company’s Board of Directors.  Change in Control  means a change in control of the Company effected through any of  the following transactions:  (i) a merger, consolidation or other reorganization approved by the  Company’s shareholders, unless securities representing more than fifty percent (50%) of  the total combined voting power of the voting securities of the successor Company are  immediately thereafter beneficially owned, directly or indirectly and in substantially the  same proportion, by the persons who beneficially owned the Company’s outstanding  voting securities immediately prior to such transaction, or  (ii) a shareholder-approved sale, transfer or other disposition of all or  substantially all of the Company’s assets in liquidation or dissolution of the Company, or  (iii) the acquisition, directly or indirectly by any person or related group of  persons (other than the Company or a person that directly or indirectly controls, is  

 

DB2/21688780.1  -2- controlled by, or is under common control with, the Company), of beneficial ownership  (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than  fifty percent (50%) of the total combined voting power of the Company’s outstanding  securities pursuant to a tender or exchange offer made directly to the Company’s  shareholders.  Change in Control Severance Period  means the period commencing with the  Company’s execution of the definitive agreement for a Change in Control transaction and  continuing until the end of the twelve (12)-month period measured from the closing date of that  Change in Control.  Code means the Internal Revenue Code of 1986, as amended.  Common Share means the Company’s common share.  Company means Alpha and Omega Semiconductor Limited, a company incorporated  and existing under the laws of the Islands of Bermuda.  Executive means the undersigned executive.  Good Reason means the Executive’s voluntary resignation within ninety (90) days  following one or more of the following events that occur without the Executive’s written  consent: (A) a material diminution in the Executive’s authority, duties or responsibilities, (B) a  material reduction in his base compensation, with a reduction of fifteen percent (15%) or more to  be deemed material for such purpose, (C) a material relocation of his principal place of  employment, with a relocation that is more than fifty (50) miles from the location of his principal  office in Sunnyvale, California to be deemed material for such purpose, or (D) a material breach  by the Company of any of its obligations under this Agreement; provided, however, that none of  the events specified above shall constitute Good Reason unless the Executive first provides  written notice to the Company describing the applicable event within thirty (30) days following  the occurrence of that event and the Company fails to cure such event within thirty (30) days  after receipt of such written notice.  Involuntary Termination means (i) the Company’s termination of the Executive’s  employment for any reason other than a Termination for Cause or (ii) the Executive’s voluntary  resignation for Good Reason.  1934 Act shall mean the U.S. Securities Exchange Act of 1934, as amended.  Plan means (i) the Company’s 2000 Share Plan, (ii) the Company’s 2009 Share  Option/Share Issuance Plan, as amended or restated from time to time, and (iii) any successor  stock incentive plan subsequently implemented by the Company.  Separation from Service means the Executive’s cessation of Employee status and shall  be deemed to occur at such time as the level of the bona fide services the Executive is to perform  in Employee status (or as a consultant or other independent contractor) permanently decreases to  a level that is not more than twenty percent (20%) of the average level of services the Executive  rendered in Employee status during the immediately preceding thirty-six (36) months (or such  

 

DB2/21688780.1  -3- shorter period for which the Executive may have rendered such service).  Any such  determination as to Separation from Service, however, shall be made in accordance with the  applicable standards of the Treasury Regulations issued under Code Section 409A.  For purposes  of determining whether the Executive has incurred a Separation from Service, the Executive will  be deemed to continue in “Employee” status for so long as he remains in the employ of one or  more members of the Employer Group, subject to the control and direction of the employer  entity as to both the work to be performed and the manner and method of performance.  “Employer Group” means the Company and any other corporation or business controlled by,  controlling or under common control with, the Company as determined in accordance with  Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in  applying Sections 1563(a)(1), (2) and (3) for purposes of determining the controlled group of  corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at  least 80 percent” each place the latter phrase appears in such sections and in applying Section  1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are  under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be  used instead of “at least 80 percent” each place the latter phrase appears in Section 1.414(c)-2 of  the Treasury Regulations.  In addition to the foregoing, a Separation from Service will not be  deemed to have occurred while the Executive is on a sick leave or other bona fide leave of  absence if the period of such leave does not exceed six (6) months or any longer period for which  the Executive is provided with a right to reemployment with the Company by either statute or  contract; provided, however, that in the event of a leave of absence due to any medically  determinable physical or mental impairment that can be expected to result in death or to last for a  continuous period of not less than six (6) months and that causes the Executive to be unable to  perform his duties as an Employee, no Separation from Service shall be deemed to occur during  the first twenty-nine (29) months of such leave.  If the period of leave exceeds six (6) months (or  twenty-nine (29) months in the event of disability as indicated above) and the Executive is not  provided with a right to reemployment by either statute or contract, then the Executive will be  deemed to have Separated from Service on the first day immediately following the expiration of  the applicable six (6)-month or twenty-nine (29)-month period.  Termination for Cause means the termination of the Executive’s employment due to (i)  the commission of any act of fraud, embezzlement or dishonesty by the Executive or his  conviction of a felony, (ii) any unauthorized use or disclosure by the Executive of confidential  information or trade secrets of the Company (or any parent or subsidiary), (iii) any other  misconduct by the Executive adversely affecting the business or affairs of the Company in a  material manner, (iv) the Executive’s failure to cure any breach of his obligations under this  Agreement or his Proprietary Information and Inventions Agreement with the Company after  written notice of such breach from the Company and a reasonable cure period of at least thirty  (30) days or (v) the Executive’s breach of any of his fiduciary duties as an officer or director of  the Company. The foregoing definition shall not be deemed to be inclusive of all the acts or  omissions which the Company (or any parent or subsidiary) may consider as grounds for the  dismissal or discharge of the Executive or any other individual in the service of the Company (or  any parent or subsidiary), but a dismissal for such other acts or omissions shall not constitute a  Termination for Cause for purposes of this Agreement unless otherwise described above.  

 

DB2/21688780.1  -4- PART TWO – NORMAL SEVERANCE BENEFITS  1. Entitlement.  Should the Company terminate the Executive’s employment (other  than a Termination for Cause) at any time other than during the Change in Control Severance  Period, then the Executive shall become entitled to receive the payments and benefits set forth in  Paragraph 2, subject to the Executive’s compliance with the following requirement:    The Executive shall, within twenty-one (21) days (or such longer period as required  by law) following the date of such Involuntary Termination execute and deliver to the  Company a general release (“Release”) in the form attached hereto as Exhibit A  which becomes effective in accordance with applicable law following the expiration  of the applicable revocation period.  This requirement shall hereinafter be referred to  as the “Release Condition”.  The payments and benefits provided under this Part Two shall be in lieu of any other  severance benefits to which the Executive might otherwise, by reason of the termination of the  Executive’s employment, be entitled under any other severance plan, program or arrangement of  the Company.  2. Severance Payments.  The severance payments and benefits which the Executive  shall receive under this Part Two shall consist of the following:  A. Salary Continuation Payments .  The Executive shall be eligible to  receive continued payment of the Executive’s then-current base salary for a period of six (6)-  month.  The first such payment shall be made on the sixtieth (60th) day following the date of the  Executive’s Separation from Service provided the Release is effective, and subsequent payments  will be made in accordance with the Company’s normal payroll schedule for salaried employees.   Such cash payments shall be treated as a right to a series of separate payments for purposes of  Section 409A of the Code.    B. Health Care Coverage .  Provided the Executive and his or her spouse  and eligible dependents elect to continue medical care coverage under the Company’s group  health care plans pursuant to the applicable COBRA provisions, the Company shall provide  continued medical care coverage for the Executive, his or her spouse and eligible dependents  until the earlier of (i) the expiration of the six (6)-month period measured from the first day of  the calendar month following the calendar month in which the Executive’s Involuntary  Termination occurs or (ii) the first date on which the Executive and the Executive’s eligible  dependents are covered under another employer’s health benefit program without exclusion for  any pre-existing medical condition.  Any additional medical care coverage to which the  Executive and the Executive’s spouse and dependents may be entitled under COBRA following  the period of such Company-paid coverage shall be at the Executive’s sole cost and expense.   During the period the Company-provided medical care coverage remains in effect hereunder, the  following provisions shall govern the arrangement: (a) the amount of such benefits in any one  calendar year of such coverage shall not affect the amount of benefits in any other calendar year  for which such benefits are to be provided hereunder and (b) the Executive’s right to the benefits  cannot be liquidated or exchanged for any other benefit.  

 

DB2/21688780.1  -5- C. No Vesting Accelera tion.  All vesting of the Executive’s outstanding  options and other equity awards granted under the Plan shall cease at the time of the Executive’s  termination, and the Executive shall not have more than the period of time specified in the  applicable option agreement in which to exercise those outstanding options following such  termination for any Common Shares which are vested and exercisable at the time of such  termination.  PART THREE - CHANGE IN CONTROL SEVERANCE BENEFITS  3. Entitlement.  Should the Executive’s employment terminate by reason of an  Involuntary Termination within the Change in Control Severance Period, then the Executive  shall become entitled to receive the payments and benefits set forth in Paragraph 4, subject to the  Executive’s compliance with the Release Condition.   The payments and benefits provided under this Part Three shall be in lieu of any other  severance benefits to which the Executive might otherwise, by reason of the termination of the  Executive’s employment during the Change in Control Severance Period, be entitled under any  other severance plan, program or arrangement of the Company.  4. Severance Payments.  The severance payments and benefits which the Executive  shall receive under this Part Three shall consist of the following:  A. Salary Continuation Payments .  The Executive shall be eligible to  receive continued payment of the Executive’s then-current base salary for a period of six (6)  months.  The first such payment shall be made on the sixtieth (60th) day following the date of  the Executive’s Separation from Service provided the Release is effective, and subsequent  payments will be made in accordance with the Company’s normal payroll schedule for salaried  employees.  Such cash payments shall be treated as a right to a series of separate payments for  purposes of Section 409A of the Code.    B. Health Care Coverage .  Provided the Executive and his or her spouse  and eligible dependents elect to continue medical care coverage under the Company’s group  health care plans pursuant to the applicable COBRA provisions, the Company shall provide  continued medical care coverage for the Executive, his or her spouse and eligible dependents  until the earlier of (i) the expiration of the six (6)-month period measured from the first day of  the calendar month following the calendar month in which the Executive’s Involuntary  Termination occurs or (ii) the first date on which the Executive and the Executive’s eligible  dependents are covered under another employer’s health benefit program without exclusion for  any pre-existing medical condition.  Any additional medical care coverage to which the  Executive and the Executive’s spouse and dependents may be entitled under COBRA following  the period of such Company-paid coverage shall be at the Executive’s sole cost and expense.   During the period the Company-provided medical care coverage remains in effect hereunder, the  following provisions shall govern the arrangement: (a) the amount of such benefits in any one  calendar year of such coverage shall not affect the amount of benefits in any other calendar year  for which such benefits are to be provided hereunder and (b) the Executive’s right to the benefits  cannot be liquidated or exchanged for any other benefit.  

 

DB2/21688780.1  -6- C. Accelerated Vesting.  Each outstanding option and other equity award  granted under the Plan held by the Executive at the time of the Executive’s Involuntary  Termination shall immediately vest with respect to the number of additional Common Shares  that would have vested had the Executive continued in employment with the Company for an  additional period of one (1) year following the Involuntary Termination.  The Executive shall not  have more than the period of time specified in the applicable option agreement in which to  exercise those outstanding options following such Involuntary Termination for any Common  Shares which are vested and exercisable at the time of such termination, including any shares  which become vested as a result of this Paragraph 4C.    PART FOUR - LIMITATION ON BENEFITS  5. No Duplication of Benefits .  In no event shall the Executive be entitled to  severance benefits under both Parts Two and Three of this Agreement.  6. Benefit Limit.  The benefit limitations of this Part Four shall be applicable in the  event the Executive receives any benefits under this Agreement which are deemed to constitute  parachute payments under Code Section 280G.   In the event that any payments to which the Executive becomes entitled in  accordance with the provisions of this Agreement would otherwise constitute a parachute  payment under Code Section 280G, then such payments will be subject to reduction to the extent  necessary to assure that the Executive receives only the greater of (i) the amount of those  payments which would not constitute such a parachute payment or (ii) the amount which yields  the Executive the greatest after-tax amount of benefits after taking into account any excise tax  imposed on the payments provided to the Executive under this Agreement (or on any other  benefits to which the Executive may be entitled in connection with any change in control or  ownership of the Company or the subsequent termination of the Executive’s employment with  the Company) under Code Section 4999.  Should a reduction in benefits be required to satisfy the benefit limit of this  Section 6, then the salary continuation payments shall accordingly be reduced to the extent  necessary to comply with such benefit limit.  Should such benefit limit still be exceeded  following such reduction, then the number of shares which would otherwise vest under the  vesting-accelerated portion  (if any) of each equity award (based on the amount of the parachute  payment attributable to such equity award under Code Section 280G) shall be reduced to the  extent necessary to eliminate such excess.  7. Restrictive Covenants.  For the entire period during which the Executive is  entitled to severance payments under Part Two or Part Three of this Agreement, the Executive  shall not:  (i) anywhere in the United States render any services  or provide any advice, assistance or support to any Competing Business, whether as an  employee, agent, representative, consultant, partner, officer, director or stockholder or in  any other capacity; provided, however, that such restriction shall not apply to any passive  investment representing an interest of less than five percent (5%) of an outstanding class  

 

DB2/21688780.1  -7- of publicly-traded securities of any corporation or other enterprise which may constitute a  Competing Business hereunder;   (ii) contact, solicit or call upon any customer or  supplier of the Company on behalf of any person or entity other than the Company for the  purpose of selling any products or providing or performing any services of the type  normally sold, provided or performed by the Company;   (iii) induce or attempt to induce any person or entity to  curtail or cancel any business or contracts which such person or entity has with the  Company; or   (iv) encourage or solicit any of the Company’s  employees to leave the Company’s employ for any reason or interfere in any other  manner with employment relationships at the time existing between the Company and its  employees.  For purposes of this Agreement, a Competing Business means any business which is or,  to the best of the Executive’s knowledge, is expected to become, competitive with the business  or any contemplated business of the Company, or any direct or indirect subsidiaries of the  Company or any of their affiliates.  8. Cessation of Benefits.  In the event of a material breach by the Executive of any  of the Executive’s obligations under Paragraph 7 of this Agreement or any of the Executive’s  obligations under the Executive’s Proprietary Information and Inventions Agreement with the  Company, the Executive shall cease to be entitled to any further payments or benefits under Part  Two or Part Three of this Agreement.   PART FIVE -MISCELLANEOUS PROVISIONS  9. Section 409A.    A. It is the intention of the parties that the provisions of this Agreement  comply with the requirements of Section 409A of the Code and the Treasury Regulations  thereunder.  Accordingly, to the extent there is any ambiguity as to whether one or more  provisions of this Agreement would otherwise contravene the applicable requirements or  limitations of Code Section 409A, then those provisions shall be interpreted and applied in a  manner that does not result in a violation of the applicable requirements or limitations of Code  Section 409A and the Treasury Regulations thereunder.  In no event may Executive, directly or  indirectly, designate the calendar year of a payment.    B. Notwithstanding any provision to the contrary in this Agreement (other  than Section 6(C) below), no payments or benefits to which the Executive becomes entitled  under Part Two of this Agreement shall be made or paid to the Executive prior to the earlier of  (A) the expiration of the 6-month period measured from the date of his or her Separation from  Service or (B) the date of the Executive’s death, if the Executive is deemed at the time of such  Separation from Service a “specified employee” within the meaning of that term under Section  409A of the code and the Treasury Regulation s thereunder and such delayed commencement is  

 

DB2/21688780.1  -8- otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).   Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments  deferred pursuant to this Section 6(B)shall be paid in a lump sum to the Executive, and any  remaining payments due under this Agreement shall be paid in accordance with the normal  payment dates specified for them herein.     10. Employment at Will .  The Executive’s employment with the Company shall  remain at will.  Nothing in this Agreement is intended to provide the Executive with any right to  continue in the employ of the Company (or any affiliate) for any period of specific duration or  interfere with or otherwise restrict in any way the rights of the Company (or any affiliate) or the  Executive, which rights are hereby expressly reserved by each, to terminate the Executive’s  employment at any time for any reason or for no reason.  11. Other Termination.  The Executive shall not be entitled to receive any severance  payments or benefits if there is a Termination for Cause or his employment with the Company  ends due to death, disability, retirement or voluntary termination (other than as specified in Part  Three).  Upon any such termination, the Company shall only be required to pay the Executive (i)  any unpaid compensation earned for services rendered through the date of such termination and  (ii) the value of any accrued but unpaid vacation benefits or sick days, and no benefits will be  payable under Part Two or Part Three of this Agreement.  In addition, all vesting in the  Executive’s outstanding options and other equity awards, if any, shall cease at the time of such  termination, and the Executive shall not have more than the period of time specified in the  applicable option agreement for each option in which to exercise that option following such  termination of employment for the Company’s Common Shares which are vested and exercisable  at the time of such termination.  12. Successors and Assigns .  The provisions of this Agreement shall inure to the  benefit of, and shall be binding upon, (i) the Company and its successors and assigns, including  any successor entity by merger, consolidation or transfer of all or substantially all of the  Company’s assets (whether or not such transaction constitutes a Change in Control), and (ii) the  Executive, the personal representative of the Executive’s estate and the Executive’s heirs and  legatees.  13. General Creditor Status .  The benefits to which the Executive may become  entitled under Part Two or Part Three of this Agreement shall be paid, when due, from the  Company’s general assets, and no trust fund, escrow arrangement or other segregated account  shall be established as a funding vehicle for such payments.  Accordingly, the Executive’s right  (or the right of the executors or administrators of the Executive’s estate) to receive such benefits  shall at all times be that of a general creditor of the Company and shall have no priority over the  claims of other general creditors.  14. Governing Documents.  This Agreement, together with (i) the agreements  evidencing the Executive’s currently outstanding options and any future option grants or other  equity awards under the Plan and (ii) the Executive’s existing Proprietary Information and  Inventions Agreement, shall constitute the entire agreement and understanding of the Company  and the Executive with respect to the payment of severance benefits to the Executive and shall  supersede all prior and contemporaneous written or verbal agreements and understandings  

 

DB2/21688780.1  -9- between the Executive and the Company relating to such subject matter.  This Agreement may  only be amended by a written instrument signed by the Executive and an authorized officer of  the Company.  Any and all prior agreements, understandings or representations relating to the  Executive’s severance benefits, other than (i) the agreements evidencing the Executive’s  currently outstanding options under the Plan and (ii) the Executive’s existing Proprietary  Information and Inventions Agreement, are hereby terminated and cancelled in their entirety and  are of no further force or effect.  15. Governing Law.  The provisions of this Agreement shall be construed and  interpreted under the laws of the State of California applicable to agreements executed and  wholly performed within the State of California.  If any provision of this Agreement as applied  to any party or to any circumstance should be adjudged by a court of competent jurisdiction to be  void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to  the maximum extent permissible by law) the application of such provision under circumstances  different from those adjudicated by the court, the application of any other provision of this  Agreement, or the enforceability or invalidity of this Agreement as a whole.  Should any  provision of this Agreement become or be deemed invalid, illegal or unenforceable in any  jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall  be deemed amended to the extent necessary to conform to applicable law so as to be valid and  enforceable or, if such provision cannot be so amended without materially altering the intention  of the parties, then such provision will be stricken, and the remainder of this Agreement shall  continue in full force and effect.  16. Arbitration.  A. Each party agrees that any and all disputes which arise out of or relate to  the Executive’s employment, the termination of the Executive’s employment or the terms of this  Agreement shall be resolved through final and binding arbitration.  Such arbitration shall be in  lieu of any trial before a judge and/or ju ry, and the Executive and Company express ly  waive all rights to  have such disp utes resolved through trial before a judge and/or jury.    Such disputes shall include, without limitation, claims for breach of contract or of the covenant  of good faith and fair dealing, claims of discrimination, claims under any federal, state or local  law or regulation now in existence or hereinafter enacted and as amended from time to time  concerning in any way the subject of the Executive’s employment with the Company or its  termination.   B. Arbitration shall be held in Santa Clara County, California and conducted  in accordance with the National Rules for the Resolution of Employment Disputes of the  American Arbitration Association (“AAA Rules”), provided, however, that the arbitrator shall  allow the discovery authorized by California Code of Civil Procedure section 1282, et seq., or  any other discovery required by applicable law in arbitration proceedings.  To the extent that any  of the AAA Rules conflict with applicable law, the arbitration procedures required by applicable  law shall govern.   C. During the course of the arbitration, the Company will pay the arbitrator’s  fee and any other type of expense or cost that the Executive would not otherwise be required to  bear if he were free to bring the dispute or claim in court and any other expense or cost that is  

 

DB2/21688780.1  -10- unique to arbitration.  The Company and the Executive shall each bear its or his own respective  attorneys’ fees incurred in connection with the arbitration.  D. The arbitrator shall issue a written award that sets forth the essential  findings of fact and conclusions of law on which the award is based.  The arbitrator shall have  the authority to award any relief authorized by law in connection with the asserted claims or  disputes.  The arbitrator’s award shall be subject to correction, confirmation, or vacation, as  provided by applicable law setting forth the standard of judicial review of arbitration awards.  Judgment upon the arbitrator’s award may be entered in any court having jurisdiction thereof.  17. Legal Representation.  The Executive acknowledges that he has had the right to  consult with counsel and is fully aware of his rights and obligations under this Agreement.  18. Counterparts.  This Agreement may be executed in more than one counterpart,  each of which shall be deemed an original, but all of which together shall constitute but one and  the same instrument.      

 

 

 

DB2/21688780.1   EXHIBIT A    FORM OF GENERAL RELEASE    THIS DOCUMENT IS INTENDED AS A FORM OF THE GENERAL SETTLEMENT AND  RELEASE.  PURSUANT TO PARAGRAPH 1 AND PARAGRAPH 3 OF THE LETTER  AGREEMENT, EXECUTION OF A RELEASE, IN SUBSTANTIALLY THE SAME FORM  AS THIS EXHIBIT A IS A CONDITION FOR EXECUTIVE’S RECEIPT OF CERTAIN  BENEFITS PURSUANT TO PARAGRAPH 2 AND PARAGRAPH 4. THE FORM MUST BE  FINALIZED BY ALPHA AND OMEGA SEMICONDUCTOR LIMITED PRIOR TO  EXECUTION.  

 

DB2/21688780.1  -2-   GENERAL SETTLEMENT AND RELEASE AGREEMENT   This General Settlement and Release Agreement (the “Agreement”) is by and between  Alpha ad Omega Semiconductor Limited, for itself and for all of its affiliated, related, parent and  direct and indirect subsidiary companies, joint venturers and partnerships, successors and  permitted assigns and each of them (collectively, “AOS”), on the one hand, and  __________________, for himself, and his agents, representatives, heirs and assigns  (“Executive”), on the other hand.  1. Payments. In full and complete consideration for Executive’s promises and  undertaking set forth in this Agreement, following the eighth (8th) day following receipt by AOS  of a fully executed Settlement and Release Agreement from Executive, AOS will provide  Executive the consideration, if any, to which Executive is entitled pursuant to the  Letter  Agreement between the parties, dated ________, 2010, at the times specified in Paragraph 2 or  Paragraph 4 (as applicable) of that Agreement unless the signature on this Agreement is revoked  pursuant to Paragraph 7 below.  2. Release of Known and Unknown Claims.  (a) It is understood and agreed by the parties to this Agreement that in consideration  of the mutual promises and covenants contained in this Agreement, and after consultation with  counsel, Executive irrevocably and unconditionally releases and forever discharges AOS and  each of the other Released Parties from any and all causes of action, claims, actions, rights,  judgments, obligations, damages, demands, accountings or liabilities of whatever kind or  character, which Executive may have against AOS or any of the Released Parties, or any of  them, by reason of or arising out of, touching upon or concerning Executive’s employment,  separation of his employment and reapplication for employment with AOS, or any statutory  claims, or any and all other matters of whatever kind, nature or description, whether known or  unknown, occurring prior to the date of the execution of this Agreement.  Executive  acknowledges that this release of claims specifically includes, but is not limited to, any and all  claims for fraud; breach of contract; breach of the implied covenant of good faith and fair  dealing; inducement of breach; interference with contractual rights; wrongful or unlawful  discharge or demotion; violation of public policy; sexual assault and battery; invasion of privacy;  intentional or negligent infliction of emotional distress; intentional or negligent  misrepresentation; conspiracy; defamation; unlawful effort to prevent employment;  discrimination or harassment on the basis of age, race, color, sex, national origin, ancestry,  religion, disability, handicap, medical condition or marital status; any claim under: Title VII,  ADA, ADEA OWBPA, FMLA, COBRA, OSHA, ERISA, IRC, FEHA, CalOsha, or any other  wrongful conduct, based upon events occurring prior to the date that this Agreement is executed  by Executive. Notwithstanding anything to the contrary herein, this Agreement shall not release  Executive’s  right, if any,  to indemnification pursuant to the Company’s Bylaws or insurance  policies, for any claims arising out of Executive’s conduct as an employee or officer of the  Company during his employment.    

 

DB2/21688780.1  -3- (b) Executive represents and warrants that he has not assigned or subrogated any of  his rights, claims or causes of action, including any claims referenced in this Agreement, or  authorized any other person or entity to assert such claims on his behalf, and he agrees to  indemnify and hold harmless AOS and each of the Released Parties against any assignment of  said rights, claims and/or causes of action.  3. Waiver of Unknown Claims.  (a) Executive does hereby expressly waive and relinquish all rights and benefits  afforded to him under law, and does so understanding and acknowledging the significance and  consequences of such a waiver.  (b) Releases of Unknown Claims/Waiver of Civil Code Section 1542 . The parties  agree that this Agreement is a full and final release of any and all claims and Executive expressly  waives the benefit of Section 1542 of the California Civil Code, which provides:  “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE  CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME  OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR”  (c) Executive acknowledges and understands that he is being represented in this  matter by counsel, and acknowledges that he is not required to release unknown claims but that  he expressly acknowledges and agrees that this Agreement is also intended to include in its  effect, without limitation, all such claims which he does not know or suspect to exist at the time  of the execution of this Agreement, and that this Agreement contemplates the extinguishment of  those claims.  (d) Executive acknowledges and agrees that he may later discover facts different from or in  addition to those he now knows or believes to be true in entering into this Agreement.  Executive agrees  to assume the risk of the possible discovery of additional or different facts, including facts which may  have been concealed or hidden, and agrees that this Agreement shall remain effective regardless of such  additional or different facts.  Executive further acknowledges and agrees that neither AOS nor any of the  other Released Parties had any duty to disclose any fact to him prior to the execution of this Agreement.  4. Non-Admission of Liability .  Executive expressly recognizes that this Agreement shall  not in any way be construed as an admission by AOS or any of the other Released Parties of any  unlawful or wrongful acts whatsoever against Executive or any other person or entity.  AOS and  each of the Released Parties expressly denies any violation of any policy or procedure, or of any  state or federal law or regulation.  AOS and each of the Released Parties also specifically denies  any liability to or wrongful acts against Executive, or any other person, on the part of themselves  or any other employees or agents of AOS.  This Agreement shall not be admissible in any  proceeding as evidence of or any admission by AOS of any violation of any law or regulation or  wrongful act.  This Agreement may, however, be introduced in any proceeding to enforce this  Agreement.  5. No Filing of Claims .  Executive specifically represents that he has no pending  complaints or charges against AOS or any of the other Released Parties with any state or federal  

 

DB2/21688780.1  -4- court or any local, state or federal agency, division or department based on any events occurring  prior to the date of execution of this Agreement.  6. Advice of Counsel .  Executive acknowledges that he has been given twenty-one days  (21) to seek the advice of counsel and to consider the effects of this Agreement upon his legal  rights (the “Consideration Period”).  To the extent that Executive has signed the Agreement  without obtaining the advice of counsel or before expiration of the Consideration Period,  Executive acknowledges that he has done so voluntarily with a full understanding of the  Agreement and its effect upon his legal rights.  Any discussion between Executive and AOS or  any of the Released Parties concerning the terms and conditions of this Agreement does not  extend the Consideration Period.  7. Revocation Period.  Executive acknowledges that he has been informed that, after he  signs this Agreement, he has the right to revoke his signature for a period of seven days (7) from  the date that he signs the Agreement.  To be effective, the revocation must be in writing, signed  by Executive, and delivered to Vice President of Human Resources at 475 Oakmead Parkway,  Sunnyvale, California 94085 before the close of business on the seventh day (7th) day following  the date Executive signs this Agreement.  Executive acknowledges and agrees that AOS has no  obligation to comply with the terms of this Agreement until the Revocation Period has expired  without revocation.  8. Confidentiality.  Executive consents and agrees that he will not, at any time, disclose the  existence of this Agreement, the terms of his severance benefits and/or the alleged facts or  circumstances giving rise to any actual or alleged claims or the Action to any person, firm,  Company, association, or entity or the press or media for any reason or purpose whatsoever,  other than to his attorney, his immediate family and to his accountant or financial advisor for tax  purposes.  If Executive is served with any subpoena, court order, or other legal process seeking  disclosure of any such information, Executive shall promptly send to AOS, within forty-eight  (48) hours, via facsimile at (408) 830 9749, such subpoena, court order, or other legal process so  that AOS may exercise any applicable legal remedies.  Executive agrees and acknowledges that a  violation of this paragraph by Executive shall be a material breach of this Agreement.  9. Delivery of Documents.  Executive represents and warrants that he has not removed any  documents, records or other information, including any such documents, records or information  that are or were electronically stored, from the premises of AOS. Executive acknowledges that  such documents, records and other information are the exclusive property of AOS or its  subsidiaries or affiliates.  10. Remedies For Breach Of This Agreement.  (a) Injunctive Relief.  In the event of a breach of the provisions of this Agreement,  Executive agrees that any remedy at law for any breach or threatened breach of the provisions of  such paragraphs and the covenants set forth therein, will be inadequate and, accordingly, each  party hereby stipulates that the other is entitled to obtain injunctive relief for any such breaches  or threatened breaches (without the necessity of posting a bond).  The injunctive relief provided  for in this paragraph is in addition to, and is not in limitation of, any and all other remedies at law  or in equity otherwise available to the applicable party.  

 

DB2/21688780.1  -5- (b) Remedies Cumulative.  The remedies in this paragraph are not exclusive, and the  parties shall have the right to pursue any other legal or equitable remedies to enforce the terms of  this Agreement.  (c) Governing Law; Consent to Jurisdiction.  This Agreement shall be deemed to  be a contract made under, and shall be construed in accordance with, the laws of the State of  California, without giving effect to conflict of laws principles thereof.  All questions concerning  the construction, validity, and interpretation of this Agreement shall be governed by and  construed in accordance with the domestic laws of the State of California, without giving effect  to any choice of law or conflict of law provision that would cause the application of the laws of  any jurisdiction other than the State of California.  Each of the parties hereby irrevocably and  unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of  California or the United States District Court for the Northern District of California for any  litigation, proceeding or action arising out of or relating to this Agreement  (and agrees not to  commence any litigation, proceeding or action relating thereto except in such courts).  Each of  the parties hereby irrevocably and unconditionally waives any objection to the laying of venue of  any litigation, proceeding or action arising out of this agreement or thereby in the courts of the  State of California or the United States District Court for the Northern District of California and  hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any  such court that any such litigation, proceeding or action brought in any such court has been  brought in an inconvenient forum.  11. Counsel.  The parties hereby acknowledge that they have had the reasonable opportunity  to consult with attorneys of their own choice concerning the terms and conditions of this  Agreement, that they have read and understand this Agreement, that they are fully aware of the  contents of this Agreement and that they enter into this agreement freely and knowingly and with  a full understanding of its legal effect.  12. Entire Agreement.  This is the entire agreement between Executive and AOS with  respect to the subject matter hereof and the Agreement supersedes any previous negotiations,  agreements and understandings.  Executive acknowledges that he has not relied on any oral or  written representations by AOS (or its counsel) or any of the other Released Parties to induce  him to sign this Agreement, other than the terms of this Agreement.  No modifications of this  Agreement can be made except in writing signed by Executive and AOS.  13. Severability.  If any provision of this Agreement is held to be illegal, invalid or  unenforceable under existing or future laws effective during the term of this Agreement, such  provisions shall be fully several, the Agreement shall be construed and enforced as if such  illegal, invalid or unenforceable provision had never comprised a part of this Agreement, and the  remaining provisions of this Agreement shall remain in full force and effect and shall not be  affected by the illegal, invalid or unenforceable provision or by its severance from this  Agreement.  Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall  be added automatically as part of this Agreement a provision as similar in terms to such illegal,  invalid or unenforceable provision as may be possible and be legal, valid and enforceable.  14. Ambiguities.  Attorneys for both parties have participated in the negotiation of this  Agreement and, thus, it is understood and agreed that the general rule that ambiguities are to be  

 

DB2/21688780.1  -6- construed against the drafter shall not apply to this Agreement.  In the event that any language of  this Agreement is found to be ambiguous, each party shall have an opportunity to present  evidence as to the actual intent of the parties with respect to any such ambiguous language.  15. Waiver.  No waiver by any party of any breach of any term or provision of this  Agreement shall be a waiver of any preceding, concurrent or succeeding breach of this  Agreement or of any other term or provision of this Agreement.  No waiver shall be binding on  the part of, or on behalf of, any other party entering into this Agreement.  16. Counterparts.  This Agreement may be executed in one or more counterparts, each of  which shall be deemed an original, all of which together shall constitute one and the same  instrument,  THE SIGNATORIES HAVE CAREFULLY READ THIS ENTIRE  AGREEMENT.  ITS CONTENTS HAVE BEEN FULLY EXPLAINED TO  THEM BY THEIR ATTORNEYS.  THE SIGNATORIES FULLY  UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS  AGREEMENT.  THE ONLY PROMISES MADE TO ANY SIGNATORY  ABOUT THIS AGREEMENT, AND TO SIGN THIS AGREEMENT, ARE  CONTAINED IN THIS AGREEMENT.  THE SIGNATORIES ARE SIGNING  THIS AGREEMENT VOLUNTARILY.    PLEASE READ CAREFULLY.  THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE  INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS 

 

DB2/21688780.1   IN WITNESS WHEREOF , the parties have executed this General Settlement and Release  Agreement on the dates set forth below.       ALPHA AND OMEGA  SEMICONDUCTOR LIMITED:           DATE:             EXECUTIVE:             DATE:

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