Document:

Exhibit 10.1

 

GSI TECHNOLOGY, INC.

2013 VARIABLE COMPENSATION PLAN

(Effective as of April 1, 2012)

 

1.  Introduction.  The Company hereby adopts the Plan, effective as of April 1, 2012.  The purpose of the Plan is to encourage performance and achieve retention of a select group of executive employees of GSI Technology, Inc.  This document constitutes the written instrument under which the Plan is maintained.

 

2.  Definitions.

 

“Cause” means (i) conviction of a felony or a crime of moral turpitude; (ii) misconduct that results in harm to the Company; (iii) material failure to perform assigned duties; or (iv) willful disregard of lawful instructions from the chief executive officer of the Company or the Board of Directors relating to the business of the Company or any of its affiliates.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued with respect thereof.

 

“Committee” means the Compensation Committee of the Company’s Board of Directors.

 

“Company” means GSI Technology, Inc., a Delaware corporation.

 

“Disability” means that a Participant (i)  is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii)  is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer.

 

“Eligible Employee” means each employee who is eligible for the Plan as designated by the Committee as set forth in approved minutes.

 

“Operating Income” means the Company’s operating income for fiscal 2013, excluding (1) share based compensation, (2) acquisition-related costs , (3) patent/IP related litigation costs and (4) any adjustments as deemed necessary by the Committee for 2013.

 

“Normal Retirement Age” means age sixty (60).

 

“Participant” means each Eligible Employee who is designated from time to time by the Committee in writing.

 

“Plan” means the GSI Technology, Inc. 2013 Variable Compensation Plan, as set forth in this document and as hereafter amended.

 

“Retirement” means the termination of employment after Normal Retirement Age.

 

3.  Variable Compensation Award.

 

(a) Variable Compensation Award and Calculation of Payable Amount. Each Participant will receive an award, entitling the Participant to earn variable compensation, the payment of which will be based upon (i) the achievement of performance criteria based on Operating Income and net revenues determined in accordance with US GAAP, or a combination of the two and (ii) continued employment by the Participant through the

 

 

vesting dates set forth in Section 4 hereof (the “Variable Compensation Award”).  The Committee shall designate in writing the amount payable under the Variable Compensation Award and, if applicable, the percentage of the amount payable under the Variable Compensation Award that is allocable to each of the criteria.  Notwithstanding the foregoing, the maximum amount payable under a Variable Compensation Award granted to any Participant shall not exceed two times the Participant’s target Variable Compensation Award for 2013, unless the Committee, in its sole discretion, decides to permit a greater amount with respect to such Participant based on the performance and condition of the Company’s business. Also, at any time prior to April 1, 2013, the Committee or the CEO, in his, her, or its sole discretion, may reduce the amount payable under any Participant’s Variable Compensation Award.  The amount of the Variable Compensation Award that may become payable to the extent it becomes vested in accordance with the schedule set forth in Section 4 hereof shall be calculated as soon as reasonably practicable following April 1, 2013 based on the extent to which the performance criteria set forth in this Section 3(a) have been achieved (the “Award Payment Amount”).

 

4.  Payment of Variable Compensation Award.

 

(a)  Vesting, Timing and Form of Payment. Subject to Sections 4(b), 4(c), 4(d) and 7, each Participant’s Award Payment Amount shall vest and be paid as follows:

 

(i)  Sixty percent (60%) of the Participant’s Award Payment Amount shall vest and be paid to the Participant on the last business day in April 2013; and

 

(ii)  Twenty percent (20%) of the Participant’s Award Payment Amount (i.e. fifty percent (50%) of the Award Payment Amount then remaining) shall vest and be paid to the Participant on the last business day in April, 2014; and

 

(iii)  Twenty percent (20%) of the Participant’s Award Payment Amount (i.e. one-hundred percent (100%) of the Award Payment Amount then remaining) shall vest and be paid to the Participant on the last business day in April, 2015.

 

(b)  Distribution in the Event of Retirement, Termination as a result of Disability or without Cause. If a Participant terminates employment because of Retirement or Disability, or the Company terminates a Participant’s employment without Cause, the Participant shall be entitled to payment of all of his or her Award Payment Amount according to the schedule in Section 4(a), provided that if termination under these conditions occurs prior to April 1, 2013, the amount of the Variable Compensation Award payable will be the Award Payment Amount calculated pursuant to Section 3(a), multiplied by the number of days employee was employed in Fiscal 2013 by the Company and then divided by 365 days, and all remaining amounts payable under Variable Compensation Award for 2013 shall be forfeited.

 

(c)  Forfeiture. If the Company terminates a Participant’s employment for Cause or if the Participant’s employment is terminated for any reason other than as a result of Retirement or Disability, he or she shall forfeit all or any portion of his or her entire Award Payment Amount for 2013 (as set forth in Section 3(a)) which is not yet vested and payable under the schedule set forth in Section 4(a) as of the date of termination.

 

(d)  Timing of Distribution to a Beneficiary. If a Participant dies while still employed by the Company or after termination due to Retirement, Disability, or termination by the Company without Cause but before receiving a distribution of all of his or her Award Payment Amount according the schedule in Section 4(a), then the vesting of the Participant’s Award Payment Amount shall be fully accelerated such that one-hundred percent (100%) of the Award Payment Amount, as calculated pursuant to Section 4(b) hereof (with the amount prorated to the date of death in the event death occurs prior to April 1, 2013), will be distributed to his or her beneficiary as a lump sum distribution on the April 30 following the Participant’s death.

 

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(e)  Beneficiary Designation. Each Participant must designate a beneficiary to receive a distribution of his or her Variable Compensation Award if the Participant dies before such amount is fully distributed to him or her. To be effective, a beneficiary designation must be signed, dated and delivered to the Committee. In the absence of a valid or effective beneficiary designation, the Participant’s surviving spouse will be his or her beneficiary or, if there is no surviving spouse, the Participant’s estate will be his or her beneficiary. If a married Participant designates anyone other than his or her spouse as his or her beneficiary, such designation will be void unless it is signed and dated by the Participant’s spouse.

 

5.  Withholding. The Company will withhold from any Plan distribution all required federal, state, local and other taxes and any other payroll deductions that may be required.

 

6.  Administration. The Plan is administered and interpreted by the Company. The Company has delegated to the Committee certain responsibilities under the Plan. The Committee has the full and exclusive discretion to interpret and administer the Plan. All actions, interpretations and decisions of the Committee are conclusive and binding on all persons, and will be given the maximum possible deference allowed by law.  Subject to the provisions of the Plan, the Committee shall have full authority to select, in its sole discretion the Participant to whom Variable Compensation Awards will be granted.

 

7.  Amendment or Termination. Through March 31, 2013, the Committee, in its sole and unlimited discretion, may amend or terminate the Plan at any time, without prior notice to any Participant. After April 1, 2013, the Committee may amend or terminate the Plan provided that any such amendment does not reduce or increase any benefit to which a Participant has accrued and is otherwise entitled to under the terms of the Plan, nor accelerate the timing of any payment under the Plan. Notwithstanding the foregoing to the contrary, the Company reserves the right to the extent it deems necessary or advisable, in its sole discretion, to unilaterally alter or modify the Plan and any Variable Compensation Awards made thereunder to ensure that the Plan and Variable Compensation Awards provided to Participants who are U.S. taxpayers are made in such a manner that either qualify for exemption from or comply with Code Section 409A; provided, however, that the Company makes no representations that the Plan or any Variable Compensation Awards made thereunder will be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to the Plan or any Variable Compensation Awards made thereunder. The Plan shall automatically terminate on the date when no Participant (or beneficiary) has any right to or expectation of payment of further benefits under the Plan.

 

8.  Source of Payments. All payments under the Plan will be paid in cash from the general funds of the Company. No separate fund will be established under the Plan, and the Plan will have no assets. Any right of any person to receive any payment under the Plan is no greater than the right of any other general unsecured creditor of the Company. This Plan shall be binding upon the Company’s successors and assigns.

 

9.  Inalienability. A Participant’s rights to benefits under the Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant’s beneficiary.

 

10.  Applicable Law. The provisions of the Plan will be construed, administered and enforced in accordance with the laws of the State of California without reference to its principles of conflicts-of-laws.

 

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

 

12.  No Right of Continued Employment. THIS PLAN DOES NOT GIVE ANY ELIGIBLE EMPLOYEE OR PARTICIPANT THE RIGHT TO BE RETAINED AS AN EMPLOYEE. SUBJECT TO THE TERMS OF ANY WRITTEN EMPLOYMENT AGREEMENT TO THE CONTRARY, THE COMPANY SHALL HAVE THE RIGHT TO TERMINATE OR CHANGE THE TERMS OF EMPLOYMENT OF AN ELIGIBLE

 

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EMPLOYEE OR A PARTICIPANT AT ANY TIME AND FOR ANY REASON WHATSOEVER, WITH OR WITHOUT CAUSE.

 

13.  Bindings on Successor.  The liabilities and obligations of the Company under this Plan will be binding upon any successor corporation or entity which succeeds to all or substantially all of the assets and business of the Company by merger or other transaction.

 

IN WITNESS WHEREOF, GSI Technology, Inc., by its duly authorized officer, has executed the Plan on the date indicated below.

 

 

	
GSI   TECHNOLOGY, INC.
    	
 
    
	
 
    	
 
    
	
/s/   Lee-Lean Shu
    	
 
    
	
Name:   Lee-Lean Shu
    	
 
    
	
Title:   Chief Executive Officer
    	
 
    

 

 

Date: May 2, 2012

 

4Exhibit 10.11

 

SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of May 8, 2012 (this “Amendment”), between NEW MOUNTAIN FINANCE HOLDINGS, L.L.C., a Delaware limited liability company (the “Borrower”), WELLS FARGO SECURITIES, LLC, a Delaware limited liability company (the “Administrative Agent”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as a lender (the “Lender”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral custodian (the “Collateral Custodian”).

 

WHEREAS, the Borrower, the Administrative Agent, the Lender, the other lenders party from time to time thereto and the Collateral Custodian, are party to the Amended and Restated Loan and Security Agreement, dated as of May 19, 2011 (as amended from time to time prior to the date hereof, the “Loan and Security Agreement”), providing, among other things, for the making and the administration of the Advances by the lenders to the Borrower; and

 

WHEREAS, the Borrower, the Administrative Agent, the Collateral Custodian and the Lender desire to amend the Loan and Security Agreement, in accordance with Section 12.1 of the Loan and Security Agreement and subject to the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.1.                                          Defined Terms.  Terms used but not defined herein have the respective meanings given to such terms in the Loan and Security Agreement.

 

ARTICLE II

 

Amendments to Loan and Security Agreement

 

SECTION 2.1.                                          Section 1.1 of the Loan and Security Agreement shall be amended by deleting the definitions of “Applicable Spread”, “Commitment Reduction Percentage”, “Facility Maturity Date” and “Revolving Period End Date” and inserting in lieu thereof the following:

 

“Applicable Spread”:  A rate per annum equal to 2.75%; provided that (i) after the first anniversary of the Closing Date, the Applicable Spread may be increased by a rate per annum not to exceed to 0.50% upon the occurrence of an Applicable Spread Increase Event; (ii) if the Applicable Spread has been increased following an Applicable Spread Increase Event, the Applicable Spread shall, subject to the limitations in clauses (iii) and (iv) of this definition, be reduced to a rate equal to 2.75% upon the first Business Day following the

 

 

occurrence of an Applicable Spread Decrease Event; (iii) any adjustment to the Applicable Spread shall remain effective until the later of (A) the next Applicable Spread Event and (B) the date that is 364 days after such adjustment; (iv) there shall only be one (1) Applicable Spread Event during any 364-day period; (v) so long as no Event of Default has occurred and is continuing, the Applicable Spread shall not be greater than a rate per annum equal to 4.25%; and (vi) at no time shall the Applicable Spread be less than a rate of 2.75% per annum.

 

“Commitment Reduction Percentage”: (a) On or prior to October 21, 2012, a rate per annum equal to 3.0%, (b) after October 21, 2012 and on or prior to October 21, 2013, a rate per annum equal to 2.0%, (c) after October 21, 2013 and on or prior to August 28, 2014, a rate per annum equal to 1.0% and (d) after August 28, 2014, zero.

 

“Facility Maturity Date”:  October 27, 2016.

 

“Revolving Period End Date”: The earliest to occur of (a) October 27, 2014, (b) a Permanent BDC Asset Coverage Event and (c) the date of the declaration of the Revolving Period End Date pursuant to Section 9.2(a).

 

SECTION 2.2.                                          Section 2.3(a)(iii) of the Loan and Security Agreement shall be amended by deleting “August 22, 2012” and inserting “August 28, 2014” in lieu thereof.

 

ARTICLE III

 

Representations and Warranties

 

SECTION 3.1.                                          The Borrower hereby represents and warrants to the Administrative Agent and the Lender that, as of the date first written above, (i) no Default or Event of Default has occurred and is continuing and (ii) the representations and warranties of the Borrower contained in the Loan and Security Agreement are true and correct in all material respects on and as of such day (other than any representation and warranty that is made as of a specific date).

 

ARTICLE IV

 

Conditions Precedent

 

SECTION 4.1.                                          This Amendment shall become effective upon the satisfaction of the following conditions (or until such conditions are waived in writing by the Administrative Agent in its sole discretion):

 

(a)                                 the execution and delivery of this Amendment by the parties hereto;

 

(b)                                 the Borrower shall have paid, or caused to be paid, to the Administrative Agent a structuring fee in an amount equal to $800,000;

 

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(c)                                  the Administrative Agent shall have received satisfactory evidence that the Borrower has obtained all required consents and approvals of all Persons to the execution, delivery and performance of this Amendment and the consummation of the transactions contemplated hereby; and

 

(d)                                 the Administrative Agent shall have received the executed legal opinion or opinions of Simpson Thacher & Bartlett LLP, counsel to the Borrower, covering authorization and enforceability of this Amendment in form and substance acceptable to the Administrative Agent in its reasonable discretion.

 

ARTICLE V

 

Miscellaneous

 

SECTION 5.1.                                          Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

SECTION 5.2.                                          Severability Clause.  In case any provision in this Amendment shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 5.3.                                          Ratification.  Except as expressly amended hereby, the Loan and Security Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This Amendment shall form a part of the Loan and Security Agreement for all purposes.

 

SECTION 5.4.                                          Counterparts.  The parties hereto may sign one or more copies of this Amendment in counterparts, all of which together shall constitute one and the same agreement.  Delivery of an executed signature page of this Amendment by facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.

 

SECTION 5.5.                                          Headings.  The headings of the Articles and Sections in this Amendment are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.

 

	
 
    	
NEW   MOUNTAIN FINANCE HOLDINGS, L.L.C., as the Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Adam Weinstein
    
	
 
    	
Name:
    	
Adam   Weinstein
    
	
 
    	
Title:
    	
Chief   Financial Officer and Treasurer
    

 

[Signature Page to Sixth Amendment to A&R Loan and Security Agreement]

 

 

	
 
    	
WELLS   FARGO SECURITIES, LLC,
   as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Allan Schmitt
    
	
 
    	
 
    	
Name:
    	
Allan   Schmitt
    
	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
   representing 100% of the aggregate Commitments of the Lenders in effect as of   the date hereof
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kevin Sunday
    
	
 
    	
 
    	
Name:
    	
Kevin   Sunday
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to Sixth Amendment to A&R Loan and Security Agreement]

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Collateral Custodian
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Roth
    
	
 
    	
 
    	
Name:
    	
Michael   Roth
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

[Signature Page to Sixth Amendment to A&R Loan and Security Agreement]

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