ATMEL CORPORATION STEVEN LAUB EMPLOYMENT AGREEMENT

Exhibit 10.1

ATMEL CORPORATION

STEVEN LAUB EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is entered into as of August 6, 2006, by and between Atmel Corporation (the “Company”) and Steven Laub (“Executive”).

     1.  Duties and Scope of Employment .

          (a) Positions and Duties . As of August 7, 2006 (the “Effective Date”), Executive will commence service as the Company’s Chief Executive Officer and President. Executive will report to the Company’s Board of Directors (the “Board”). As of the Effective Date, Executive will render such business and professional services in the performance of his duties, consistent with Executive’s position within the Company, as will reasonably be assigned to him by the Board. The period Executive is employed by the Company under this Agreement is referred to herein as the “Employment Term”.

          (b) Board Membership . As of the Effective Date, Executive serves as a member of the Board. At each annual meeting of the Company’s stockholders during the Employment Term, the Company will nominate Executive to serve as a member of the Board. Executive’s service as a member of the Board will be subject to any required stockholder approval. Upon the termination of Executive’s employment for any reason, unless otherwise requested by the Board, Executive will be deemed to have resigned from the Board (and all other positions held at the Company and its affiliates) voluntarily, without any further required action by Executive, as of the end of Executive’s employment and Executive, at the Board’s request, will execute any documents necessary to reflect his resignation.

          (c) Obligations . During the Employment Term, Executive, except as provided below, will devote Executive’s full business efforts and time to the Company and will use good faith efforts to discharge Executive’s obligations under this Agreement to the best of Executive’s ability and in accordance with each of the Company’s written corporate guidance and ethics guidelines, conflict of interests policies and code of conduct. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation, or consulting activity for any direct or indirect remuneration without the prior approval of the Board (which approval will not be unreasonably withheld); provided, however, that Executive may, without the approval of the Board, (i) serve in any capacity with any civic, educational, professional, industry or charitable organization, provided such services do not interfere with Executive’s obligations to Company, and (ii) serve on the board of directors of one (1) company of his choosing, with such company to be reasonably acceptable to the Board (currently Teridian Semiconductor Corporation, as to which Executive is paid by Golden Gate Capital and such service will not constitute a violation of this Section 1(c)).

               (i) Executive hereby represents and warrants to the Company that Executive is not party to any contract, understanding, agreement or policy, written or otherwise, that would be breached by Executive’s entering into, or performing services under, this Agreement.

Executive further represents that he has disclosed to the Company in writing all threatened, pending, or actual claims that are unresolved and still outstanding as of the Effective Date, in each case, against Executive of which he is aware, if any, as a result of his employment with any previous employer or his membership on any boards of directors.

               (d)  Other Entities . Executive agrees to serve and will be appointed, without additional compensation, as an officer and director for each of the Company’s subsidiaries, partnerships, joint ventures, limited liability companies and other affiliates, including entities in which the Company has a significant investment as determined by the Company. As used in this Agreement, the term “affiliates” will mean any entity controlled by, controlling, or under common control of the Company.

     2.  At-Will Employment . Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive. However, as described in this Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination of employment.

     3.  Compensation .

          (a) Base Salary . Commencing with the Effective Date, the Company will pay Executive an annual salary of $700,000 as compensation for his services (such annual salary, as is then effective, to be referred to herein as “Base Salary”). Executive’s Base Salary will be subject to annual review (subject to the provisions of Section 10(e)(iii) of this Agreement). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and will be subject to the usual, required withholdings.

          (b) Annual Incentive . Executive will be eligible to receive annual cash incentives payable for the achievement of performance goals established by the Board or by the Compensation Committee of the Board (the “Committee”). During the Employment Term, Executive’s target annual incentive (“Target Annual Incentive”) will be not less than 100% of Base Salary. The actual earned annual cash incentive, if any, payable to Executive for any performance period will depend upon the extent to which the applicable performance goal(s) specified by the Committee with the input of Executive are achieved or exceeded and will be adjusted for under- or over-performance. Any incentive earned during the remainder of fiscal 2006 will be pro-rated based on Executive’s hire date (calculated by multiplying any annual incentive earned by Executive by a fraction with a numerator equal to the number of days inclusive between the Effective Date and December 31, 2006 and a denominator equal to 365).

          (c) Equity Awards .

               (i) As of August 7, 2006, Executive will be granted a nonstatutory stock option to purchase 1,450,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq National Market (“Nasdaq”) for the common stock of the Company on August 7, 2006 (the “Initial Option”). The Initial Option will be granted under and subject to the terms, definitions and provisions of the Company’s 2005 Stock Plan (the “Plan”) and

will be scheduled to vest at a rate of 25% of the shares subject to the Initial Option on the first anniversary of the grant and 1/48 of the shares will be scheduled to vest monthly thereafter assuming Executive’s continued employment with the Company on each scheduled vesting date. Except as provided in this Agreement, the Initial Option will be subject to the Company’s standard terms and conditions for options granted under the Plan.

               (ii) The Company will use its commercially reasonable best efforts to secure approval from Nasdaq for the grant of an additional option to purchase 2,550,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq for the common stock of the Company on the date of grant (the “Stand-Alone Grant”). Subject to Nasdaq approval, the Stand-Alone Grant will be granted under a non-stockholder approved arrangement outside of any Company equity plan. Subject to the provisions of this Agreement, the terms and conditions of the Stand-Alone Grant will be materially similar to those of the Initial Option (except that it will not be granted under a Company equity plan), and will be scheduled to vest at a rate of 25% of the shares subject to the award on August 7, 2007, and the remainder of the shares will be scheduled to vest pro-rata monthly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. Following the issue of the Stand-Alone Grant, the Company will use commercially reasonable best efforts to register the shares underlying the Stand-Alone Grant on Form S-8 in order to permit resale thereof.

               (iii) If the Company does not receive Nasdaq approval of the Stand-Alone Grant by December 31, 2006, then on January 2, 2007 (assuming Executive is still employed by the Company), the Company will grant to Executive a nonstatutory stock option to purchase 500,000 shares of Company common stock at a per share exercise price equal to the closing price per share on the Nasdaq for the common stock of the Company on January 2, 2007 (the “Additional Option”). The Additional Option will be granted under and subject to the same terms, definitions and provisions applicable to the Initial Option, and will be scheduled to vest at a rate of 25% of the shares subject to the award on August 7, 2007, and the remainder of the shares will be scheduled to vest pro-rata monthly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. In addition, if Nasdaq approval of the Stand-Alone Grant is not obtained, on January 2, 2007 (assuming Executive is still employed by the Company), the Company will grant 1,000,000 shares of restricted stock (or restricted stock units) to Executive under and subject to the same terms, definitions and provisions applicable to the Initial Option assuming exercise thereof, except that such shares will be scheduled to vest at a rate of 25% of the shares subject to the award vesting on August 7, 2007, and the remainder of the shares will be scheduled to vest pro-rata quarterly over the three (3) year period commencing on August 7, 2007, assuming Executive’s continued employment with the Company on each scheduled vesting date. The Company agrees (to the extent permitted by the Company’s Insider Trading Policy), at the request of Executive, to facilitate the implementation by Executive of a 10b5-1 trading plan to accommodate Executive’s ability to sell such portion of the relevant shares as may be necessary to cover Executive’s tax withholding obligations with respect to such vesting, if any, at such tax rate as Executive may specify. If the Company’s Insider Trading Policy does not permit the implementation of a 10b5-1 trading plan, Executive will be allowed to have the Company withhold the number of shares necessary to satisfy his minimum tax withholding obligation.

     4.  Employee Benefits .

          (a) Generally . Executive will be eligible to participate in accordance with the terms of all Company employee benefit plans, policies and arrangements that are applicable to other executive officers of the Company, as such plans, policies and arrangements may exist from time to time.

          (b) Vacation . Executive will be entitled to receive paid annual vacation in accordance with Company policy for other senior executive officers, but with vacation accrual of not less than four (4) weeks per year.

     5.  Expenses . The Company will reimburse Executive for reasonable travel, entertainment and other expenses incurred by Executive in the furtherance of the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.

     6.  Termination of Employment . In the event Executive’s employment with the Company terminates for any reason, Executive will be entitled to any (a) unpaid Base Salary accrued up to the effective date of termination; (b) unpaid, but earned and accrued annual incentive for any completed fiscal year as of his termination of employment; (c) pay for accrued but unused vacation; (d) benefits or compensation as provided under the terms of any employee benefit and compensation agreements or plans applicable to Executive; (e) unreimbursed business expenses required to be reimbursed to Executive; and (f) rights to indemnification Executive may have under the Company’s Articles of Incorporation, Bylaws, this Agreement, and/or separate indemnification agreement, as applicable. In the event Executive’s employment with the Company terminates for any reason, Executive will be entitled to exercise any outstanding stock options for at least twelve (12) months after the later of such termination of employment or the date upon which Executive ceases to provide any other services to the Company or any of its affiliates, whether as a director, independent contractor or otherwise, but in no event later than the applicable scheduled expiration date of such award (in the absence of any termination of employment) as set forth in the award agreement. In the event Executive’s employment with the Company terminates due to death or Disability, then there will be acceleration of vesting of any then unexpired and unvested equity awards (including, but not limited to, awards of stock appreciation rights or restricted stock units) held by Executive based on the vesting that Executive would have achieved had Executive remained in the employ of the Company for an additional twelve (12) months (provided that, if Executive’s employment with the Company terminates due to death or Disability prior to January 2, 2007, then “twenty-four (24) months” will be substituted for “twelve (12) months” in this sentence). In addition, if the termination is by the Company without Cause or Executive resigns for Good Reason, Executive will be entitled to the amounts and benefits specified in Section 7.

     7.  Severance .

          (a) Termination Without Cause or Resignation for Good Reason other than in Connection with a Change of Control . If Executive’s employment is terminated by the Company without Cause or if Executive resigns for Good Reason, and such termination is not in Connection with a Change of Control, then, subject to Section 8, Executive will receive: (i) continued payment of Executive’s Base Salary (subject to applicable tax withholdings) for twenty-four (24) months, such

amounts to be paid out bi-weekly in accordance with the Company’s normal payroll policies; (ii) the current year’s Target Annual Incentive pro-rated to the date of termination, with such pro-rated amount to be calculated by multiplying the current year’s Target Annual Incentive by a fraction with a numerator equal to the number of days inclusive between the start of the current calendar year and the date of termination and a denominator equal to 365, such amounts to be paid out bi-weekly in accordance with the Company’s normal payroll policies over the course of twelve (12) months; (iii) twelve (12) months accelerated vesting with respect to Executive’s then outstanding, unvested equity awards, and (iv) reimbursement for premiums paid for continued health benefits for Executive (and any eligible dependents) under the Company’s health plans until the earlier of (A) eighteen (18) months, payable when such premiums are due (provided Executive validly elects to continue coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)), or (B) the date upon which Executive and Executive’s eligible dependents become covered under similar plans. Notwithstanding the foregoing, if Executive is terminated without Cause or resigns for Good Reason, and such termination is not in Connection with a Change of Control and occurs prior to January 2, 2007, then “twenty-four (24) months” will be substituted for “twelve (12) months” in clause (iii) of the preceding sentence.

          (b) Termination Without Cause or Resignation for Good Reason in Connection with a Change of Control . If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, and the term