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Exhibit
10.1
EXECUTIVE TRANSITION
AGREEMENT
This Executive Transition
Agreement (“Agreement”) is entered into as of the 13th
day of November, 2007 (the “Effective Date”), by and
between Gregory S. Lang (“Executive”) and Integrated
Device Technology, Inc. (the “Company”).
W
HEREAS , the Executive currently provides
personal services to the Company as President and Chief Executive
Officer; and
W
HEREAS , the Company and Executive wish to
provide for the transition of Executive’s services in return
for certain compensation and benefits.
N OW , T
HEREFORE , in consideration of the mutual
promises and covenants contained herein, it is hereby agreed by and
between the parties hereto as follows:
ARTICLE I
DEFINITIONS
For purposes of the
Agreement, the following terms are defined as follows:
1.1 “ Board ”
means the Board of Directors of the Company.
1.2 “ Cause ”
means:
(a) fraud,
misappropriation, embezzlement, or other act of material misconduct
against the Company or any of its affiliates;
(b) substantial and
willful failure to perform his duties to the Company or the
specific and lawful directives of the Board, as reasonably
determined by the Board;
(c) willful and
knowing violation of any rules or regulations of any governmental
or regulatory body; or
(d) Executive’s
conviction of or plea of guilty or nolo contendere to felony
criminal conduct.
1.3 “ Change in
Control ” means the occurrence of any of the following
events:
(a) a dissolution,
liquidation or sale of all or substantially all of the assets of
the Company;
(b) a merger or
consolidation in which the Company is not the surviving
corporation;
(c) a reverse merger
in which the Company is the surviving corporation but shares of the
Company’s common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or
(d) the acquisition by
any person, entity or group within the meaning of
Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or
related trust, sponsored or maintained by the Company or any
Affiliate of the Company) of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act, or
comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined
voting power entitled to vote in the election of
directors.
1.4 “Code”
means the Internal Revenue Code of 1986, as amended.
1.5 “ Company
” means Integrated Device Technology, Inc. or, following a
Change in Control, the surviving entity resulting from such
transaction.
1.6 “ Covered
Termination ” means (a) an Involuntary Termination
Without Cause or a voluntary termination for Good Reason that
occurs, in either case, during the period commencing on the
Effective Date and ending on the earlier of (i) the
appointment by the Board of a successor Chief Executive Officer or
(ii) February 28, 2008 or (b) Executive’s
termination of employment with the Company for any reason between
February 29, 2008 and December 31, 2008.
1.7 “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
1.8 “ Good Reason
” means the occurrence of any of the following actions or
failures to act without Executive’s express written consent,
provided that the Executive gives written notice to the Company of
such occurrence within 90 days of the initial existence of such
occurrence and, provided further that the Company does not remedy
such within 30 days after Executive’s written notice to the
Company of the occurrence of such act or failure to act:
(a) a material
diminution in the Executive’s authority, duties or
responsibilities;
(b) a material
reduction by the Company in Executive’s annual base salary as
in effect on the Effective Date;
(c) any material
breach by the Company of any provision of this Agreement;
or
(d) any failure by the
Company to obtain the assumption of this Agreement by any successor
or assign of the Company.
1.9 “ Involuntary
Termination Without Cause ” means Executive’s
dismissal or discharge other than for Cause. The termination of
Executive’s employment as a result of Executive’s death
or disability will not be deemed to be an Involuntary Termination
Without Cause.
1.10 “Transition
Period” means the period commencing on the Effective Date
and ending on the earlier of (i) the appointment by the Board
of a successor Chief Executive Officer or (ii) such date
between February 29, 2008 and December 31, 2008 as the
Board may designate in its discretion as the expiration date for
the Transition Period.
2
ARTICLE II
TRANSITION
EMPLOYMENT
2.1 Position and Duties.
Subject to terms set forth herein, during the Transition Period the
Company agrees to continue to employ Executive in the position of
President and Chief Executive Officer and Executive hereby accepts
such continued employment. Executive shall serve in an executive
capacity and shall perform such duties as are customarily
associated with the position of President and Chief Executive
Officer and such other duties as are assigned to Executive by the
Board. During the Transition Period, Executive will devote
Executive’s best efforts and substantially all of
Executive’s business time and attention (except for vacation
periods and reasonable periods of illness or other incapacities
permitted by the Company’s general employment policies or as
otherwise set forth in this Agreement) to the business of the
Company.
2.2 Employment at
Will/Resignation of Board Membership. Both the Company and
Executive shall have the right to terminate Executive’s
employment with the Company during the Transition Period at any
time, with or without Cause, and without prior notice. This
Agreement and Executive’s employment with the Company shall
terminate automatically on the earlier of (a) the
Company’s or Executive’s termination of
Executive’s employment or (b) the expiration of the
Transition Period. If Executive’s employment with the Company
is terminated, Executive will be eligible to receive severance
benefits to the extent provided in this Agreement. Effective as of
his termination of employment with the Company, Executive shall
resign as a member of the Board as well as a member of the board of
directors of any subsidiaries or affiliates of the
Company.
2.3 Employment Policies.
The employment relationship between the parties shall also be
governed by the general employment policies and practices of the
Company, including those relating to protection of confidential
information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the
Company’s general employment policies or practices, this
Agreement shall control.
ARTICLE III
COMPENSATION
3.1 Base Salary. Executive
shall receive for services to be rendered during the Transition
Period an annual base salary of $600,000, payable on the regular
payroll dates of the Company, subject to increase in the sole
discretion of the Board (the “Base Salary”), and
pro-rated for the Transition Period.
3.2 Annual Performance
Bonus . In addition to the Base Salary, during the
Transition Period Executive will be continue to be eligible to
participate in the Company’s Incentive Compensation Plan in
accordance with its current terms and conditions on a pro rata
basis (determined by reference to the actual base salary paid to
him during the period commencing on the first day of the
Company’s fiscal year and ending on his date of termination
if prior to the end of such fiscal year) which will paid at such
time as determined by the Company in its discretion but in no event
later than December 31, 2008 (the “Accrued
Bonus”).
3
3.3 Expenses . The
Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in the
furtherance of or in connection with the performance of
Executive’s duties hereunder, in accordance with the
Company’s expense reimbursement policy as in effect from time
to time. Without limiting the foregoing, the Company will also pay
directly or reimburse Executive for his reasonable commuting
expenses between Executive’s primary residence in Oregon and
the Company’s corporate headquarters, as well as the costs of
Executive’s rental housing in the greater San Jose
area.
3.4 Standard Company
Benefits. Executive shall be entitled to all rights and
benefits for which Executive is eligible under the terms and
conditions of the standard Company benefits and compensation
practices that may be in effect during the Transition Period and
are provided by the Company to its executive employees
generally.
ARTICLE IV
SEVERANCE AND CHANGE IN
CONTROL BENEFITS
4.1 Severance Benefits. If
Executive’s employment terminates due to a Covered
Termination, Executive shall receive any annual Base Salary and
Accrued Bonus that has accrued but is unpaid as of the date of such
termination. Subject to his executing and failing to revoke a
general release of claims against the Company to the
Company’s satisfaction within the later of 5 days after his
date of termination or the expiration of the revocation period,
Executive shall also receive (1) a lump sum payment equal to
one million two hundred thousand dollars ($1,200,000)
and
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