EXHIBIT 10.8

 

SILICON LABORATORIES INC.

2009 STOCK INCENTIVE PLAN

 

MARKET STOCK UNITS GRANT NOTICE AND
GLOBAL MARKET STOCK UNITS AWARD AGREEMENT

 

Silicon Laboratories Inc., a Delaware corporation (the “Company”), pursuant to
its 2009 Stock Incentive Plan, as amended and restated (the “Plan”), hereby
grants to the holder listed below (the “Participant”), an award (the “Award”) of
Market Stock Units (the “Units”), each of which is a bookkeeping entry
representing the equivalent in value of one (1) Share, on the terms and
conditions set forth herein and in the Global Market Stock Units Award Agreement
attached hereto (the “Award Agreement”), including any country-specific terms
and conditions set forth in an addendum to such agreement (the “Addendum”) the
Plan, which are incorporated herein by reference.  With respect to a Participant
who is a Covered Employee, the Award is intended to qualify as a
Performance-Based Award and has been granted in accordance with Article 9 of the
Plan.  Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Grant Notice and the Award Agreement.

 

Participant:

 

 

 

 

 

Grant Date:

 

 

 

 

 

Target Number of Units:

 

 

 

 

 

Maximum Number of Units:

 

               , which is 200% of the Target Number of Units, subject to
adjustment as provided by the Award Agreement.

 

 

 

First Measurement Period:

 

The Company fiscal year beginning [INSERT DATE A] and ending [INSERT DATE B],
subject to Section 9.1 of the Award Agreement.

 

 

 

Second Measurement Period:

 

The two Company fiscal years beginning [INSERT DATE A] and ending [INSERT DATE
C], subject to Section 9.1 of the Award Agreement.

 

 

 

Third Measurement Period:

 

The three Company fiscal years beginning [INSERT DATE A] and ending [INSERT DATE
D], subject to Section 9.1 of the Award Agreement.

 

 

 

Performance Period:

 

The period beginning on the first day of the First Measurement Period and ending
on the last day of the Third Measurement Period, subject to Section 9.1 of the
Award Agreement.

 

 

 

Performance Criteria:

 

The difference, measured in percentage points, for the applicable Measurement
Period between the Company Total Stockholder Return and the Benchmark Index
Total Return, both determined in accordance with Section 2 of the Award
Agreement.

 

 

 

Benchmark Index:

 

Philadelphia Semiconductor Sector Total Return Index (NASDAQ OMX: XSOX).

 

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Relative Return Factor:

 

For each Measurement Period, a percentage (rounded to the nearest 1/100th of 1%
and not greater than 200% or less than 0%) equal to the sum of 100% plus the
product of (a) the difference equal to (i) the Company Total Stockholder Return
minus (ii) the Benchmark Index Total Return multiplied by either (b) 2 if such
difference is positive, 3 if such difference is negative, or 0 if the difference
is 0, as illustrated by Appendix A. Notwithstanding the foregoing, in no event
shall the Relative Return Factor exceed 100% with respect to either the First
Measurement Period or the Second Measurement Period or with respect to any
Measurement Period in which the Company Total Stockholder Return is a negative
number.

 

 

 

First Measurement Period Earned Units:

 

The number of First Measurement Period Earned Units, if any (not to exceed the
one-third of the Target Number of Units), shall equal the product of
(i) one-third of the Target Number of Units and (ii) the Relative Return Factor
determined for the First Measurement Period, as illustrated by Appendix A.

 

 

 

Second Measurement Period Earned Units:

 

The number of Second Measurement Period Earned Units, if any (not to exceed the
one-third of the Target Number of Units), shall equal the product of
(i) one-third of the Target Number of Units and (ii) the Relative Return Factor
determined for the Second Measurement Period, as illustrated by Appendix A.

 

 

 

Third Measurement Period Earned Units:

 

The number of Third Measurement Period Earned Units, if any (not to exceed
Maximum Number of Units), shall equal the product of (i) the Target Number of
Units and (ii) the Relative Return Factor determined for the Third Measurement
Period, as illustrated by Appendix A.

 

 

 

Earned Units:

 

The total number of Earned Units, if any (not to exceed the Maximum Number of
Units) for the Performance Period, are determined following completion of the
Performance Period and shall equal the sum of (i) the First Measurement Period
Earned Units plus (ii) the Second Measurement Period Earned Units plus (iii) the
excess, if any, of the Third Measurement Period Earned Units over the sum of the
First Measurement Period Earned Units and the Second Measurement Period Earned
Units.

 

 

 

Vesting Date:

 

[INSERT DATE], except as otherwise provided by the Award Agreement.

 

 

 

Vested Units:

 

Provided that the Participant’s Service (as defined in Section 5.1 of the Award
Agreement) has not terminated prior to the Vesting Date (except as otherwise
provided by the Award Agreement), the Earned Units, if any, shall become Vested
Units on the Vesting Date.

 

 

 

Settlement Date:

 

For each Vested Unit, except as otherwise provided by the Award Agreement, a
date occurring no later than ten (10) days following the Vesting Date.

 

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By his or her signature below or by electronic acceptance or authentication in a
form authorized by the Company, the Participant agrees to be bound by the terms
and conditions of the Plan, the Award Agreement, including the Addendum, and
this Grant Notice.  The Participant has reviewed the Award Agreement, the
Addendum, the Plan and this Grant Notice in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Grant Notice
and fully understands all provisions of this Grant Notice, the Award Agreement,
the Addendum and the Plan.  The Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions arising under the Plan or relating to the Units.

 

 

SILICON LABORATORIES INC.

 

PARTICIPANT

 

 

 

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

 

Title:

 

 

 

 

Address:

 

 

Address:

 

 

 

 

 

 

 

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APPENDIX A

 

ILLUSTRATION OF RELATIVE RETURN FACTOR AND RESULTING NUMBER OF EARNED UNITS

 

Percentage Point Difference of
Company TSR Over/Under
Benchmark Index Total Return

 

Relative Return 
Factor(1)

 

Earned Units
(Per 1,000 Target Units)

 

100

 

200.0

%

2,000

 

50

 

200.0

%

2,000

 

40

 

180.0

%

1,800

 

30

 

160.0

%

1,600

 

20

 

140.0

%

1,400

 

10

 

120.0

%

1,200

 

5

 

110.0

%

1,100

 

4

 

108.0

%

1,080

 

3

 

106.0

%

1,060

 

2

 

104.0

%

1,040

 

1

 

102.0

%

1,020

 

0

 

100.0

%

1,000

 

-1

 

97.0

%

970

 

-2

 

94.0

%

940

 

-3

 

91.0

%

910

 

-4

 

88.0

%

880

 

-5

 

85.0

%

850

 

-10

 

70.0

%

700

 

-20

 

40.0

%

400

 

-30

 

10.0

%

100

 

-33.34

 

0.0

%

0

 

-100

 

0.0

%

0

 

 

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(1)  The Relative Return Factor may not exceed 100% with respect to either the
First Measurement Period or the Second Measurement Period or with respect to any
Measurement Period in which the Company Total Stockholder Return is a negative
number.

 

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APPENDIX A CONTINUED

 

ILLUSTRATIONS OF CALCULATION OF MEASUREMENT PERIOD EARNED UNITS

PER 1,000 TARGET UNITS

 

Company Total Stockholder Return Exceeds Benchmark Index Total Return

 

Assumptions:

 

 

 

 

 

 

 

 

 

 

 

SLAB:

 

 

 

 

 

Average Per Share Closing Price (beginning)

 

 

 

$

36.87

 

Average Per Share Closing Price (ending)

 

 

 

$

46.02

 

 

 

 

 

 

 

XSOX:

 

 

 

 

 

Average Closing Index Value (beginning)

 

 

 

384.06

 

Average Closing Index Value (ending)

 

 

 

417.13

 

 

 

 

 

 

 

Computations:

 

 

 

 

 

 

 

 

 

 

 

Company Total Stockholder Return

 

((46.02 / 36.87) - 1) x 100

 

24.82

%

 

 

 

 

 

 

Benchmark Index Total Return

 

((417.13 / 384.06) - 1) x 100

 

8.61

%

 

 

 

 

 

 

Relative Return Factor

 

100 + (2 x (24.82 – 8.61))

 

132.42

%

 

 

 

 

 

 

Measurement Period Earned Units

 

1,000 x 132.42%

 

1,324

 

 

Company Total Stockholder Return Is Less Than Benchmark Index Total Return

 

Assumptions:

 

 

 

 

 

 

 

 

 

 

 

SLAB:

 

 

 

 

 

Average Per Share Closing Price (beginning)

 

 

 

$

44.30

 

Average Per Share Closing Price (ending)

 

 

 

$

34.65

 

 

 

 

 

 

 

XSOX:

 

 

 

 

 

Average Closing Index Value (beginning)

 

 

 

476.68

 

Average Closing Index Value (ending)

 

 

 

448.80

 

 

 

 

 

 

 

Computations:

 

 

 

 

 

 

 

 

 

 

 

Company Total Stockholder Return

 

((34.65 / 44.30) - 1) x 100

 

-21.78

%

 

 

 

 

 

 

Benchmark Index Total Return

 

((448.8 / 476.68) - 1) x 100

 

-5.85

%

 

 

 

 

 

 

Relative Return Factor

 

100 + (3 x (-21.78 - (-5.85))

 

47.79

%

 

 

 

 

 

 

Measurement Period Earned Units

 

1,000 x 47.79%

 

477

 

 

2

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APPENDIX B

 

ILLUSTRATION OF ADJUSTMENT TO AVERAGE PER SHARE CLOSING PRICE
TO REFLECT ASSUMED REINVESTMENT OF CASH DIVIDENDS AND DISTRIBUTIONS

 

1.                                      Assumptions:

 

·                  For the purposes of this illustration only, the averaging
periods for determination of the Average Per Share Closing Price and the Average
Closing Index Value are assumed to be the 10-day periods ending on the first day
of the Measurement Period and the last day of the Measurement Period.

·                  The Company declares and pays a quarterly cash dividend of
$0.20 per share throughout all periods relevant to this illustration, with
ex-dividend dates occurring each year on or about March 28, June 28,
September 28 and December 28.

·                  On the ex-dividend date, the dividend paid is reinvested to
purchase an additional fractional share.

·                  The Measurement Period begins on January 1, 2XX1 and ends on
December 31, 2XX3

 

2.                                      Calculate Average Per Share Closing
Price at the beginning of the Measurement Period.

 

On the ex-dividend date occurring on December 28, 2XX0, assume that the dividend
of $0.20 paid on one share is reinvested.  Compute an adjusted Average Per Share
Closing Price for the five trading days during the 10-day period ending
01/01/2XX1.

 

Trading Day

 

Closing Price

 

Dividend Paid

 

Shares
Purchased

 

Accumulated
Shares

 

Total
Accumulated
Value

 

12/24/2XX0

 

$

37.26

 

 

 

 

 

1.000

 

$

37.26

 

12/26/2XX0

 

$

37.32

 

 

 

 

 

1.000

 

$

37.32

 

12/27/2XX0

 

$

37.44

 

 

 

 

 

1.000

 

$

37.44

 

12/28/2XX0

 

$

37.67

 

$

0.20

 

.0053

 

1.0053

 

$

37.87

 

12/31/2XX0

 

$

37.43

 

 

 

 

 

1.0053

 

$

37.63

 

Average Per Share Closing Price with Dividends Reinvested

 

$

37.50

 

 

3.                                      Calculate Accumulated Shares During the
Measurement Period.

 

On each ex-dividend date during the Measurement Period, assume that the dividend
of $0.20 paid on one share is reinvested, and the fractional share is added to
the 1.0053 accumulated shares determined during the initial averaging period.

 

Ex-Dividend Date

 

Closing Price

 

Dividend Paid

 

Shares Purchased

 

Accumulated Shares

 

03/28/2XX1

 

$

31.13

 

$

0.20

 

.0064

 

1.0117

 

06/28/2XX1

 

$

36.46

 

$

0.20

 

.0055

 

1.0172

 

09/28/2XX1

 

$

31.08

 

$

0.20

 

.0064

 

1.0236

 

12/28/2XX1

 

$

23.67

 

$

0.20

 

.0084

 

1.0320

 

03/28/2XX2

 

$

26.96

 

$

0.20

 

.0074

 

1.0394

 

06/28/2XX2

 

$

38.75

 

$

0.20

 

.0052

 

1.0446

 

09/28/2XX2

 

$

46.49

 

$

0.20

 

.0043

 

1.0489

 

12/28/2XX2

 

$

47.97

 

$

0.20

 

.0042

 

1.0531

 

03/28/2XX3

 

$

47.72

 

$

0.20

 

.0042

 

1.0573

 

06/28/2XX3

 

$

43.50

 

$

0.20

 

.0046

 

1.0619

 

09/28/2XX3

 

$

37.55

 

$

0.20

 

.0053

 

1.0672

 

12/28/2XX3

 

$

46.13

 

$

0.20

 

.0043

 

1.0715

 

 

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4.                                      Calculate Average Per Share Closing
Price at the end of the Measurement Period.

 

On the ex-dividend date occurring on December 28, 2XX3, assume that the dividend
of $0.20 paid on one share is reinvested, and the fractional share is added to
the 1.0672 accumulated shares determined through the last ex-dividend date prior
to the final averaging period.  Compute an adjusted Average Per Share Closing
Price for the seven trading days during the 10-day period ending 12/31/2XX3.

 

Trading Day

 

Closing Price

 

Dividend Paid

 

Shares
Purchased

 

Accumulated
Shares

 

Total
Accumulated
Value

 

12/22/2XX3

 

$

46.93

 

 

 

 

 

1.0672

 

$

50.08

 

12/23/2XX3

 

$

46.45

 

 

 

 

 

1.0672

 

$

49.57

 

12/27/2XX3

 

$

46.55

 

 

 

 

 

1.0672

 

$

49.68

 

12/28/2XX3

 

$

46.13

 

$

0.20

 

.0043

 

1.0715

 

$

49.43

 

12/29/2XX3

 

$

46.11

 

 

 

 

 

1.0715

 

$

49.41

 

12/30/2XX3

 

$

46.28

 

 

 

 

 

1.0715

 

$

49.59

 

12/31/2XX3

 

$

46.02

 

 

 

 

 

1.0715

 

$

49.31

 

Average Per Share Closing Price with Dividends Reinvested

 

$

49.58

 

 

2

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SILICON LABORATORIES INC.

2009 STOCK INCENTIVE PLAN

 

GLOBAL MARKET STOCK UNITS AWARD AGREEMENT

 

Silicon Laboratories Inc. (the “Company”) has granted to the Participant named
in the Market Stock Units Grant Notice (the “Grant Notice”) to which this Market
Stock Units Award Agreement (this “Award Agreement”) is attached an Award
consisting of Market Stock Units (the “Units”) subject to the terms and
conditions set forth in the Grant Notice and this Award Agreement, including any
country-specific terms and conditions set forth in an addendum to such agreement
(the “Addendum”).  The Award has been granted pursuant to the Silicon
Laboratories Inc. 2009 Stock Incentive Plan, as amended and restated (the
“Plan”), as amended to the Grant Date, the provisions of which are incorporated
herein by reference.

 

Unless otherwise defined herein or in the Grant Notice, capitalized terms shall
have the meanings assigned under the Plan.

 

1.                                      THE AWARD.

 

The Company hereby awards to the Participant the Target Number of Units set
forth in the Grant Notice, which, depending on the extent to which a Performance
Goal (as described by Plan) is attained during the Performance Period, may
result in the Participant earning as little as zero (0) Units or as many as the
Maximum Number of Units.  Subject to the terms of this Award Agreement and the
Plan, each Unit, to the extent it is earned and becomes a Vested Unit,
represents a right to receive one (1) share of Common Stock (a “Share”) on the
Settlement Date.  If the Participant is or may be a Covered Employee, the Units
are intended to constitute Qualified Performance-Based Compensation.  Unless and
until a Unit has been determined to be an Earned Unit and has vested and become
a Vested Unit as set forth in the Grant Notice, the Participant will have no
right to settlement of such Units.  Prior to settlement of any Units, such Units
will represent an unfunded and unsecured obligation of the Company.

 

2.                                      MEASUREMENT OF PERFORMANCE CRITERIA.

 

The components of Performance Criteria shall be determined for each of the First
Measurement Period, Second Measurement Period and Third Measurement Period (each
a “Measurement Period”) in accordance with the following:

 

2.1                               “Company Total Stockholder Return” means the
percentage point increase or decrease in (a) the Average Per Share Closing Price
for the 90-day period ending on the last day of the Measurement Period over
(b) the Average Per Share Closing Price for the 90-day period ending on the
first day of the Measurement Period.

 

2.2                               “Average Per Share Closing Price” means the
average of the daily closing prices per Share as reported on the NASDAQ Stock
Market for all trading days falling within an applicable 90-day period described
in Section 2.1.  The Average Per Share Closing Price shall be adjusted in each
case to reflect an assumed reinvestment, as of the applicable ex-dividend date,
of all cash dividends and other cash distributions (excluding cash distributions
resulting from share repurchases or redemptions by the Company) paid to
stockholders, as applicable, during the 90-day period ending on the first day of
the Measurement Period and during the Measurement Period.  The method of
adjustment of the Average Per Share Closing Price to reflect the assumed
reinvestment of cash dividends and other cash distributions to stockholders is
illustrated in Appendix B to the Grant Notice.

 

--------------------------------------------------------------------------------

 

2.3                               “Benchmark Index Total Return” means the
percentage point increase or decrease in (a) the Average Closing Index Value for
the 90-day period ending on the last day of the Measurement Period over (b) the
Average Closing Index Value for the 90-day period ending on the first day of the
Measurement Period.

 

2.4                               “Average Closing Index Value” means the
average of the daily closing index values of the Benchmark Index as reported by
the NASDAQ OMX Group, Inc. for all trading days falling within an applicable
90-day period described in Section 2.3.

 

3.                                      COMMITTEE CERTIFICATION OF EARNED UNITS.

 

3.1                               Level of Performance Criteria Attained.  On or
before the Vesting Date following completion of the Performance Period, the
Committee shall determine and certify in writing (a) for each Measurement Period
(i) the level of attainment of the Performance Criteria during such Measurement
Period, (ii) the resulting Relative Return Factor for such Measurement Period
and (iii) the number of Units which have become Earned Units for such
Measurement Period, and (b) the total number of Units which have become Earned
Units for the entire Performance Period.  In the case of Units that are intended
to constitute Qualified Performance-Based Compensation, the Committee may not
increase the number of Units that may be eligible to become Earned Units to a
number that is greater than the number of Earned Units determined in accordance
with the foregoing sentence, but it retains the sole discretion to reduce the
number of Units that would otherwise be eligible to become Earned Units based on
the attainment level of the Performance Criteria.  For Units that are intended
to constitute Qualified Performance-Based Compensation, the Performance Criteria
may not be adjusted except as specified in Appendix B in accordance with the
requirements of Section 162(m) of the Code.  For Units that are not intended to
constitute Qualified Performance-Based Compensation, the Committee may make such
adjustment to the Performance Criteria as the Committee in its sole discretion
deems appropriate.

 

3.2                               Adjustment for Leave of Absence or Part-Time
Work.  Unless otherwise required by law or Company policy, if the Participant
takes a leave of absence or commences working on a part-time basis during the
Performance Period, the Committee may, in its discretion, reduce on a pro rata
basis (reflecting the portion of the Performance Period worked by the
Participant on a full-time equivalent basis) the number of Units which would
otherwise become Earned Units, or provide that the number of Units which would
otherwise become Earned Units shall be reduced as provided by the terms of an
agreement between the Participant and the Company pertaining to the
Participant’s leave of absence or part-time schedule.

 

4.                                      VESTING OF EARNED UNITS.

 

4.1                               Normal Vesting.  Except as otherwise provided
by this Award Agreement, Earned Units shall vest and become Vested Units as
provided in the Grant Notice.

 

4.2                               Vesting Upon a Change in Control.

 

(a)                                 In the event of a Change in Control before
the end of the Performance Period as set forth in the Grant Notice, the vesting
of Earned Units shall be determined in accordance with Section 9.1.

 

(b)                                 In the event of a Change in Control after
the end of the Performance Period as set forth in the Grant Notice but before
the Vesting Date as set forth in the Grant Notice, the vesting of Earned Units
shall be determined in accordance with Section 9.2.

 

2

--------------------------------------------------------------------------------

 

4.3                               Vesting Upon Involuntary Termination Following
a Change in Control.  In the event that upon or within eighteen (18) months
following the effective date of a Change in Control, the Participant’s Service
(as defined in Section 5.1 below) terminates due to Involuntary Termination, the
vesting of Earned Units shall be determined in accordance with Section 9.3.

 

5.                                      TERMINATION OF SERVICE.

 

5.1                               General Rule.  In the event that prior to the
Vesting Date the Participant ceases to provide services to the Company (or any
Subsidiary or Affiliate) in the capacity of an Employee, Director or Consultant
(collectively referred to herein as “Service”) for any reason, with or without
cause, other than by reason of the Participant’s termination of Service
described in Section 4.3, the Participant shall forfeit all Units which are not,
as of the time of such termination, Vested Units, and the Participant shall not
be entitled to any payment therefor.

 

5.2                               Determination of Termination Date.  For
purposes of this Award Agreement, the date of termination of the Participant’s
Service shall be the date upon which the Participant ceases active performance
of services for the Company, a Subsidiary or Affiliate, as determined by the
Company following the provision of such notification of termination or
resignation from Service and shall be determined solely by this Award Agreement
and without reference to any other agreement, written or oral, including the
Participant’s contract of employment (if any).  Thus, in the event of
termination of the Participant’s Service (regardless of the reason for such
termination and whether or not later to be found invalid or in breach of
employment laws in the jurisdiction where the Participant is employed or the
terms of the Participant’s employment contract, if any), and unless otherwise
expressly provided in this Agreement or determined by the Company, the
Participant’s right to vest in the Units under the Plan, if any, will terminate
as of such date and will not be extended by any notice period (e.g., the
Participant’s period of Service would not include any contractual notice period
or any period of “garden leave” or similar period mandated under employment laws
in the jurisdiction where the Participant is employed or the terms of the
Participant’s employment contract, if any).  The Committee shall have the
exclusive discretion to determine when the Participant is no longer actively
providing services for purposes of this Award Agreement (including whether the
Participant may still be considered to be providing services while on a leave of
absence).

 

6.                                      SETTLEMENT OF THE AWARD.

 

6.1                               Issuance of Shares of Common Stock.  Subject
to the provisions of Section 6.3, Section 7 and Section 9.2 below, the Company
shall issue to the Participant on the Settlement Date with respect to each
Vested Unit to be settled on such date one (1) Share.  Shares issued in
settlement of Vested Units shall not be subject to any restriction on transfer
other than any such restriction as may be required pursuant to Section 6.3.

 

6.2                               Beneficial Ownership of Shares; Certificate
Registration.  The Participant hereby authorizes the Company, in its sole
discretion, to deposit for the benefit of the Participant with a
Company-designated brokerage firm or, at the Company’s discretion, any other
broker with which the Participant has an account relationship of which the
Company has notice any or all Shares acquired by the Participant pursuant to the
settlement of the Award.  Except as provided by the preceding sentence, a
certificate for the Shares as to which the Award is settled shall be registered
in the name of the Participant.

 

3

--------------------------------------------------------------------------------

 

6.3                               Restrictions on Grant of the Award and
Issuance of Shares.  The grant of the Award and issuance of shares of Common
Stock upon settlement of the Award shall be subject to compliance with all
applicable requirements of U.S. federal, state or foreign law with respect to
such securities.  No Shares may be issued hereunder if the issuance of such
Shares would constitute a violation of any applicable U.S. federal, state or
foreign securities laws or other laws or regulations or the requirements of any
stock exchange or market system upon which the Common Stock may then be listed. 
The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance of any Shares subject to the Award shall
relieve the Company of any liability in respect of the failure to issue such
Shares as to which such requisite authority shall not have been obtained.  As a
condition to the settlement of the Award, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate,
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Company.  Further, regardless of whether the transfer or issuance of the Shares
to be issued pursuant to the Units has been registered under the Securities Act
or has been registered or qualified under the securities laws of any State, the
Company may impose additional restrictions upon the sale, pledge, or other
transfer of the Shares (including the placement of appropriate legends on stock
certificates and the issuance of stop-transfer instructions to the Company’s
transfer agent) if, in the judgment of the Company and the Company’s counsel,
such restrictions are necessary in order to achieve compliance with the
provisions of the Securities Act, the securities laws of any State, or any other
law.

 

6.4                               Fractional Shares.  The Company shall not be
required to issue fractional Shares upon the settlement of the Award.

 

7.                                      TAX WITHHOLDING AND ADVICE.

 

7.1                               In General.  The Participant acknowledges
that, regardless of any action taken by the Company or, if different, the
Participant’s employer (the “Employer”), the ultimate liability for all income
tax, social insurance, payroll tax, fringe benefits tax, payment on account or
other tax-related items related to the Participant’s participation in the Plan
and legally applicable to the Participant or deemed by the Company or the
Employer in its discretion to be an appropriate charge to the Participant even
if legally applicable to the Company or the Employer (“Tax-Related Items”), is
and remains the Participant’s responsibility and may exceed the amount actually
withheld by the Company or the Employer.  The Participant further acknowledges
that the Company and/or the Employer (i) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect
of the Units, including, but not limited to, the grant, vesting or settlement of
the Units, the subsequent sale of Shares acquired pursuant to such settlement
and the receipt of any dividends; and (ii) do not commit to and are under no
obligation to structure the terms of the grant or any aspect of the Units to
reduce or eliminate the Participant’s liability for Tax-Related Items or achieve
any particular tax result.  Further, if the Participant is subject to
Tax-Related Items in more than one jurisdiction between the Grant Date and the
date of any relevant taxable or tax withholding event, as applicable, the
Participant acknowledges that the Company and/or the Employer (or former
employer, as applicable) may be required to withhold or account for Tax-Related
Items in more than one jurisdiction.

 

7.2                               Withholding of Taxes.  Prior to any relevant
taxable or tax withholding event, as applicable, the Participant agrees to make
adequate arrangements satisfactory to the Company and/or the Employer to satisfy
all Tax-Related Items (including hypothetical withholding tax amounts if the
Participant is covered under a Company tax equalization policy).  In this
regard, the Participant authorizes the Company or its agent to satisfy the
obligations with regard to all Tax-Related Items by withholding in Shares to be
issued upon settlement of the Units.  In the event that such withholding in
Shares is problematic under applicable tax or securities law or has materially
adverse accounting consequences, by the Participant’s acceptance of the Units,
the Participant authorizes and directs the Company and any brokerage firm
determined acceptable to the Company to sell on the Participant’s behalf a whole
number of Shares from those Shares issued to the Participant as the Company
determines to be appropriate to generate cash proceeds sufficient to satisfy the
obligation for Tax-Related Items.

 

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Depending on the withholding method, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding rates
or other applicable withholding rates, including maximum applicable rates, in
which case the Participant will receive a refund of any over-withheld amount in
cash and will have no entitlement to the Common Stock equivalent.  If the
obligation for Tax-Related Items is satisfied by withholding in Shares, for tax
purposes, the Participant is deemed to have been issued the full number of
Shares subject to the vested Units, notwithstanding that a number of the Shares
are held back solely for the purpose of paying the Tax-Related Items .

 

If the Participant is covered by a Company tax equalization policy, the
Participant agrees to pay to the Company any additional hypothetical tax
obligation calculated and paid under the terms and conditions of such tax
equalization policy.  Finally, the Participant agrees to pay to the Company or
the Employer, including through direct payment from the Participant and/or
withholding from the Participant’s wages or other cash compensation paid to the
Participant by the Company and/or the Employer any amount of Tax-Related Items
that the Company or the Employer may be required to withhold or account for as a
result of the Participant’s participation in the Plan that cannot be satisfied
by the means previously described.  The Company may refuse to issue or deliver
the Shares or the proceeds of the sale of Shares, if the Participant fails to
comply with the Participant’s obligations in connection with the Tax-Related
Items.

 

7.3                               Tax Advice.  The Participant represents,
warrants and acknowledges that the Company has made no warranties or
representations to the Participant with respect to the income tax, social
contributions or other tax consequences of the transactions contemplated by this
Award Agreement, and the Participant is in no manner relying on the Company or
the Company’s representatives for an assessment of such tax consequences.  THE
PARTICIPANT UNDERSTANDS THAT THE TAX AND SOCIAL SECURITY LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE.  THE PARTICIPANT IS HEREBY ADVISED TO CONSULT WITH HIS OR
HER OWN PERSONAL TAX, LEGAL AND FINANCIAL ADVISORS REGARDING THE PARTICIPANT’S
PARTICIPATION IN THE PLAN BEFORE TAKING ANY ACTION RELATED TO THE PLAN. NOTHING
STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE
PURPOSE OF AVOIDING TAXPAYER PENALTIES.

 

8.                                      AUTHORIZATION TO RELEASE NECESSARY
PERSONAL INFORMATION.

 

The Participant hereby explicitly and unambiguously consents to the collection,
use and transfer, in electronic or other form, of the Participant’s personal
data as described in this Award Agreement, the Appendix and any other Award
grant materials (“Data”) by and among, as applicable, the Employer, the Company
and its Subsidiaries and Affiliates for the exclusive purpose of implementing,
administering and managing the Participant’s participation in the Plan.

 

The Participant understands that the Company and the Employer may hold certain
personal information about the Participant, including, but not limited to, the
Participant’s name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any Shares or directorships held in the Company, details of all Units or any
other entitlement to Shares awarded, canceled, exercised, vested, unvested or
outstanding in the Participant’s favor, for the exclusive purpose of
implementing, administering and managing the Plan.

 

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The Company’s equity compensation plan recordkeeper is Fidelity Stock Plan
Services, LLC (the “Recordkeeper”).  The Participant understands that Data will
be transferred to the Recordkeeper or such other stock plan service provider as
may be selected by the Company in the future, which is assisting the Company
with the implementation, administration and management of the Plan.  The
Participant understands that the recipients of the Data may be located in the
United States or elsewhere, and that the recipients’ country (e.g., the United
States) may have different data privacy laws and protections than the
Participant’s country.  The Participant understands that if he or she resides
outside the United States, he or she may request a list with the names and
addresses of any potential recipients of the Data by contacting the Company’s
stock administration department.  The Participant authorizes the Company, the
Recordkeeper and any other possible recipients which may assist the Company
(presently or in the future) with implementing, administering and managing the
Plan to receive, possess, use, retain and transfer the Data, in electronic or
other form, for the sole purpose of implementing, administering and managing his
or her participation in the Plan.  The Participant understands that Data will be
held only as long as is necessary to implement, administer and manage the
Participant’s participation in the Plan.  The Participant understands if he or
she resides outside the United States, he or she may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data or refuse or withdraw the consents herein, in
any case without cost, by contacting in writing the Company’s stock
administration department.  Further, the Participant understands that he or she
is providing the consents herein on a purely voluntary basis.  If the
Participant  does not consent, or if the Participant later seeks to revoke his
or her consent, his or her employment status or service and career with the
Employer will not be adversely affected; the only adverse consequence of
refusing or withdrawing the Participant’s consent is that the Company would not
be able to grant the Participant Units or other equity awards or administer or
maintain such awards.  Therefore, the Participant understands that refusing or
withdrawing his or her consent may affect the Participant’s ability to
participate in the Plan.  For more information on the consequences of the
Participant’s refusal to consent or withdrawal of consent, the Participant
understands that he or she may contact the Company’s stock administration
department.

 

9.                                      CHANGE IN CONTROL.

 

9.1                               Effect on Award of Change in Control Before
End of Performance Period.  In the event of a Change in Control before the end
of the Performance Period as set forth in the Grant Notice, the Performance
Period shall end on the day immediately preceding the Change in Control (the
“Adjusted Performance Period”) and the then current Measurement Period (whether
the First, Second or Third Measurement Period) shall be deemed to be the Third
Measurement Period and shall end on the last day of the Adjusted Performance
Period.  The number of Earned Units and the vesting of those Units shall be
determined for the Adjusted Performance Period in accordance with the following:

 

(a)                                 Earned Units.  The total number of Earned
Units for the Adjusted Performance Period, if any (not to exceed the Maximum
Number of Units), shall equal the sum of (i) the First Measurement Period Earned
Units (but only if the First Measurement Period ended prior to the last day of
the Adjusted Performance Period) plus (ii) the Second Measurement Period Earned
Units (but only if the Second Measurement Period ended prior to the last day of
the Adjusted Performance Period) plus (iii) the excess, if any, of the Third
Measurement Period Earned Units over the sum of the First Measurement Period
Units (if applicable) and the Second Measurement Period Units (if applicable). 
In the Committee’s determination of the number of Earned Units for the Adjusted
Performance Period, the following modifications shall be made to the components
of the Relative Return Factor for the Third Measurement Period deemed to end on
the last day of the Adjusted Performance Period:

 

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(i)                                     The Company Total Stockholder Return
shall be determined as provided by Section 2.1, except that the Average Per
Share Closing Price for the 90-day period ending on the last day of the Adjusted
Performance Period shall be replaced with the price per Share to be paid to the
holder thereof in accordance with the definitive agreement governing the
transaction constituting the Change in Control (or, in the absence of such
agreement, the closing price per Share as reported on the NASDAQ Stock Market
for the last trading day of the Adjusted Performance Period), adjusted to
reflect an assumed reinvestment, as of the applicable ex-dividend date, of all
cash dividends and other cash distributions (excluding cash distributions
resulting from share repurchases or redemptions by the Company) paid to
stockholders during the Adjusted Performance Period, as illustrated in Appendix
B to the Grant Notice.

 

(ii)                                  The Benchmark Index Total Return shall be
determined as provided by Section 2.3, except that for the purposes of clause
(a) thereof, the Average Closing Index Value shall be determined for the 90-day
period ending on the last day of the Adjusted Performance Period.

 

(b)                                 Vested Units if Award Assumed.  In the event
of a Change in Control before the end of the Performance Period in connection
with which the Award will be assumed or replaced with a substitute Award, as
described in Section 11 of the Plan, then, as of the last day of the Adjusted
Performance Period and provided that the Participant’s Service has not
terminated prior to such date, a portion of the Earned Units determined in
accordance with Section 9.1(a) shall become Vested Units (the “Accelerated
Units”), with such portion determined by multiplying the total number of Earned
Units by a fraction, the numerator of which equals the number of days contained
in the Adjusted Performance Period and the denominator of which equals the
number of days contained in the original Performance Period determined without
regard to this Section.  The Accelerated Units shall be settled in accordance
Section 6 immediately prior to the consummation of the Change in Control. 
Except as otherwise provided by Section 9.3, that portion of the Earned Units
determined in accordance with Section 9.1(a) in excess of the number of
Accelerated Units shall become Vested Units on the Vesting Date of the original
Performance Period determined without regard to this Section, provided that the
Participant’s Service has not terminated prior to such Vesting Date.  Such
Vested Units shall be settled on the Settlement Date in accordance with
Section 6, provided that payment for each Vested Unit shall be made in the
amount and in the form of the consideration (whether stock, cash, other
securities or property or a combination thereof) to which a holder of a Share on
the effective date of the Change in Control was entitled (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares).

 

(c)                                  Vested Units if Award Not Assumed.  In the
event of a Change in Control before the end of the Performance Period in
connection with which the Award will not be assumed or replaced with a
substitute Award, as described in Section 11 of the Plan, then, as of the last
day of the Adjusted Performance Period and provided that the Participant’s
Service has not terminated prior to such date, all of the Earned Units
determined in accordance with Section 9.1(a) shall become Vested Units and shall
be settled in accordance Section 6 immediately prior to the consummation of the
Change in Control.

 

9.2                               Effect on Award of Change in Control After End
of Performance Period But Before Vesting Date.  In the event of a Change in
Control upon or after the end of the Performance Period but before the Vesting
Date, each as set forth in the Grant Notice, the number of Earned Units
determined in accordance with the Grant Notice shall become Vested Units and
shall be settled in accordance Section 6 immediately prior to the consummation
of the Change in Control, provided that the Participant’s Service has not
previously terminated.

 

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9.3                               Involuntary Termination Following Change in
Control.  In the event that upon or within eighteen (18) months following the
effective date of the Change in Control, the Participant’s Service terminates
due to Involuntary Termination, then all Earned Units that have not previously
become Vested Units, if any, shall be deemed Vested Units effective as of the
effective date of the Participant’s Involuntary Termination (as determined in
accordance with Section 9.4) and shall be settled in accordance with Section 6,
treating the date of the Participant’s termination of Service as the Vesting
Date, and provided that payment for each Vested Unit shall be made in the amount
and in the form of the consideration (whether stock, cash, other securities or
property or a combination thereof) to which a holder of a Share on the effective
date of the Change in Control was entitled (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares).  Vested Units vested as a result of the
Participant’s Involuntary Termination shall be settled in accordance with
Section 6 on the 60th day following the date of the Participant’s termination of
employment or service provided that the Participant has signed a full general
release in a form prepared by or otherwise acceptable to Company, releasing all
claims, known or unknown, that the Participant may have against Company and its
officers, directors, employees and affiliated companies, arising out of or in
any way related to the Participant’s employment or service or termination of
employment or service with Company and the period for revocation, if any, of
such release has lapsed on or before such 60th day without the release having
been revoked.  In the event that such release does not become effective in
accordance with its terms on or before the 60th day following the date of the
Participant’s termination of employment or service, the Participant shall
forfeit, without compensation therefor, any Earned Units that were deemed vested
as a result of the Participant’s Involuntary Termination.

 

9.4                               “Involuntary Termination” shall mean the
termination of the employment or service of any Participant which occurs by
reason of:

 

(a)                                 such Participant’s involuntary dismissal or
discharge by the Company or a Subsidiary or Affiliate for reasons other than
Misconduct, or

 

(b)                                 such Participant’s voluntary resignation
following the initial existence of any of the following conditions: (A) a
material diminution in the Participant’s authority, duties or responsibilities,
(B) a material diminution in the Participant’s (i) base salary (including,
without limitation, a reduction of base salary by more than 10%) or (ii) total
cash compensation (including base salary and target bonus potential (including,
without limitation, a reduction of total target cash compensation by more than
10%), (C) a material change in the geographic location at which the Participant
must perform the services (including, without limitation, a change in the
Participant’s assigned workplace that increases the Participant’s one-way
commute by more than 35 miles), provided and only if such diminution or change
is effected by the Company without the Participant’s written consent.  No
voluntary resignation by the Participant shall be treated as an Involuntary
Termination pursuant to this Section 9.3(b) unless the Participant gives written
notice to the Committee advising the Company of such intended resignation (along
with the facts and circumstances constituting the condition asserted as the
reason for such resignation) within 30 days after the time the Participant
becomes aware of the existence of such condition and provides the Company a cure
period of 30 days following such date that notice is delivered.  If the
Committee determines that the asserted condition exists and the Company does not
cure such condition within the 30-day cure period, the Participant’s termination
of employment or service shall be effective on such 30th day of the cure period.

 

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10.                               ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

 

The number of Units awarded pursuant to this Award Agreement (both the Target
Number of Units and Maximum Number of Units) is subject to adjustment as
provided in Article 11 of the Plan.  Upon the occurrence of an event described
in Article 11 of the Plan, any and all new, substituted or additional securities
or other property to which a holder of a Share issuable in settlement of the
Award would be entitled shall be immediately subject to the Award Agreement and
included within the meaning of the term “Shares” for all purposes of the Award. 
The Participant shall be notified of such adjustments and such adjustments shall
be binding upon the Company and the Participant.

 

11.                               NO ENTITLEMENT OR CLAIMS FOR COMPENSATION.

 

11.1                        Nature of the Grant.  In accepting the Award, the
Participant acknowledges, understands and agrees that:

 

(a)                                 the Plan is established voluntarily by the
Company, it is discretionary in nature and it may be modified, amended,
suspended or terminated by the Company at any time, to the extent permitted by
the Plan;

 

(b)                                 the grant of the Units is voluntary and
occasional and does not create any contractual or other right to receive future
grants of Units, or benefits in lieu of Units, even if Units have been granted
in the past;

 

(c)                                  all decisions with respect to future Units
or other grants, if any, will be at the sole discretion of the Company;

 

(d)                                 the Units grant and the Participant’s
participation in the Plan shall not create a right to employment or be
interpreted as forming an employment or services contract with the Company, the
Employer or any Subsidiary or Affiliate and shall not interfere with the ability
of the Company, the Employer or any Subsidiary or Affiliate, as applicable, to
terminate the Participant’s employment or service relationship (if any);

 

(e)                                  the Participant is voluntarily
participating in the Plan;

 

(f)                                   the Units and the Shares subject to the
Units are not intended to replace any pension rights or compensation;

 

(g)                                  the Units and the Shares subject to the
Units, and the income and value of same, are not part of normal or expected
compensation for purposes of calculating any severance, resignation,
termination, redundancy, dismissal, end-of-service payments, bonuses,
long-service awards, pension or retirement or welfare benefits or similar
payments;

 

(h)                                 the future value of the underlying Shares is
unknown, indeterminable and cannot be predicted with certainty;

 

(i)                                     no claim or entitlement to compensation
or damages shall arise from forfeiture of the Units resulting from the
termination of the Participant’s employment or other service relationship (for
any reason whatsoever whether or not later found to be invalid or in breach of
employment laws in the jurisdiction where the Participant is employed or the
terms of the Participant’s employment contract, if any), and in consideration of
the grant of the Units to which the Participant is otherwise not entitled, the
Participant irrevocably agrees never to institute any claim against the Company,
any of its Subsidiaries or Affiliates or the Employer, waives his or her
ability, if any, to bring any such claim, and releases the Company, its
Subsidiaries and Affiliates and the Employer from any such claim; if,
notwithstanding the foregoing, any such claim is allowed by a court of competent
jurisdiction, then, by participating in the Plan, the Participant shall be
deemed irrevocably to have agreed not to pursue such claim and agrees to execute
any and all documents necessary to request dismissal or withdrawal of such
claim;

 

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(j)                                    unless otherwise provided in the Plan or
determined by the Company in its discretion, the Units and the benefits
evidenced by this Award Agreement do not create any entitlement to have the
Units or any such benefits transferred to, or assumed by, another company nor be
exchanged, cashed out or substituted for, in connection with any corporate
transaction affecting the shares of the Company; and

 

(k)                                 the following provisions apply only if the
Participant is providing services outside the United States:

 

(i)             the Units and the Shares subject to the Units are not part of
normal or expected compensation or salary for any purpose; and

 

(ii)          the Participant acknowledges and agrees that neither the Company,
the Employer nor any Subsidiary or Affiliate shall be liable for any foreign
exchange rate fluctuation between the Participant’s local currency and the
United States Dollar that may affect the value of the Units or of any amounts
due to the Participant pursuant to the settlement of the Units or the subsequent
sale of any Shares acquired upon settlement.

 

12.                               RIGHTS AS A STOCKHOLDER.

 

The Participant shall have no rights as a stockholder with respect to any Shares
which may be issued in settlement of this Award until the date of the issuance
of a certificate for such Shares or the deposit of such Shares in a brokerage
account (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company).  No adjustment shall be made
for dividends, distributions or other rights for which the record date is prior
to the date the Shares are issued, except as provided in Section 10.

 

13.                               MISCELLANEOUS PROVISIONS.

 

13.1                        Amendment.  The Committee may amend this Award
Agreement at any time; provided, however, that no such amendment may adversely
affect the Participant’s rights under this Award Agreement without the consent
of the Participant, except to the extent such amendment is desirable or
necessary to comply with applicable law, including, but not limited to, Code
Section 409A as further provided in the Plan.  No amendment or addition to this
Award Agreement shall be effective unless in writing.

 

13.2                        Nontransferability of the Award.  Prior to the
issuance of Shares on the applicable Settlement Date, no right or interest of
the Participant in the Award nor any Shares issuable on settlement of the Award
shall be in any manner pledged, encumbered, or hypothecated to or in favor of
any party other than the Company or a Subsidiary or Affiliate or shall become
subject to any lien, obligation, or liability of such Participant to any other
party other than the Company, or a Subsidiary or Affiliate.  Except as otherwise
provided by the Committee, no Award shall be assigned, transferred or otherwise
disposed of other than by will or the laws of descent and distribution.  All
rights with respect to the Award shall be exercisable during the Participant’s
lifetime only by the Participant or the Participant’s guardian or legal
representative.

 

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13.3                        Further Instruments and Imposition of Other
Requirements.  The parties hereto agree to execute such further instruments and
to take such further action as may reasonably be necessary to carry out the
intent of this Award Agreement.  The Company reserves the right to impose other
requirements on Participant’s participation in the Plan, on the Units and on any
Shares acquired under the Plan, to the extent the Company determines it is
necessary or advisable in order to comply with local law or facilitate the
administration of the Plan.  Furthermore, the Participant acknowledges that the
laws of the country in which the Participant is working at the time of grant,
vesting and settlement of the Units or the sale of Shares received pursuant to
this Award Agreement (including any rules or regulations governing securities,
foreign exchange, tax, labor, or other matters) may subject the Participant to
additional procedural or regulatory requirements that the Participant is and
will be solely responsible for and must fulfill.

 

13.4                        Binding Effect.  This Award Agreement shall inure to
the benefit of the successors and assigns of the Company and, subject to the
restrictions on transfer set forth herein, be binding upon the Participant and
the Participant’s heirs, executors, administrators, successors and assigns.

 

13.5                        Notices.  Any notice required to be given or
delivered to the Company under the terms of this Award Agreement shall be in
writing and addressed to the Company at its principal corporate offices.  Any
notice required to be given or delivered to the Participant shall be in writing
and addressed to the Participant at the address maintained for the Participant
in the Company’s records or at the address of the local office of the Company or
of a Subsidiary or Affiliate at which the Participant works.

 

13.6                        Construction of Award Agreement.  The Grant Notice,
this Award Agreement, and the Units evidenced hereby (i) are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms
of the Plan, and (ii) constitute the entire agreement between the Participant
and the Company on the subject matter hereof and supersede all proposals,
written or oral, and all other communications between the parties related to the
subject matter.  All decisions of the Committee with respect to any question or
issue arising under the Grant Notice, this Award Agreement or the Plan shall be
conclusive and binding on all persons having an interest in the Units.

 

13.7                        Governing Law and Venue.  The interpretation,
performance and enforcement of this Award Agreement shall be governed by the
laws of the State of Texas, U.S.A. without regard to the conflict-of-laws
rules thereof or of any other jurisdiction.  For purposes of litigating any
dispute that arises under this grant or this Award Agreement, the parties hereby
submit to and consent to the jurisdiction of the State of Texas, agree that such
litigation shall be conducted in the courts of Travis County, Texas, or the
federal courts for the United States for the Western District of Texas, where
this grant is made and/or to be performed.

 

13.8                        Section 409A.

 

(a)                                 Compliance with Code Section 409A. 
Notwithstanding any other provision of the Plan, this Award Agreement or the
Grant Notice, the Plan, this Award Agreement and the Grant Notice shall be
interpreted in accordance with, and incorporate the terms and conditions
required by, Code Section 409A (together with any Department of Treasury
regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued after the
date hereof).  The vesting and settlement of Units awarded pursuant to this
Award Agreement are intended to qualify for the “short-term deferral” exemption
from Section 409A of the Code and the terms of this Award Agreement shall be
interpreted in compliance with this intention.  The Company reserves the right,
to the extent the Company deems necessary or advisable in its sole discretion,
to unilaterally amend or modify the Plan and/or this Award Agreement or the
Grant Notice or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
including amendments or actions that would result in a reduction in benefits
payable under the Award, as the Committee determines are necessary or
appropriate to ensure that the Units qualify for exemption from or comply with
Code Section 409A or mitigate any additional tax, interest and/or penalties or
other adverse tax consequences that may apply under Section 409A of the Code;
provided, however, that the Company makes no representations that the Units will
be exempt from Code Section 409A and makes no undertaking to preclude Code
Section 409A from applying to the Units.

 

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(b)                                 Separation from Service; Required Delay in
Payment to Specified Employee.  Notwithstanding anything set forth herein to the
contrary, if the Participant is a U.S. taxpayer, no amount payable pursuant to
this Agreement on account of the Participant’s termination of Service which
constitutes a “deferral of compensation” within the meaning of Code Section 409A
shall be paid unless and until the Participant has incurred a “separation from
service” within the meaning of Code Section 409A.  Furthermore, to the extent
that the Participant is a “specified employee” within the meaning of Code
Section 409A as of the date of the Participant’s separation from service, no
amount that constitutes a deferral of compensation which is payable on account
of the Participant’s separation from service shall paid to the Participant
before the date (the “Delayed Payment Date”) which is the first day of the
seventh month after the date of the Participant’s separation from service or, if
earlier, the date of the Participant’s death following such separation from
service.  All such amounts that would, but for this Section, become payable
prior to the Delayed Payment Date will be accumulated and paid on the Delayed
Payment Date.

 

13.9                        Administration.  The Committee shall have the power
to interpret the Plan and this Award Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules.  All actions taken
and all interpretations and determinations made by the Committee in good faith
shall be final and binding upon the Participant, the Company and all other
interested persons.  No member of the Committee or the Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, this Award Agreement or the Units.

 

13.10                 Counterparts.  The Grant Notice may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

13.11                 Severability.  If any provision of this Award Agreement is
held to be unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties to the extent
possible.  In any event, all other provisions of this Award Agreement shall be
deemed valid and enforceable to the full extent possible.

 

13.12                 Language.  If the Participant has received this Award
Agreement or any other document related to the Plan in a language other than
English and the meaning of the translated version is different from the English
version, the English version will control.

 

13.13                 Electronic Delivery and Acceptance.  The Company may, in
its sole discretion, decide to deliver any documents related to current or
future participation in the Plan by electronic means.  The Participant hereby
consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an online or electronic system established and
maintained by the Company or a third party designated by the Company.

 

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13.14                 Waiver.  The Participant acknowledges that a waiver by the
Company of breach of any provision of this Award Agreement shall not operate or
be construed as a waiver of any other provision of this Award Agreement, or of
any subsequent breach by the Participant or any other award recipient.

 

13.15                 Addendum.  Notwithstanding any provisions in this Award
Agreement, the grant of Units shall be subject to any special terms and
conditions set forth in any Addendum to this Award Agreement for the
Participant’s country of residence.  Moreover, if the Participant relocates to
one of the countries included in the Addendum, the special terms and conditions
for such country will apply to the Participant, to the extent the Company
determines that the application of such terms and conditions is necessary or
advisable for legal or administrative reasons and, in such event, the Company
reserves the right to require the Participant to sign any additional agreements
or undertakings that may be necessary to accomplish the foregoing.  The Addendum
is hereby incorporated by reference as part of this Award Agreement.

 

13.16                 Clawback/Recovery.  The Units and any Shares, cash or
other property issued in settlement of the Units will be subject to recoupment
in accordance with any clawback policy that the Company is required to adopt
pursuant to the listing standards of any national securities exchange or
association on which the Company’s securities are listed or as is otherwise
required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or
other applicable law.  In addition, the Committee may impose such other
clawback, recovery or recoupment provisions on an Award as the Committee
determines necessary or appropriate, including, but not limited to, a
reacquisition right in respect of previously acquired Shares or other cash or
property upon the occurrence of cause (as determined by the Committee).

 

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SILICON LABORATORIES INC.

2009 STOCK INCENTIVE PLAN

 

ADDENDUM TO

GLOBAL MARKET STOCK UNITS AWARD AGREEMENT

 

Terms and Conditions

 

This Addendum includes additional terms and conditions that govern the award of
market stock units (“Units”) to the Participant by Silicon Laboratories Inc.
(the “Company”) under the Silicon Laboratories Inc. 2009 Stock Incentive Plan,
as amended and restated (the “Plan”) if the Participant resides in one of the
countries listed below.  Capitalized terms not explicitly defined in this
Addendum but defined in the Plan or the Global Market Stock Units Award
Agreement (the “Award Agreement”) shall have the same definitions as in the
Plan, the Grant Notice and/or the Award Agreement, as applicable.

 

Notifications

 

This Addendum also includes information regarding exchange control and other
issues of which the Participant should be aware with respect to the
Participant’s participation in the Plan.  The information is based on the
exchange control, securities and other laws in effect in the respective
countries as of October 2013.  Such laws are often complex and change
frequently.  As a result, the Company strongly recommends that the Participant
not rely on the information herein as the only source of information relating to
the consequences of participation in the Plan because the information may be out
of date at the time that the Units vest or the shares of the common stock
(“Shares”) are sold.

 

In addition, the information contained herein is general in nature and may not
apply to the Participant’s particular situation and the Company is not in a
position to assure the Participant of a particular result.  Accordingly, the
Participant is advised to seek appropriate professional advice as to how the
relevant laws in the Participant’s country may apply to the Participant’s
situation.

 

Finally, the Participant understands that if he or she is a citizen or resident
of a country other than the one in which the Participant is currently working,
transfers employment after the Grant Date, or is considered a resident of
another country for local law purposes, the information contained herein may not
apply to the Participant, and the Company shall, in its discretion, determine to
what extent the terms and conditions contained herein shall apply.

 

UNITED STATES

 

Terms and Conditions

 

Death of the Participant.  Notwithstanding Sections 5.1 and 5.2 of the Award
Agreement, if the Participant ceases Service prior to the Vesting Date by reason
of his or her death prior to the Vesting Date, the Participant shall not forfeit
the Award.  In such case, the number of Earned Units shall be determined as of
the end of the Performance Period in accordance with Section 3, and all such
Earned Units shall be deemed Vested Units upon the Committee’s certification in
accordance with Section 3.1 and settled in accordance with Section 6 as if the
Participant’s Service had continued through the Vesting Date.  The Shares due in
settlement of such Vested Units shall be issued to the personal representative
of the Participant’s estate, the person or persons to whom the Award is
transferred pursuant to the Participant’s will or in accordance with the laws of
descent and distribution (collectively referred to herein as the “Participant’s
Heirs”).  If the Participant dies prior to the end of an Adjusted Performance
Period (as described in Section 9.1), which becomes applicable as a result of a
Change in Control occurring before the end of the Performance Period as set
forth in the Grant Notice, then the number of Earned Units will be determined as
of the end of the Adjusted Performance Period in accordance with Section 9.1(a),
and all such Earned Units shall be deemed Vested Units upon the Committee’s
certification in accordance with Section 3.1 and settled in accordance with
Section 6 immediately prior to the consummation of the Change in Control.

 

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Issuance of Shares of Common Stock.  The following sentence replaces the first
sentence in Section 6.1 of the Award Agreement.

 

Subject to the provisions of Section 6.3 and Section 7 below, the Company shall
issue to the Participant (or, if applicable, the Participant’s Heirs), on the
Settlement Date with respect to each Vested Unit to be settled on such date one
(1) Share.

 

Beneficial Ownership of Shares; Certificate Registration.  The following
sentence replaces the last sentence in Section 6.2 of the Award Agreement.

 

Except as provided by the preceding sentence, a certificate for the Shares as to
which the Award is settled shall be registered in the name of the Participant,
or, if applicable, in the names of the Participant’s Heirs.

 

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