[psuawardagreementwtscs04001.jpg]
PERFORMANCE SHARE AWARD AGREEMENT Draft 04.25.18 Participant: [Name] Award
Number: PU_________ Plan: 2013 Long-Term Incentive Compensation Plan Award Type:
Performance Shares Grant Date: ______ __, 201_ Performance Period: ______ __,
201_to ______ __, 201_ Dear [_____]: I am pleased to inform you that Cree, Inc.
(the “Company”) has awarded _____ Performance Shares (the “Performance Shares”)
to you effective ______ __, 201_ (the “Grant Date”). The Performance Shares are
subject to and governed by the terms of the Cree, Inc. 2013 Long-Term Incentive
Compensation Plan (the “2013 Plan”), the terms of the [Severance Plan – Senior
Leadership Team] [Vice President] (the “Severance Plan”), dated April __, 2018,
as it may be amended from time to time, and the terms of this Performance Share
Award Agreement (the “Agreement”). Subject to the terms and conditions set forth
in this Agreement and the Severance Plan, as applicable, you are eligible to
earn the Performance Shares based on the Company’s “Relative Total Shareholder
Return” (as defined in Exhibit A) in terms of percentile ranking as compared to
the Peer Group (as defined in Exhibit A) over the period beginning on ______ __,
201_ and ending immediately prior to the third anniversary of the Grant Date
(the “Vesting Date”) (such period between the Grant Date and the Vesting Date,
the “Measurement Period”). The number of shares of the Company’s common stock
(“Shares”) that will be issued in payment of the Performance Shares will be
calculated in accordance with the schedule below: Relative Total Shareholder
Return Ranking over Measurement Period Payout % Level 75th Percentile or Higher
150% 50th – 74th Percentile 100% 25th – 49th Percentile 50% 0 – 24th Percentile
0% The calculation of the number of Shares to be issued will be rounded down to
the nearest whole number of Shares as necessary. As of the date of your death or
on the effective date of the determination of your Disability (as defined below)
by the Employee Benefits Committee of the Company (the “EBC”) or such other
committee as may be designated by the Board of Directors of the Company or a
committee thereof, any unvested Performance Shares shall be deemed to have
vested in full and been achieved at the greater of (a) the target level and (b)
the actual performance level (with the date of your death or on the effective
date of the determination of your Disability being treated as the ending date
for the measurement period). For purposes of this Agreement, “Disability” will
have the meaning given to “LTD Disability” in the Severance Plan. The
determination of whether or not you have a Disability will be made by the EBC in
good faith in its sole discretion, and such determination shall be conclusive,
final and binding upon all parties. The above definition of Disability applies
in lieu of the definition of disability set out in the 2013 Plan. Except as
otherwise provided in the terms of the Severance Plan, as applicable, you must
be continuously in service with the Company or any Employer or any subsidiary or
affiliate of the Company through the Vesting Date in order to have a right to
payment of Performance Shares, the Performance Shares will not be considered
earned until the Vesting Date, and except as may be specified otherwise in the
Severance

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

 
[psuawardagreementwtscs04002.jpg]
Plan, if your employment is terminated prior to the Vesting Date, you will
forfeit all of the Performance Shares. Capitalized terms defined in the 2013
Plan and used in this Agreement without definition have the meaning specified in
the 2013 Plan. This award is intended to fulfill any and all agreements,
obligations or promises, whether legally binding or not, previously made by the
Company or any Employer under the 2013 Plan to grant you Performance Shares in
connection with your sign-on award. By signing below, you accept such award,
along with all prior awards received by you, in full satisfaction of any such
agreement, obligation or promise. THE TERMS AND CONDITIONS ON THE PAGES
FOLLOWING THIS SIGNATURE PAGE, INCLUDING ANY APPENDIX, ARE AN INTEGRAL PART OF
THIS AGREEMENT AND ARE INCORPORATED HEREIN BY THIS REFERENCE. BY SIGNING BELOW
YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY SUCH
TERMS AND CONDITIONS. FAILURE TO SIGN WILL RESULT IN FORFEITURE OF THE
PERFORMANCE SHARES. Date: ______ __, 20__ CREE, INC.: ACCEPTED AND AGREED TO:
Gregg Lowe [Name] President and Chief Executive Officer Page 2 of 13

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

 
[psuawardagreementwtscs04003.jpg]
PERFORMANCE AWARD AGREEMENT TERMS AND CONDITIONS 1. Forfeiture of Performance
Shares for Awards Not Timely Accepted. The grant of the Performance Shares is
conditioned upon and subject to your accepting the Performance Shares by signing
and delivering to the Company this Agreement, or otherwise electronically
accepting the Performance Shares, no later than the first date the Performance
Shares are scheduled to vest pursuant to this Agreement. In the event of your
death or incapacitation prior to accepting the Performance Shares, the Company
will deem the Performance Shares as being accepted. If you fail to accept the
Performance Shares within the time described above, you will forfeit the
Performance Shares. 2. Payment. Subject to the terms of the 2013 Plan, this
Agreement and, if applicable, the Severance Plan, within 30 days after the
following date (except as provided otherwise in Section 19 below), the Company
shall make payment to you of the vested portion of the Performance Shares on
such date (if any), less any vested Performance Shares previously paid to you
(if any): ______ __, 201_. The Company shall make payment to you by delivery to
you (or, in the event of your death, to your estate or, if the Committee
establishes a beneficiary designation procedure pursuant to Section 12 of the
2013 Plan, to any beneficiary that you have designated pursuant to such
procedure) one or more certificates for a number of Shares equal to the number
of vested Performance Shares payable to you on such date or in the Company's
discretion may cause such Shares to be deposited in an account maintained by a
broker designated by the Company. 3. Responsibility for Taxes. (a) For purposes
of this Agreement, “Tax-Related Items” means any or all income tax, social
insurance tax, payroll tax, payment on account or other tax-related items that
may be applicable to the Performance Shares by law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign.
Regardless of any action the Company takes with respect to withholding
Tax-Related Items, you acknowledge that you are ultimately responsible for all
Tax-Related Items and that such Tax-Related Items may exceed the amount actually
withheld by the Company or the Employer. You further acknowledge that the
Company and/or the Employer (1) make no representations or undertakings
regarding the treatment of any Tax- Related Items in connection with any aspect
of the Performance Shares, including, without limitation, the grant, vesting or
payment with respect to the Performance Shares, the subsequent sale of Shares
and the receipt of any dividends or dividend equivalents; and (2) do not commit
to and are under no obligation to structure the terms of the grant or any aspect
of the Performance Shares to reduce or eliminate your liability for Tax-Related
Items or to achieve any particular tax result. Furthermore, if you have become
subject to tax in more than one jurisdiction between the Grant Date and the date
of any relevant taxable event, you acknowledge 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. (b) Prior to any
relevant taxable or tax withholding event, as applicable, you will pay or make
adequate arrangements satisfactory to the Company and/or the Employer to satisfy
all Tax- Related Items. If permissible under local law and at your election, the
Company will satisfy this condition pursuant to the withholding of Shares
consistent with the “Share Withholding” provisions under section 14.2 of the
2013 Plan. The Company, in its discretion, may authorize alternative
arrangements, including, if permissible under local law, the Company's selling
or arranging to sell Shares that you acquire under the 2013 Plan. In any event,
to the extent this condition is not otherwise satisfied, you authorize the
Employer to withhold all applicable Tax- Page 3 of 13

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

 
[psuawardagreementwtscs04004.jpg]
Related Items legally payable by you from your wages or other cash compensation
paid to you by the Employer. (c) Depending upon the withholding method, the
Company or the Employer may withhold or account for Tax-Related Items by
considering applicable minimum or maximum statutory withholding amounts or other
applicable withholding rates. In the event Tax-Related Items are over-withheld,
you will receive a refund in cash for any over-withheld amounts and will have no
entitlement to the Shares equivalent. If the obligation for Tax-Related Items is
satisfied by withholding of Shares, you shall be deemed, for tax purposes, to
have been issued the full number of Shares, notwithstanding that a number of
Shares is held back solely for the purpose of paying the Tax-Related Items due
as a result of any aspect of your participation in the 2013 Plan. (d) You shall
pay to the Company 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 your participation in the 2013 Plan that cannot be satisfied by the means
previously described. The Company may refuse to make payment with respect to the
Performance Shares if you fail to comply with your obligations in connection
with the Tax-Related Items. 4. Transfer of Performance Shares. The Performance
Shares and any rights under any Performance Share may not be assigned, pledged
as collateral or otherwise transferred, except as permitted by the 2013 Plan,
nor may they be subject to attachment, execution or other judicial process. In
the event of any attempt to assign, pledge or otherwise dispose of a Performance
Share or any rights under a Performance Share, except as permitted by the 2013
Plan, or in the event of the levy of any attachment, execution or similar
judicial process upon the rights or interests conferred by a Performance Share,
the Committee may in its discretion terminate a Performance Share by notice to
you. 5. Rights Prior to Vesting of Shares. (a) You will have no rights as a
shareholder with respect to any Shares issuable under the Performance Shares,
including but not limited to voting rights or rights to dividends or dividend
equivalents, until such Shares have been duly issued by the Company or its
transfer agent pursuant to the vesting and payment of the Performance Shares.
(b) In the event of a change in capitalization within the meaning of Section 4.4
of the 2013 Plan, the number and class of Shares or other securities that you
are entitled to pursuant to this Agreement shall be appropriately adjusted or
changed as determined by the Committee to reflect the change in capitalization,
provided that any such additional Shares or additional or different shares of
securities shall remain subject to the restrictions in this Agreement. 6.
Termination of Service: For purposes of this Agreement, “Termination of Service”
will have the meaning as prescribed by Treasury Regulation § 1.409A-1(h)(1)(ii)
under Section 409A of the Internal Revenue Code, as such meaning may be amended
from time to time. Except as determined otherwise by the Committee or as
provided in the Severance Plan, you will not be deemed to have incurred a
Termination of Service if the capacity in which you provide services to the
Company changes (for example, you change from being a non-employee director to
being an employee or you change from being an employee to a consultant) or if
you transfer employment among the various subsidiaries or affiliates of the
Company constituting the Employer, so long as there is no interruption in your
provision of services to the Company or other Employer as an employee or as a
non-employee member of the Board of Directors of the Company. The Committee,
Page 4 of 13

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

 
[psuawardagreementwtscs04005.jpg]
in its discretion, will determine whether you have incurred a Termination of
Service. You will not be deemed to have incurred a Termination of Service during
a period for which you are on military leave, sick leave, or other leave of
absence approved by the Employer. 7. Detrimental Activity. The Committee in its
sole discretion may cancel and cause to be forfeited any Performance Shares not
previously vested or released under this Agreement if you engage in any
"Detrimental Activity” (as defined below). In addition, if you engage in any
Detrimental Activity prior to or within one (1) year after your Termination of
Service, the Committee in its sole discretion may require you to pay to the
Company the amount of all gain you realized from any vesting of the Performance
Shares beginning six (6) months prior to your Termination of Service, provided
that the Committee gives you notice of such requirement within one (1) year
after your Termination of Service. In that event, the Company will be entitled
to set off such amount against any amount the Company owes to you, in addition
to any other rights the Company may have. For purposes of this section: (a)
“Company” includes Cree, Inc. and all other Employers under the 2013 Plan. (b)
“Detrimental Activity” means that you have engaged in activity that breaches the
terms of any restrictive covenants in any agreement between you and the Company,
including without limitation the most recent version of the Employee Agreement
Regarding Confidential Information, Intellectual Property, and Noncompetition in
effect for you as of the relevant date. If no such agreement exists, then
“Detrimental Activity” shall mean any of the following conduct, as determined by
the Committee in good faith: (i) the performance of services for any Competing
Business (as defined below), whether as an employee, officer, director,
consultant, agent, contractor or in any other capacity, except to the extent
expressly permitted by any written agreement between you and the Company; (ii)
the unauthorized disclosure or use of any trade secrets or other confidential
information of the Company any attempt to induce an employee to leave employment
with the Company to perform services elsewhere; (iii) any attempt to cause a
customer or supplier of the Company to curtail or cancel its business with the
Company; or (iv) or any act of fraud, misappropriation, embezzlement, or
tortious or criminal behavior that adversely impacts the Company. (c) “Competing
Business" as used in Section 7(b)(i) means any corporation, partnership,
university, government agency or other entity or person (other than the Company)
engaged in any part of the Company’s Business, including the development,
manufacture, marketing, distribution, research, or sale of any product, service,
or technology that Company is developing, manufacturing, marketing,
distributing, researching, or selling as of the date of your Termination of
Service. As of the date of this Agreement, you acknowledge that the Company’s
Business includes the following products, services, and technologies: (1)
silicon carbide (SiC) materials for electronic applications, (2) SiC materials
for gemstone applications, (3) AIII nitride materials for electronic
applications, (4) light emitting diode (LED) devices and components, (5) power
semiconductor devices made using SiC and/or AIII nitride materials and
components and Page 5 of 13

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

 
[psuawardagreementwtscs04006.jpg]
modules incorporating such devices, (6) radio frequency (RF) and microwave
devices made using SiC and/or AIII nitride materials and components and modules
incorporating such devices, (7) LED backlights for liquid crystal displays
(LCDs), (8) lighting products, modules, fixtures or devices incorporating any of
the above materials or technology, (9) sensors, drivers, networking, and
controls related to lighting products, and (10) other semiconductor devices made
using SiC and/or AIII nitride materials and components incorporating such
devices. You acknowledge that during your employment or other relationship with
the Company, the Company’s Business may expand or change and, you agree that any
such expansions and changes shall expand or contract the definition of the
Company’s Business accordingly. 8. Provisions of the 2013 Plan. The provisions
of the 2013 Plan are incorporated by reference in this Agreement as if set out
in full in this Agreement. To the extent that any conflict may exist between any
other provision of this Agreement, a provision of the 2013 Plan, and the
applicable provisions of the Severance Plan, if any, the applicable provisions
of the Severance Plan shall control. To the extent that any conflict may exist
between any other provision of this Agreement and a provision of the 2013 Plan,
the applicable provisions of this Agreement shall control. All decisions of the
Committee with respect to the interpretation, construction and application of
the 2013 Plan or this Agreement shall be final, conclusive and binding upon you
and the Company. 9. Data Privacy. By signing this Agreement, you explicitly and
unambiguously consent to the collection, use and transfer, in electronic or
other form, of your personal data as described in this Agreement by and among,
as applicable, the Employer, and the Company and its subsidiaries and affiliates
for the exclusive purpose of implementing, administering and managing your
participation in the 2013 Plan. You understand that the Employer holds certain
personal information about you, including, but not limited to, your name, home
address and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all Awards or any other
entitlement to Shares of stock awarded, canceled, exercised, vested, unvested or
outstanding in your favor, for the purpose of implementing, administering and
managing the 2013 Plan (“Data”). You understand that Data may be transferred to
any third parties assisting in the implementation, administration and management
of the 2013 Plan, that these recipients may be located in your country or
elsewhere, and that the recipient's country may have different data privacy laws
and protections than your country. You understand that you may request a list
with the names and addresses of any potential recipients of the Data by
contacting your local human resources representative. You authorize the
recipients to receive, possess, use, retain and transfer the Data, in electronic
or other form, for the purposes of implementing, administering and managing your
participation in the 2013 Plan, including any requisite transfer of such Data as
may be required to a broker or other third party with whom you may elect to
deposit any Shares of stock acquired pursuant to this Agreement. You understand
that Data will be held only as long as is necessary to implement, administer and
manage your participation in the 2013 Plan. You understand that you 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 above, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the 2013
Plan. For more information on the consequences of your refusal to consent or
withdrawal of consent, you understand that you may contact your local human
resources representative. 10. Electronic Delivery. The Company may, in its sole
discretion, decide to deliver any documents related to the Performance Shares
granted under this Agreement by electronic means or to request Page 6 of 13

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

 
[psuawardagreementwtscs04007.jpg]
your consent to participate in the 2013 Plan by electronic means. By signing
this Agreement, you consent to receive such documents by electronic delivery
and, if requested, to agree to participate in the 2013 Plan through an on-line
or electronic system established and maintained by the Company or another third
party designated by Company. 11. General. (a) Nothing in this Agreement will be
construed as constituting a commitment, agreement or understanding of any kind
that the Employer will continue your service relationship nor to limit or
restrict either party's right to terminate the service relationship. (b) This
Agreement shall be binding upon and inure to the benefit of you and the Company
and upon our respective heirs, executors, administrators, representatives,
successors and permitted assigns. (c) Notices under this Agreement must be in
writing and delivered either by hand or by certified or registered mail (return
receipt requested and first-class postage prepaid), in the case of the Company,
addressed to its principal executive offices to the attention of the Stock Plan
Administrator, and, in your case, to your address as shown on the Employer's
records. (d) This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina without regard to the conflict of
law provisions thereof, as if made and to be performed wholly within such State.
For purposes of litigating any dispute that arises directly or indirectly from
the relationship of the parties evidenced by the Performance Shares or this
Agreement, the parties hereby submit to and consent to the exclusive
jurisdiction of the State of North Carolina, agree that such litigation shall be
conducted in the courts of Durham County, North Carolina, or the federal courts
for the United States for the Middle District of North Carolina, and no other
courts, where the award of the Performance Shares is made and/or to be
performed. (e) No amendment or modification of this Agreement shall be valid
unless the same is in writing and signed by you and by an authorized executive
officer of the Company. If any provision of this Agreement is held to be invalid
or unenforceable, such determination shall not affect the other provisions of
the Agreement and the Agreement shall be construed as if the invalid or
unenforceable provision were omitted and a valid and enforceable provision, as
nearly comparable as possible, substituted in its place. (f) This Agreement, the
2013 Plan, and the applicable Severance Plan, if any, set forth all of the
promises, agreements and understandings between you and Company relating to the
Performance Shares evidenced by this Agreement. This Agreement supersedes any
and all prior agreements or understandings, whether oral or written, with
respect to the Performance Shares evidenced by this Agreement unless otherwise
specified in the Agreement. (g) Shares issued upon settlement of the Performance
Shares may be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange or trading system
upon which the Common Stock is listed or traded, and any applicable federal or
state laws, and the Committee may cause a legend or legends to be placed on any
such certificates to make appropriate reference to such restrictions. Page 7 of
13

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

 
[psuawardagreementwtscs04008.jpg]
(h) You agree that each Performance Share evidenced by this Agreement serves as
additional, valuable consideration for your obligations, if any, undertaken in
any existing agreement between you and the Employer regarding confidential
information, noncompetition, nonsolicitation or similar covenants, including
without limitation the most recent version of the Employee Agreement Regarding
Confidential Information, Intellectual Property, and Noncompetition in effect
for you as the relevant date. (i) You acknowledge, represent and warrant to the
Company, and agree with the Company, that, except for information provided in
the Company's filings with the Securities and Exchange Commission and in the
Company's current prospectus relating to the 2013 Plan: (i) you have not relied
and will not rely upon the Committee, the Company, an Employer or any employee
or agent of the Company or an Employer in determining whether to accept the
Performance Shares, or in connection with any disposition of Shares obtained
pursuant to settlement of the Performance Shares, or with respect to any tax
consequences related to the grant of the Performance Shares or the disposition
of Shares obtained pursuant to settlement of the Performance Shares; and (ii)
you will seek from your own professional advisors such investment, tax and other
advice as you believe necessary. (j) You acknowledge that you may incur a
substantial tax liability as a result of the Performance Shares. You assume full
responsibility for all such consequences and the filing of all tax returns and
related elections you may be required or find desirable to file. If you are
required to make any valuation of Performance Shares or Shares obtained pursuant
to settlement of Performance Shares under any federal, state or other applicable
tax law, and if the valuation affects any tax return or election of the Company
or the Employer or affects the Company's financial statement reporting, you
agree that the Company may determine the value and that you will observe any
determination so made by the Company in all tax returns and elections filed by
you. (k) You acknowledge that copies of the 2013 Plan and Plan prospectus are
available upon written or telephonic request to the Company’s Stock Plan
Administrator. 12. Severability. The provisions of this Agreement are severable
and if any one of more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions shall nevertheless
be binding and enforceable. 13. Nature of Grant. In accepting this grant, you
acknowledge, understand and agree that: (a) the 2013 Plan is established
voluntarily by the Company, is discretionary in nature and may be modified,
amended, suspended or terminated by the Company at any time, unless expressly
provided otherwise in the 2013 Plan or the Agreement; (b) the grant of the
Performance Shares is voluntary and does not create any contractual or other
right to receive future grants of Performance Shares, or benefits in lieu of
Performance Shares, even if Performance Shares have been granted repeatedly in
the past; (c) all decisions with respect to future grants of Performance Shares,
if any, will be at the sole discretion of the Company; (d) your participation in
the 2013 Plan is voluntary; Page 8 of 13

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

 
[psuawardagreementwtscs04009.jpg]
(e) your participation in the 2013 Plan will not create a right to employment
with the Company or the Employer and will not interfere with the ability of the
Company, the Employer or any subsidiary or affiliate to terminate your
employment or service relationship at any time; (f) if you are employed by a
non-U.S. entity and provide services outside the U.S., the Performance Shares
are an extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to your Employer, and they are outside the scope
of your employment or service contract, if any, with your Employer; (g) the
grant of the Performance Shares is not intended to replace any pension rights or
compensation; (h) the grant of the Performance Shares is not part of normal or
expected compensation or salary for any purposes, including, but not limited to,
calculating any severance, resignation, termination, redundancy, dismissal,
end-of-service payments, bonuses, long-service awards, pension or retirement or
welfare benefits or similar payments; (i) the grant of the Performance Shares
and your participation in the 2013 Plan will not be interpreted to form an
employment or service contract or relationship with the Company, the Employer or
any subsidiary or affiliate of the Company; (j) the future value of the
Performance Shares is unknown and cannot be predicted with certainty; (k) no
claim or entitlement to compensation or damages shall arise from forfeiture of
the Performance Shares resulting from termination of your employment or service
relationship by the Company or the Employer (for any reason whatsoever and
whether or not later found to be invalid or in breach of employment laws in the
jurisdiction where you are employed or the terms of your employment agreement,
if any), and, in consideration of the grant of the Performance Shares, to which
you otherwise are not entitled, you irrevocably agree, if applicable, to execute
the Release, as defined in the applicable Severance Plan, if any; (l) the grant
of the Performance Shares and the benefits under the 2013 Plan, if any, will not
automatically transfer to another company in the case of a merger, takeover, or
transfer of liability; (m) neither the Company, the Employer nor any subsidiary
or affiliate of the Company shall be liable for any foreign exchange rate
fluctuation between your local currency and the United States Dollar that may
affect the value of the Performance Shares or of any payments due to you
pursuant to the subsequent sale of any Shares acquired upon the vesting of the
Performance Shares; and (n) this award and any other award(s) granted under the
2013 Plan on the Grant Date are intended to fulfill any and all agreements,
obligations or promises, whether legally binding or not, previously made by the
Company or another Employer under the 2013 Plan to grant you the Performance
Shares or other rights to common stock of the Company. By signing this
Agreement, you accept such awards, along with all prior awards received by you,
in full satisfaction of any such agreement, obligation or promise. 14. No Advice
Regarding Grant. The Company is not providing any tax, legal, or financial
advice, nor is the Company making any recommendations regarding your
participation in the 2013 Plan or sale Page 9 of 13

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

 
[psuawardagreementwtscs04010.jpg]
of Shares. You are hereby advised to consult with your own personal tax, legal
and financial advisors regarding your participation in the 2013 Plan before
taking any action related to the 2013 Plan. 15. Compliance with Law.
Notwithstanding any other provision of the 2013 Plan or this Agreement, unless
there is an available exemption from any registration, qualification or other
legal requirement applicable to the Performance Shares or Shares, as applicable,
the Company shall not be required to deliver the Performance Shares or any of
the underlying Shares prior to the completion of any registration or
qualification of the Shares under any local, state, federal or foreign
securities or exchange control law or under rulings or regulations of the U.S.
Securities and Exchange Commission (“SEC”) or of any other governmental
regulatory body, or prior to obtaining any approval or other clearance from any
local, state, federal or foreign governmental agency, which registration,
qualification or approval the Company shall, in its absolute discretion, deem
necessary or advisable. You understand that the Company is under no obligation
to register or qualify the Performance Shares or any of the underlying Shares
with the SEC or any state or foreign securities commission or to seek approval
or clearance from any governmental authority for the issuance of the Performance
Shares and Shares. Further, you agree that the Company shall have unilateral
authority to amend the 2013 Plan and the Agreement without your consent to the
extent necessary to comply with securities or other laws applicable to issuance
of shares. 16. Waiver. You acknowledge that a waiver by the Company of breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other provision of this Agreement, or of any subsequent breach by you or any
other participant. 17. Appendix. Notwithstanding any provisions in this
Agreement, the Performance Shares shall be subject to any special terms and
conditions set forth in any Appendix attached to this Agreement for your country
to the extent that the Company determines that the application of such terms and
conditions is necessary or advisable in order to comply with local law or to
facilitate the administration of the 2013 Plan. Moreover, if you relocate to or
from one of the countries included in any such Appendix, the special terms and
conditions for the country you are moving from and/or the country you are moving
to will apply to you to the extent that the Company determines that the
application of such terms and conditions is necessary or advisable in order to
comply with local law or to facilitate the administration of the 2013 Plan. If
included, any such Appendix is incorporated in and constitutes part of this
Agreement. 18. Imposition of Other Requirements. The Company reserves the right
to impose other requirements on your participation in the 2013 Plan, on the
Performance Shares and on any Shares acquired under the 2013 Plan, provided such
requirements do not conflict with the Severance Plan, to the extent that the
Company determines it is necessary or advisable in order to comply with local
law or to facilitate the administration of the 2013 Plan, and to require you to
sign any additional agreements or undertakings that may be necessary to
accomplish the foregoing. 19. Section 409A. The Performance Shares are is
intended to qualify for the “short-term deferral” exemption from Section 409A of
the Code, and the provisions of this Agreement between you and the Company will
be interpreted, operated and administered in a manner consistent with these
intentions. The right to payment triggered by each installment vesting date or
vesting event pursuant to this Agreement is intended to be a right to a separate
payment for purposes of Section 409A of the Code. The Company reserves the
right, to the extent the Company deems necessary or advisable in its sole
discretion, without your consent, to unilaterally amend or modify the 2013 Plan
and/or this Agreement to ensure that the Performance Shares qualify for
exemption from or comply with Section 409A of the Code; provided, however, that
the Company makes no representations that the Performance Shares will be exempt
from Section 409A of the Code and makes no undertaking to Page 10 of 13

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

 
[psuawardagreementwtscs04011.jpg]
preclude Section 409A of the Code from applying to the Performance Shares. With
respect to any amounts payable under this Agreement that are subject to Section
409A of the Code, (i) it is intended, and this Agreement will be so construed,
that such amounts and the Company’s and your exercise of authority or discretion
hereunder shall comply with the provisions of Section 409A of the Code so as not
to subject you to the payment of interest and additional tax that may be imposed
under Section 409A of the Code; (ii) any provisions of this Agreement that
provide for payment of compensation triggered by your termination of employment
other than on account of your death shall be deemed to provide for payment that
is triggered only by your “separation from service” within the meaning of
Treasury Regulation Section §1.409A-1(h) (a “Section 409A Separation from
Service”), (iii) if you are a “specified employee” within the meaning of
Treasury Regulation Section §1.409A-1(i) on the date of your Section 409A
Separation from Service (with such status determined by the Company in
accordance with rules established by the Company in writing in advance of the
“specified employee identification date” that relates to the date of such
Section 409A Separation from Service or in the absence of such rules established
by the Company, under the default rules for identifying specified employees
under Treasury Regulation Section 1.409A-1(i)), such compensation triggered by
such Section 409A Separation from Service shall be paid to you six months
following the date of such Section 409A Separation from Service (provided,
however, that if you die after the date of such Section 409A Separation from
Service, this six month delay shall not apply from and after the date of your
death), and (iv) to the extent necessary to comply with Section 409A of the
Code, the definition of change in control that applies under Section 409A of the
Code shall apply under this Agreement to the extent that it is more restrictive
than the definition of change in control that would otherwise apply. The Company
will have no liability to you or to any other party if the Performance Shares,
the vesting of the Performance Shares, delivery of Shares in payment of the
Performance Shares or any other event hereunder that is intended to be exempt
from or compliant with Section 409A of the Code, is not so exempt or compliant,
or for any action taken by the Company with respect thereto. Page 11 of 13

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

 
[psuawardagreementwtscs04012.jpg]
EXHIBIT A CALCULATION OF RELATIVE TOTAL SHAREHOLDER RETURN • “Relative Total
Shareholder Return” means the Company’s TSR relative to the TSR of the Peer
Companies. Relative Total Shareholder Return will be determined by ranking the
Company and the Peer Companies from highest to lowest according to their
respective TSRs. After this ranking, the percentile performance of the Company
relative to the Peer Companies will be determined as follows: R 1 P  1 N 1
Where: “P” represents the percentile performance which will be rounded, if
necessary, to the nearest whole percentile by application of regular rounding.
“N” represents the remaining number of Peer Companies, plus the Company. “R”
represents Company’s ranking among the Peer Companies. Example: If there are 24
Peer Companies, and the Company ranked 7th, the performance would be at the 75th
percentile: .75 = 1 – ((7-1)/(25-1)). Relative Total Shareholder Return shall be
calculated by the Compensation Committee of the Board of Directors of the
Company based on the terms set forth in this Exhibit A and in the Compensation
Committee’s sole and absolute discretion. • “TSR” means, for each of the Company
and the Peer Companies, the company’s total shareholder return, expressed as a
percentage, which will be calculated by dividing (i) the Closing Average Share
Value by (ii) the Opening Average Share Value and subtracting one from the
quotient. • “Opening Average Share Value” means the average, over the trading
days in the Opening Average Period, of the closing price of a company’s stock
multiplied by the Accumulated Shares for each trading day during the Opening
Average Period. • “Opening Average Period” means the 30 trading days ending on
the last trading day immediately preceding _______ _, 20__. • “Accumulated
Shares” means, for a given trading day, the sum of (i) one (1) share and (ii) a
cumulative number of shares of the company’s common stock purchased with
dividends declared on a company’s common stock, assuming same day reinvestment
of the dividends in the common stock of a company at the closing price on the
ex-dividend date, for ex-dividend dates during the Opening Average Period or
between the Grant Date and the Vesting Date, as applicable. • “Closing Average
Share Value” means the average, over the trading days in the Closing Average
Period, of the closing price of the company’s stock multiplied by the
Accumulated Shares for each trading day during the Closing Average Period. •
“Closing Average Period” means the 30 trading days immediately preceding the
Vesting Date. Page 12 of 13

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

 
[psuawardagreementwtscs04013.jpg]
• “Peer Companies” means the companies included in the NASDAQ Composite Index
filtered by the Semiconductor, Semiconductor Equipment, and Electronics
Equipment, Instruments and Components Sectors • For purposes of calculating TSR,
the value of any Peer Company shares traded on a foreign exchange will be
converted to US dollars. Page 13 of 13

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