Intersil Corporation
2008 Equity Compensation Plan
Performance-Based Deferred Market Stock

Unit (MSU) Award

Terms and Conditions
(Effective April 2015)

 

Intersil Corporation (the “Company” or “Intersil”) has awarded you
performance-based deferred market stock units (“MSUs”) pursuant to the Intersil
Corporation 2008 Equity Compensation Plan (the “Plan”) provisions applicable to
DSUs, and under the terms and conditions set forth in your MSU award letter (the
“Letter”) and the terms and conditions set forth in this document (the “Terms
and Conditions”) (the Letter and Terms and Conditions collectively referred to
herein as the “MSU Award Agreement”).  The number of MSUs awarded to you is set
forth in the Letter and is subject to adjustment as provided in the MSU Award
Agreement.  The specific terms of your MSU award are controlled by the MSU Award
Agreement and the Plan.  Capitalized terms which are not defined in this
document will have the meanings specified in the Plan.

1.    Vesting; Payment on Vest Date.  The vesting of your MSU award is subject
to the following rules:

a. Vesting.  Subject to Sections 1(c) and 1(d), provided that you remain in the
employment or service of the Company through the applicable vesting date, and
the Company achieves the performance goals set forth on Schedule 1 attached
hereto (the “Performance Goals”) and made a part hereof, you shall become vested
in the MSU award per the vesting schedule and percentages set forth in Schedule
1.  Upon vesting of the MSU award you will be entitled to one share of Intersil
Common Stock for each vested MSU you have been awarded. The shares of Intersil
Common Stock represented by the MSU Award will be distributed to you after the
Performance Goals have been certified by the Compensation Committee of the Board
of Directors of Intersil (the “Committee”).  Any portion of the MSU award that
does not become vested as a result of the failure to achieve the relevant
Performance Goals shall be immediately forfeited with no consideration due to
you.  

b. Separation from Service as a Result of Your Disability or Death.  If you have
a Separation from Service as a result of your Disability or death and all or a
portion of your MSU award has not yet become vested, any unvested portion of
your MSU award will immediately expire and you will not be entitled to any
Intersil Common Stock attributable to such unvested portion of the MSU award
(except as otherwise specifically provided in Section 1(c) below). 

c. Separation from Service as a Result of Your Retirement.  If you have a
Separation from Service as a result of your Retirement (as defined in the
Company’s Retirement Benefits Policy, as in effect on the grant date of your MSU
award) and all or a portion of your MSU award has not yet become vested,
notwithstanding such Separation from Service, if the unvested portion would have
become vested during the period beginning on your Retirement and ending on the
date which is eighteen (18) months after your Retirement (the “Post-Retirement
Vesting Period”), such unvested portion of your MSU award will vest and be
settled in the same manner and at the same time as if you did not have a
Separation from Service prior to the date of vesting.  In the event of your
death following your Retirement, your estate or beneficiary, as applicable, will
be entitled to

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receive that portion of your MSU award that would have become vested during the
Post-Retirement Vesting Period in the same manner as if you did not have a
Separation from Service prior to the date of vesting of such portion, with such
amount to be settled as soon as administratively practicable following the later
of (x) the expiration of the performance period and (x) the date of your
death.   If you have a Separation from Service as a result of your death
following your qualification for Retirement but before your Retirement and all
or a portion of your MSU award has not yet become vested at the time of your
death, your estate or beneficiary, as applicable, will be entitled to receive
that portion of your MSU award that would have become vested during the 18-month
period following your death in the same manner as if you did not have a
Separation from Service prior to the date of vesting of such portion, with such
amount to be settled as soon as administratively practicable following the later
of (x) the expiration of the performance period and (x) the date of your death.
Notwithstanding the foregoing, if at any time during the Post-Retirement Vesting
Period you render services to a competitor of the Company, as determined in good
faith by the Committee, the unvested portion of your MSU award will immediately
expire on the date such services were initially rendered and you will not be
entitled to any Intersil Common Stock attributable to such unvested portion of
the MSU award.  To the extent you render services to a company that could
reasonably be considered a competitor of the Company, you must provide written
notification of employment with such company to the Company within 10 days of
the date such services are initially rendered.

d. Performance Scoring on Change in Control.   If a change in control occurs, as
defined in Section (ii) below your MSU performance results will be determined as
follows: 

(A)Your unvested MSUs for which the performance period has been completed  shall
be payable to you with the number of shares under a particular grant being
determined using the Performance Goals as set forth in Schedule 1 for the
respective performance period, (ii) your unvested MSUs for any performance
period in progress shall be payable to you with the number of shares under a
particular grant being determined by applying the Performance Goals as set forth
in Schedule 1 to the performance level achieved through the date of the Change
in Control, (iii) in both circumstances described in (i) and (ii), you must
remain with the surviving company through the vesting periods of the grant.  At
the time of vesting, payment of all MSUs will be made to you in accordance with
Section 1.f. – “Payment on Vest Date”.

(B)For purposes of this Agreement, "Change in Control" means the consummation of
any of the following transactions after the date hereof: (a) the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of liquidation
or dissolution of the Company or an agreement for the sale, lease, exchange or
other transfer or disposition by the Company of all or substantially all (more
than fifty percent (50%)) of the Company's assets; (b) any person (as such

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term is used in Sections 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), is or becomes the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) directly or indirectly of 25% or
more of the Company's outstanding Common Stock; or (c) a change in the
composition of the Board of Directors of the Company  within a three (3) year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either: (A)
are directors of the Company as of May 15,2002; (B) are elected, or nominated
for election, to the Board of Directors of the Company with the affirmative
votes of at least a majority of the directors of the Company who are Incumbent
Directors described in (A) above at the time of such election or nomination; or
(C) are elected, or nominated for election, to the Board of Directors of the
Company with the affirmative votes of at least a majority of the directors of
the Company who are Incumbent Directors described in (A) or (B) above at the
time of such election or nomination.  Notwithstanding the foregoing, "Incumbent
Directors" shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company.

 

e. Separation from Service for Any Reason Other than Death, Disability,
Retirement or a Covered Termination.  If, prior to vesting of a portion of your
MSU award, you have a Separation from Service with the Company for any reason
other than death, Disability, Retirement or a Covered Termination (including
without limitation a termination for Cause or as a result of a reduction in
force), the unvested portion of your MSU award will expire on the date of your
Separation from Service and you will not be entitled to receive Intersil Common
Stock attributable to such unvested portion of your MSU award.

f. Payment Upon Vesting.  Absent an election otherwise in accordance with
Section 2 below, settlement of the vested portion of your MSU award will be made
as soon as practicable following the date upon which such portion becomes
vested, but in no event later than the end of the calendar year in which such
portion became vested.

For the avoidance of doubt, except as otherwise specifically provided in
Sections 1(c) and (d) above, upon any Separation from Service, the unvested
portion of your MSU award shall be immediately forfeited with no consideration
due to you.

 

2.    Deferral of Vested Shares.  Notwithstanding Section 1, you may decide to
defer the receipt of all or a portion of the shares of Intersil Common Stock
payable in respect of your MSU award in accordance with this Section 2 (each
deferral period that you select is referred to herein as a “Deferral Period”). 

a. Deferral of MSUs.  To the extent permitted by Code Section 409A, you may
defer receipt of shares of Intersil Common Stock with the Company’s stock plan
service provider, provided that such election must be submitted (i) in the year
before the award is made, (ii) within 30 days of initial eligibility under the
Plan, (iii) within 30 days of a grant but only if there is at least a 12 month
vesting requirement attached to the Award and the deferral election is made at
least 12 months before any portion of the Award is scheduled to vest, or (iv) if
the Award is subject

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to attainment of Performance Goals over a performance period of not less than 12
months, at least 6 months prior to the date the applicable performance period
for such Performance Goal ends.   You may not revoke or revise your deferral
elections once made. 

b. Separation from Service.

(i)If, prior to the expiration of the Deferral Period, you have a Separation
from Service for any reason and you are not then eligible for Retirement, you
shall be entitled to receive shares of Intersil Common Stock in settlement of
your vested and deferred MSU awards as soon as administratively practicable
thereafter.

(ii)If, prior to the expiration of the Deferral Period, you have a Separation
from Service for any reason and you are then eligible for Retirement, the
receipt of Intersil Common Stock for which a deferral election is in effect will
continue to be deferred until the end of your previously elected Deferral
Period.

(iii)Notwithstanding clauses (i) and (ii) above, if, prior to the expiration of
the Deferral Period, you die, your estate or beneficiaries, as applicable, will
be entitled to receive shares of Intersil Common Stock in settlement of your
vested and deferred MSU awards as soon as administratively practicable
thereafter.

c. Withdrawals due to Unforeseeable Emergency.  You may submit a written request
to the Committee for immediate distribution of deferred and vested shares of
Intersil Common Stock at any time.  Such requests are approved at the discretion
of the Committee and for a purpose that the Committee determines, in its sole
discretion, constitutes an “Unforeseeable Emergency” (as determined in
accordance with Code Section 409A).

(i) For purposes of this Section 2.d., “Unforeseeable Emergency” shall be
determined in accordance with Code Section 409A and means a severe financial
hardship to you resulting from:

Aa sudden and unexpected illness or accident involving you, your spouse, or of
one of your dependents, as defined in section 152(a) of the Code;

Bloss of your property due to casualty; or

Cother similar extraordinary and unforeseeable circumstances arising as a result
of events beyond your control that satisfies the limitations contained in
applicable tax law.

(ii) Circumstances that shall not be deemed to meet the above “Unforeseeable
Emergency” definition shall include, but not to be limited to, the purchase of a
home and the need to pay for the post-secondary education of your children. 

(iii) The circumstances that constitute an Unforeseeable Emergency will depend
upon the facts and circumstances of each request, but, in any case, distribution
shall not be made to the extent that such hardship is or may be relieved: 

A.through the reimbursement or compensation by insurance or otherwise;

B.by liquidation of your assets, to the extent the liquidation of such assets
would not itself cause severe financial hardship; or

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C. by cessation of deferrals under a retirement plan or other deferred
compensation plan maintained by the Company.

(iv) Distributions because of an Unforeseeable Emergency shall not exceed the
lesser of:

A.the amount required to meet the need created by the hardship, including
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution (as determined in the Committee’s sole discretion); or

B.the aggregate value of your deferred and vested MSU awards.

(v)Distributions for an Unforeseeable Emergency shall be made as soon as
practicable following approval of a request for distribution by the Committee.

3.    Stock Ownership Restrictions. If you are subject to Intersil Common Stock
ownership requirements established by Intersil’s Board of Directors or the
Committee, you will not be permitted to sell your Intersil Common Stock (even if
vested and not subject to a deferral commitment) if you have not satisfied the
Common Stock ownership requirements established for you or if the sale of your
Intersil Common Stock will result in your failure to satisfy those
requirements.  However, you may be able to sell your Intersil Common Stock
without regard to the applicable Common Stock ownership requirements if you
establish that you have experienced an Unforeseeable Emergency.  A sale will
only be permitted in the amount necessary to satisfy that Unforeseeable
Emergency.

4.    Non-Transferability of Your MSU Award.  You may not sell, transfer, assign
or in any other way convey or encumber any portion of the MSU award issued to
you.

5.    Shareholder Rights.  You will have no rights as a shareholder (including,
without limitation, voting rights and dividend rights) with respect to any
Intersil Common Stock covered by your MSU award until you receive Intersil
Common Stock in settlement thereof.  Notwithstanding the foregoing, you will
have the right to receive dividend equivalents on the unvested or deferred
portion of your MSU award, as set forth in Section 6 below.

6.    Right to Receive Dividend Equivalents.  During the vesting period and
deferral periods, you will accrue the right to receive an amount equal to the
dividends (if any) paid on the Intersil Common Stock attributable to your MSU
award as if you owned the underlying Intersil Common Stock.  These amounts will
be held by the Company and distributed without interest on the applicable
payment date for the portion of the MSU award to which such dividends relate,
and shall be forfeited to the extent that the applicable portion of the MSU
award is forfeited. 

7.    Nature of Unvested Common Stock Subject to the MSU Award.  The MSU award
represents the right to acquire a certain number of shares of Intersil Common
Stock upon vesting.  Your MSU award does not constitute Intersil Common Stock
and no shares of Intersil Common Stock will be issued or transferred to you
until all requirements applicable to the MSU award have been satisfied, as
determined by the Committee. 

8.    Nature of Deferred Shares.  No shares of Intersil Common Stock (or
dividend equivalents) will be issued or transferred to you until all
requirements applicable to your deferral under Section 2 of these Terms and
Conditions have been satisfied as determined by the Committee.  The obligation
to make distributions pursuant to MSU awards for which a deferral election has
previously been made will be an obligation solely of the
Company.  Notwithstanding any other

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provision of the MSU Award Agreement, you and your beneficiaries will be
unsecured general creditors of the Company, with no secured or preferential
rights to any assets of the Company or any other party in connection with the
Company’s obligation to make distributions hereunder.  The Company’s obligation
to make distributions hereunder constitutes an unfunded and unsecured promise.

9.    Withholding of Taxes.

a. Share Withholding.  Upon vesting of this MSU award, or the expiration of a
deferral period if you elected to defer receipt of Intersil Common Stock, you
may request through the Company’s stock plan service provider to withhold shares
of Intersil Common Stock then issued by the Company from the shares otherwise to
be received by you in order to satisfy the liability for any amount of tax
withholding as required by law.  The number of Shares so withheld shall have an
aggregate Fair Market Value on the date of vesting or the last day of the
applicable deferral period, as applicable, sufficient to satisfy the applicable
withholding taxes (provided that withholding in the form of shares of Intersil
Common Stock shall not occur at a rate that exceeds the minimum required
federal, state and local statutory withholding rates).

b. Withholding Required.  Notwithstanding anything herein to the contrary, your
satisfaction of any tax-withholding requirements shall be a condition precedent
to the Company’s obligation as may otherwise be provided hereunder to distribute
shares of Intersil Common Stock (and dividend equivalents) to you.

10.    Delay of Certain Payments.  Notwithstanding any other provision of these
Terms and Conditions, if you are a “Specified Employee” as defined in Section
409A of the Code, and if any payment due under these Terms and Conditions would
subject you to any penalty tax imposed under Section 409A of the Code if such
payment was made within six months after your Separation from Service, then the
payments that would be made during such period shall be withheld and paid
(without interest) on the first day which is at least six months after the date
of your Separation from Service (or within 10 days after the date of your death,
if earlier).

11.    Incorporation by Reference.  Your MSU award shall be subject to the
terms, conditions and limitations set forth in the MSU Award Agreement and the
Plan (the terms of which are incorporated herein by reference).  In the event of
any contradiction, distinction or differences between the MSU Award Agreement
and the terms of the Plan, the terms of the Plan will control.

12.    Governing Law.  Your MSU award and the MSU Award Agreement shall be
construed in accordance with the laws of the State of Delaware, without regard
to the application of any conflicts of laws provisions.

13.    Definitions.  The terms “Change in Control,” “Involuntary Termination”
and “Voluntary Termination for Good Reason” shall have the meanings set forth in
your Executive Change in Control Severance Benefits Agreement, (as amended from
time to time).  The terms “Cause,” “Code,” “Committee,” “Disability,” “Fair
Market Value” and “Separation from Service” shall have the meanings set forth in
the Plan. 

14.    Miscellaneous.

a.The captions of these Terms and Conditions are not part of the provisions
hereof and shall have no force or effect.  These Terms and Conditions may not be
amended or modified, except pursuant to a written agreement between you and the
Company unless such amendments or modifications are required in order to comply
with applicable laws or to preserve deferral of

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taxation under Section 409A of the Code.  The invalidity or unenforceability of
any provision of these Terms and Conditions shall not affect the validity or
enforceability of any other provision of these Terms and Conditions.

b.The Committee may make such rules and regulations and establish such
procedures for the administration of your MSU award as it deems
appropriate.  Without limiting the generality of the foregoing, the Committee
may interpret the MSU Award Agreement, with such interpretations to be
conclusive and binding on all persons and otherwise accorded the maximum
deference permitted by law.  In the event of any dispute or disagreement as to
the interpretation of the MSU Award Agreement or of any rule, regulation or
procedure, or as to any question, right or obligation arising from or related to
the MSU Award Agreement, the decision of the Committee shall be final and
binding on all persons, including without limitation, you.

c.All notices hereunder shall be in writing, and if to the Company or the
Committee, shall be delivered to the Board of Directors of the Company or mailed
to its principal office, addressed to the attention of the Board of Directors;
and if to you, shall be delivered personally, sent by facsimile transmission or
mailed to you at the address appearing in the records of the Company.  Such
addresses may be changed at any time by written notice to the other party given
in accordance with this Section 14(c).

d.The failure of you or the Company to insist upon strict compliance with any
provision of the MSU Award Agreement or the Plan, or to assert any right that
you or the Company, respectively, may have under the MSU Award Agreement or the
Plan, shall not be deemed to be a waiver of such provision or right or any other
provision or right of the MSU Award Agreement or the Plan.

e.Nothing in these Terms and Conditions shall confer on you the right to
continue in the service or employment of the Company or interfere in any way
with the right of the Company and its stockholders to terminate your service or
employment at any time.

f.Nothing in these Terms and Conditions, and no action taken pursuant to the
provisions of these Terms and Conditions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company or its
officers or the Committee, on the one hand, and you or any other person, or
entity on the other. 

g.Your MSU award is intended to comply with, or be exempt from, Code Section
409A and shall be interpreted in a manner consistent therewith; provided,
however, that neither the Company, any of its subsidiaries, the Board of
Directors, the Committee or any other person shall have any liability to you if
your MSU award is not exempt from, or compliant with, Code Section 409A.  Each
payment in a series of payments hereunder shall be treated as a separate payment
for purposes of Code Section 409A.  

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Schedule 1

1)Vesting Schedule

Depending upon performance, your MSU award will 100% cliff vest in three (3)
years from the date of the Award.

 

2)Performance Period

The Performance Period for your MSU award is three (3) years.

 

3)Performance Goals and Payout

a.Performance Metric:

·

Distribution of your MSU award is based on the Company’s total shareholder
return (TSR) and stock price appreciation relative to the TSR and stock price
appreciation of the S&P Semiconductor Select Index, as set forth on Schedule 2. 

 

b.Plan Structure:

·

Intersil TSR performance is measured against TSR performance of  the S&P
Semiconductor Select Index of companies (see Schedule 2). During the three years
performance period, additions to the S&P Semiconductor Select Index will not be
added, however, companies that are removed from the index will be dropped.

·

If Intersil TSR performance results are above the 90.0th percentile, payout is
capped at the payout for 90th percentile.

·

If Intersil TSR performance results are at the 50.0th percentile, there will be
100% payout.

·

If Intersil TSR performance results are below the 25.0th percentile, there will
be 0% payout.

·

If Intersil TSR performance results are between the 25.0th percentile and the
90.0th percentile, the payout percentage will be linearly interpolated

·

If the average closing price of Intersil common stock on the NASDAQ exchange
during the final measurement period of [last three months of performance period]
(the “Final Average Stock Price”) is at or above $___.00 and Intersil’s relative
TSR is at or above the 75th percentile, the payout will be increased as
indicated in the table below.

 

 

 

 

 

 

$25

 

 

 

 

 

 

 

$25

 

 

 

 

 

Percentile

Rank

 

Payout

(TSR >0%)

Final Average Stock Price

<  $__

Payout

(TSR >0%)

Final Average Stock Price

≥ $__

Payout

(TSR <0%)

Final Average Stock Price

< $__

Payout

(TSR <0%)

Final Average Stock Price

≥ $__

90.0th

200%

300%

100%

150%

75.0th

150%

225%

100%

150%

62.5th

125%

125%

100%

100%

50.0th

100%

100%

100%

100%

37.5th

75%

75%

75%

75%

25.0th

50%

50%

50%

50%

No TSR Threshold

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c.Calculation of TSR to Determine Final Equity Award Distribution:

Effective on the date of issuance of the MSU award, which is the beginning of
the performance period, the TSR performance baseline will be calculated using
the three (3) month period preceding the issuance date and applying a “simple”
average (un-weighted) compared to the three (3)  month period preceding the end
of the Performance Period  and applying a “simple” average (un-weighted) at the
end of the Performance Period against the peer group.

 

d.Treatment of Dividends:

Dividends are assumed to be reinvested for purposes of determining the TSR.

 

e.The Compensation Committee reviews and approves the TSR calculation that
determines the earned amount of equity that will be distributed in respect of
your MSU award.

 

4)Peer Group Comparison

a.See Schedule 2 (attached) for the peer group of companies.  The Compensation
Committee has selected the S&P Semiconductor Select Index as the peer group of
companies to use when measuring TSR performance.  The Compensation
Committee  has the authority to use discretion in determining the ultimate peer
group if the number of peer group companies falls below ten within the
Performance Period. 

 

b.If a company in the peer group is no longer the surviving entity or a publicly
traded company, the company shall no longer be considered a peer company when
calculating the performance comparison.

 

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Schedule 2

Peer Group of Companies

 

S&P Semiconductor Select Index

 

 

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