Exhibit 10.25

 

INTEGRATED DEVICE TECHNOLOGY, INC.
2004 EQUITY PLAN

 

ARTICLE 1

 

PURPOSE

 

The purpose of the Integrated Device Technology, Inc. 2004 Equity Plan (the
“Plan”) is to promote the success and enhance the value of Integrated Device
Technology, Inc. (the “Company”) by linking the personal interests of the
members of the Board, Employees, and Consultants to those of Company
stockholders and by providing such individuals with an incentive for outstanding
performance to generate superior returns to Company stockholders.  The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of members of the Board, Employees,
and Consultants upon whose judgment, interest, and special effort the successful
conduct of the Company’s operation is largely dependent.

 

ARTICLE 2

 

DEFINITIONS AND CONSTRUCTION

 

Wherever the following terms are used in the Plan they shall have the meanings
specified below, unless the context clearly indicates otherwise.  The singular
pronoun shall include the plural where the context so indicates.

 

2.1                                 “Award” means an Option, a Restricted Stock
award, a Stock Appreciation Right award, a Performance Share award, a
Performance Stock Unit award, a Restricted Stock Unit award, an Other
Stock-Based Award, or a Performance-Based Award granted to a Participant
pursuant to the Plan.

 

2.2                                 “Award Agreement” means any written or
electronic agreement, contract, or other instrument or document evidencing an
Award.

 

2.3                                 “Board” means the Board of Directors of the
Company.

 

2.4                                 “Change in Control” means and includes each
of the following:

 

(a)                                  The acquisition, directly or indirectly, by
any “person” or “group” (as those terms are defined in Sections 3(a)(9), 13(d)
and 14(d) of the Exchange Act and the rules thereunder) of “beneficial
ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of
securities entitled to vote generally in the election of directors (“voting
securities”) of the Company that represent 50% or more of the combined voting
power of the Company’s then outstanding voting securities, other than

 

(i)                                     An acquisition by a trustee or other
fiduciary holding securities under any employee benefit plan (or related trust)
sponsored or maintained by the Company or any person controlled by the Company
or by any employee benefit plan (or related trust) sponsored or maintained by
the Company or any person controlled by the Company, or

 

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(ii)                                  An acquisition of voting securities by the
Company or a corporation owned, directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of the
stock of the Company, or

 

(iii)                               An acquisition of voting securities pursuant
to a transaction described in Section 2.4(b) below that would not be a Change in
Control under Section 2.4(b);

 

Notwithstanding the foregoing, the following event shall not constitute an
“acquisition” by any person or group for purposes of this Section 2.4: an
acquisition of the Company’s securities by the Company which causes the
Company’s voting securities beneficially owned by a person or group to represent
50% or more of the combined voting power of the Company’s then outstanding
voting securities; provided, however, that if a person or group shall become the
beneficial owner of 50% or more of the combined voting power of the Company’s
then outstanding voting securities by reason of share acquisitions by the
Company as described above and shall, after such share acquisitions by the
Company, become the beneficial owner of any additional voting securities of the
Company, then such acquisition shall constitute a Change in Control; or

 

(b)                                 The consummation by the Company (whether
directly involving the Company or indirectly involving the Company through one
or more intermediaries) of (x) a merger, consolidation, reorganization, or
business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets or (z) the acquisition of assets or stock of another
entity, in each case other than a transaction:

 

(i)                                     Which results in the Company’s voting
securities outstanding immediately before the transaction continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or indirectly,
all or substantially all of the Company’s assets or otherwise succeeds to the
business of the Company (the Company or such person, the “Successor Entity”))
directly or indirectly, at least a majority of the combined voting power of the
Successor Entity’s outstanding voting securities immediately after the
transaction, and

 

(ii)                                  After which no person or group
beneficially owns voting securities representing 50% or more of the combined
voting power of the Successor Entity; provided, however, that no person or group
shall be treated for purposes of this Section 2.4(b)(ii) as beneficially owning
50% or more of combined voting power of the Successor Entity solely as a result
of the voting power held in the Company prior to the consummation of the
transaction; or

 

(c)                                  The Company’s stockholders approve a
liquidation or dissolution of the Company.

 

The Committee shall have full and final authority, which shall be exercised in
its discretion, to determine conclusively whether a Change in Control of the
Company has occurred pursuant to the above definition, and the date of the
occurrence of such Change in Control and any incidental matters relating
thereto.

 

2.5                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

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2.6                                 “Committee” means the committee of the Board
described in Article 12.

 

2.7                                 “Consultant” means any consultant, adviser
or director if:

 

(a)                                  The consultant, adviser or director renders
bona fide services to the Company or any Subsidiary, including, without
limitation service as a member of the board of directors of a Subsidiary;

 

(b)                                 The services rendered by the consultant,
adviser or director are not in connection with the offer or sale of securities
in a capital-raising transaction and do not directly or indirectly promote or
maintain a market for the Company’s securities; and

 

(c)                                  The consultant, adviser or director is a
natural person who has contracted directly with the Company to render such
services.

 

2.8                                 “Covered Employee” means an Employee who is,
or could be, a “covered employee” within the meaning of Section 162(m) of the
Code.

 

2.9                                 “Disability” means that the Participant
qualifies to receive long-term disability payments under the Company’s long-term
disability insurance program, as it may be amended from time to time.

 

2.10                           “Effective Date” shall have the meaning set forth
in Section 13.1.

 

2.11                           “Employee” means any officer or other employee
(as defined in accordance with Section 3401(c) of the Code) of the Company or
any Subsidiary.

 

2.12                           “Exchange Act” means the Securities Exchange Act
of 1934, as amended.

 

2.13                           “Fair Market Value” means, as of any given date,
the fair market value of a share of Stock on the immediately preceding date
determined by such methods or procedures as may be established from time to time
by the Committee.  Unless otherwise determined by the Committee, the Fair Market
Value of a share of Stock as of any date shall be the closing trading price for
a share of Stock as reported on the national securities exchange on which the
Stock is then listed for the immediately preceding date or, if no such price is
reported for that date, the closing trading price on the next preceding date for
which a trading price was reported.

 

2.14                           “Full Value Award” means any Award other than an
Option, SAR or other Award for which the Participant pays the intrinsic value
(whether directly or by forgoing a right to receive a cash payment from the
Company).

 

2.15                           “Hostile Takeover” means and includes each of the
following:

 

(a)                                  a transaction or series of related
transactions pursuant to which a person or related group of persons, other than
the Company or a person that directly or indirectly controls, is controlled by
or is under common control with the Company, becomes the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of 25% or more of the
Company’s

 

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outstanding voting stock pursuant to a tender or exchange offer that the Board
does not recommend and that the stockholders of the Company accept; or

 

(b)                                 during any period of two consecutive years,
individuals who, at the beginning of such period, constitute the Board together
with any new director(s) (other than a director designated by a person who shall
have entered into an agreement with the Company to effect a transaction
described in Section 2.4(a) or Section 2.4(b)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of the two year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof.

 

2.16                           “Incentive Stock Option” means an Option that is
intended to meet the requirements of Section 422 of the Code or any successor
provision thereto.

 

2.17                           “Independent Director” means a member of the
Board who is not an Employee of the Company.

 

2.18                           “Non-Employee Director” means a member of the
Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3)
of the Exchange Act, or any successor definition adopted by the Board.

 

2.19                           “Non-Qualified Stock Option” means an Option that
is not intended to be an Incentive Stock Option.

 

2.20                           “Option” means a right granted to a Participant
pursuant to Article 5 of the Plan to purchase a specified number of shares of
Stock at a specified price during specified time periods.  An Option may be
either an Incentive Stock Option or a Non-Qualified Stock Option.

 

2.21                           “Other Stock-Based Award” means an Award granted
or denominated in Stock or units of Stock pursuant to Section 8.4 of the Plan.

 

2.22                           “Participant” means any member of  the Board,
Consultant or Employee.

 

2.23                           “Performance-Based Award” means an Award granted
to selected Covered Employees pursuant to Articles 6 and 8, but which is subject
to the terms and conditions set forth in Article 9.  All Performance-Based
Awards are intended to qualify as Qualified Performance-Based Compensation.

 

2.24                           “Performance Bonus Award” has the meaning set
forth in Section 8.5.

 

2.25                           “Performance Criteria” means the criteria that
the Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period.  The Performance
Criteria that will be used to establish Performance Goals are limited to the
following: net earnings (either before or after interest, taxes, depreciation
and amortization), economic value-added (as determined by the Committee), sales
or revenue, net income (either before or after taxes), operating earnings, cash
flow (including, but not limited to, operating cash flow and free cash flow),
cash flow return on capital, return on net assets, return on stockholders’

 

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equity, return on assets, return on capital, stockholder returns, return on
sales, gross or net profit margin, productivity, expense, margins, operating
efficiency, customer satisfaction, working capital, earnings per share, price
per share of Stock, and market share, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to
results of a peer group.  The Committee shall, within the time prescribed by
Section 162(m) of the Code, define in an objective fashion the manner of
calculating the Performance Criteria it selects to use for such Performance
Period for such Participant.

 

2.26                           “Performance Goals” means, for a Performance
Period, the goals established in writing by the Committee for the Performance
Period based upon the Performance Criteria.  Depending on the Performance
Criteria used to establish such Performance Goals, the Performance Goals may be
expressed in terms of overall Company performance or the performance of a
division, business unit, or an individual.  The Committee, in its discretion,
may, within the time prescribed by Section 162(m) of the Code, adjust or modify
the calculation of Performance Goals for such Performance Period in order to
prevent the dilution or enlargement of the rights of Participants (i) in the
event of, or in anticipation of, any unusual or extraordinary corporate item,
transaction, event, or development, or (ii) in recognition of, or in
anticipation of, any other unusual or nonrecurring events affecting the Company,
or the financial statements of the Company, or in response to, or in
anticipation of, changes in applicable laws, regulations, accounting principles,
or business conditions.

 

2.27                           “Performance Period” means the one or more
periods of time, which may be of varying and overlapping durations, as the
Committee may select, over which the attainment of one or more Performance Goals
will be measured for the purpose of determining a Participant’s right to, and
the payment of, a Performance-Based Award.

 

2.28                           “Performance Share” means a right granted to a
Participant pursuant to Article 8, to receive Stock, the payment of which is
contingent upon achieving certain performance goals established by the
Committee.

 

2.29                           “Performance Stock Unit” means a right granted to
a Participant pursuant to Article 8, to receive Stock, the payment of which is
contingent upon achieving certain performance goals established by the
Committee.

 

2.30                           “Plan” means this Integrated Device Technology,
Inc. 2004 Equity Plan, as it may be amended from time to time.

 

2.31                           “Qualified Performance-Based Compensation” means
any compensation that is intended to qualify as “qualified performance-based
compensation” as described in Section 162(m)(4)(C) of the Code.

 

2.32                           “Restricted Stock” means Stock awarded to a
Participant pursuant to Article 6 that is subject to certain restrictions and
may be subject to risk of forfeiture.

 

2.33                           “Restricted Stock Unit” means an Award granted
pursuant to Section 8.3.

 

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2.34                           “Stock” means the common stock of the Company,
par value $0.001 per share, and such other securities of the Company that may be
substituted for Stock pursuant to Article 11.

 

2.35                           “Stock Appreciation Right” or “SAR” means a right
granted pursuant to Article 7 to receive a payment equal to the excess of the
Fair Market Value of a specified number of shares of Stock on the date the SAR
is exercised over the Fair Market Value on the date the SAR was granted as set
forth in the applicable Award Agreement.

 

2.36                           “Subsidiary” means any corporation or other
entity of which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company.

 

ARTICLE 3

 

SHARES SUBJECT TO THE PLAN

 

3.1                                 Number of Shares.

 

(a)                                  Subject to Article 11 and Sections 3.1(b)
and 3.4, the aggregate number of shares of Stock which may be issued or
transferred pursuant to Awards under the Plan shall be 2,500,000 shares.

 

(b)                                 Notwithstanding Section 3.1(a): (i) the
Committee may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or
substitute awards), and make adjustments if the number of shares of Stock
actually delivered differs from the number of shares previously counted in
connection with an Award; (ii) shares of Stock that are potentially deliverable
under any Award that expires or is canceled, forfeited, settled in cash or
otherwise terminated without a delivery of such shares to the Participant will
not be counted as issued or delivered under the Plan; (iii) shares of Stock that
have been issued in connection with any Award (e.g., Restricted Stock) that is
canceled, forfeited, or settled in cash such that those shares are returned to
the Company will again be available for Awards; and (iv) shares of Stock
withheld in payment of the exercise price or taxes relating to any Award and
shares equal to the number surrendered in payment of any exercise price or taxes
relating to any Award shall be deemed to constitute shares not delivered to the
Participant and shall be deemed to be available for Awards under the Plan.  In
addition, in the case of any Award granted in substitution for an award of a
company or business acquired by the Company or a subsidiary or affiliate, shares
of Stock issued or issuable in connection with such substitute Award shall not
be counted against the number of shares reserved under the Plan, but shall be
available under the Plan by virtue of the Company’s assumption of the plan or
arrangement of the acquired company or business.  This Section 3.1 shall apply
to the share limit imposed to conform to the regulations promulgated under the
Code with respect to Incentive Stock Options only to the extent consistent with
applicable regulations relating to Incentive Stock Options under the Code and no
shares of Stock may again be optioned, granted or awarded if such action would
cause an Incentive Stock Option to fail to qualify as an Incentive Stock Option
under Section 422 of the Code.  Because shares will count against the number
reserved in Section 3.1 upon delivery, the Committee may, subject to the share
counting rules under this

 

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Section 3.1, determine that Awards may be outstanding that relate to a greater
number of shares than the aggregate remaining available under the Plan, so long
as Awards will not result in delivery and vesting of shares in excess of the
number then available under the Plan.

 

3.2                                 Stock Distributed.  Any Stock distributed
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Stock, treasury Stock or Stock purchased on the open market.

 

3.3                                 Limitation on Number of Shares Subject to
Awards.  Notwithstanding any provision in the Plan to the contrary, and subject
to Article 11, the maximum number of shares of Stock with respect to one or more
Awards that may be granted to any one Participant during any fiscal year
(measured from the date of any grant) shall be 1,000,000.

 

3.4                                 Limitation on Full Value Awards. 
Notwithstanding any provision in the Plan to the contrary, and subject to
Article 11, the maximum number of shares of Stock that may be issued or
transferred pursuant to Full Value Awards shall be 1,000,000.

 

ARTICLE 4

 

ELIGIBILITY AND PARTICIPATION

 

4.1                                 Eligibility.

 

(a)                                  General.  Persons eligible to participate
in this Plan include Employees, Consultants and all members of the Board, as
determined by the Committee.

 

(b)                                 Foreign Participants.  In order to assure
the viability of Awards granted to Participants employed in foreign countries,
the Committee may provide for such special terms as it may consider necessary or
appropriate to accommodate differences in local law, tax policy, or custom. 
Moreover, the Committee may approve such supplements to, or amendments,
restatements, or alternative versions of, the Plan as it may consider necessary
or appropriate for such purposes without thereby affecting the terms of the Plan
as in effect for any other purpose; provided, however, that no such supplements,
amendments, restatements, or alternative versions shall increase the share
limitations contained in Sections 3.1 and 3.3 of the Plan.

 

4.2                                 Participation.  Subject to the provisions of
the Plan, the Committee may, from time to time, select from among all eligible
individuals, those to whom Awards shall be granted and shall determine the
nature and amount of each Award.  No individual shall have any right to be
granted an Award pursuant to this Plan.

 

4.3                                 Limitation on Independent Director Grants. 
Notwithstanding anything herein to the contrary, the grant of any Award to an
Independent Director shall be made by the Board pursuant to a written
non-discretionary formula established by the Committee, or any successor
committee thereto carrying out its responsibilities on the date of grant of any
such Award (the “Non-Employee Director Equity Compensation Policy”).  The
Non-Employee Director Equity Compensation Policy shall set forth the type of
Award(s) to be granted to Independent Directors, the number of shares of Common
Stock to be subject to Independent Director Awards, the conditions on which such
Awards shall be granted, become exercisable and/or payable and

 

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expire, and such other terms and conditions as the Committee (or such other
successor committee as described above).

 

ARTICLE 5

 

STOCK OPTIONS

 

5.1                                 General.  The Committee is authorized to
grant Options to Participants on the following terms and conditions:

 

(a)                                  Exercise Price.  The exercise price per
share of Stock subject to an Option shall be determined by the Committee and set
forth in the Award Agreement; provided that the exercise price for any Option
shall not be less than 100% of the Fair Market Value of a share of Stock on the
date of grant.

 

(b)                                 Time and Conditions of Exercise.  The
Committee shall determine the time or times at which an Option may be exercised
in whole or in part; provided that the term of any Option granted under the Plan
shall not exceed ten years.  The Committee shall also determine the performance
or other conditions, if any, that must be satisfied before all or part of an
Option may be exercised.

 

(c)                                  Payment.  The Committee shall determine the
methods by which the exercise price of an Option may be paid, the form of
payment, including, without limitation, cash; shares of Stock held for longer
than 6 months having a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof; or other
property acceptable to the Committee (including through the delivery of a notice
that the Participant has placed a market sell order with a broker with respect
to shares of Stock then issuable upon exercise of the Option, and that the
broker has been directed to pay a sufficient portion of the net proceeds of the
sale to the Company in satisfaction of the Option exercise price; provided that
payment of such proceeds is made to the Company upon settlement of such sale),
and the methods by which shares of Stock shall be delivered or deemed to be
delivered to Participants.  Notwithstanding any other provision of the Plan to
the contrary, no Participant who is a member of the Board or an “executive
officer” of the Company within the meaning of Section 13(k) of the Exchange Act
shall be permitted to pay the exercise price of an Option in any method which
would violate Section 13(k) of the Exchange Act.

 

(d)                                 Evidence of Grant.  All Options shall be
evidenced by a written or electronic Award Agreement between the Company and the
Participant.  The Award Agreement shall include such additional provisions as
may be specified by the Committee.

 

5.2                                 Incentive Stock Options.  Incentive Stock
Options may be granted only to Employees of the Company or any parent or
subsidiary corporation of the Company (within the meaning of Code Sections 424
(e) and (f)) and the terms of any Incentive Stock Options granted pursuant to
the Plan must comply with the following additional provisions of this Section
5.2:

 

(a)                                  Exercise Price.  The exercise price per
share of Stock shall be set by the Committee; provided that the exercise price
for any Incentive Stock Option shall not be less than 100% of the Fair Market
Value on the date of grant.

 

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(b)                                 Expiration of Option.  An Incentive Stock
Option may not be exercised to any extent by anyone after the first to occur of
the following events:

 

(i)                                     Ten years from the date it is granted,
unless an earlier time is set in the Award Agreement.

 

(ii)                                  One year after the date of the
Participant’s termination of employment or service on account of Disability or
death.  Upon the Participant’s Disability or death, any Incentive Stock Options
exercisable at the Participant’s Disability or death may be exercised by the
Participant’s legal representative or representatives, by the person or persons
entitled to do so pursuant to the Participant’s last will and testament, or, if
the Participant fails to make testamentary disposition of such Incentive Stock
Option or dies intestate, by the person or persons entitled to receive the
Incentive Stock Option pursuant to the applicable laws of descent and
distribution.

 

(c)                                  Individual Dollar Limitation.  The
aggregate Fair Market Value (determined as of the time the Option is granted) of
all shares of Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed $100,000 or
such other limitation as imposed by Section 422(d) of the Code, or any successor
provision.  To the extent that Incentive Stock Options are first exercisable by
a Participant in excess of such limitation, the excess shall be considered
Non-Qualified Stock Options.

 

(d)                                 Ten Percent Owners.  An Incentive Stock
Option shall be granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of all
classes of Stock of the Company or any parent or subsidiary corporation of the
Company (within the meaning of Code Sections 424(e) and (f)) only if such Option
is granted at a price that is not less than 110% of Fair Market Value on the
date of grant and the Option is exercisable for no more than five years from the
date of grant.

 

(e)                                  Transfer Restriction.  The Participant
shall give the Company prompt notice of any disposition of shares of Stock
acquired by exercise of an Incentive Stock Option within (i) two years from the
date of grant of such Incentive Stock Option or (ii) one year after the transfer
of such shares of Stock to the Participant.

 

(f)                                    Expiration of Incentive Stock Options. 
No Award of an Incentive Stock Option may be made pursuant to this Plan after
the tenth anniversary of the Effective Date.

 

(g)                                 Right to Exercise.  During a Participant’s
lifetime, an Incentive Stock Option may be exercised only by the Participant.

 

5.3                                 Substitution of Stock Appreciation Rights. 
The Committee may provide in the Award Agreement evidencing the grant of an
Option that the Committee, in its sole discretion, shall have to right to
substitute a Stock Appreciation Right for such Option at any time prior to or
upon exercise of such Option, subject to the provisions of Section 7.2 hereof;
provided that such Stock Appreciation Right shall be exercisable for the same
number of shares of Stock as such substituted Option would have been exercisable
for.

 

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ARTICLE 6

 

RESTRICTED STOCK AWARDS

 

6.1                                 Grant of Restricted Stock.  The Committee is
authorized to make Awards of Restricted Stock to any Participant selected by the
Committee in such amounts and subject to such terms and conditions as determined
by the Committee.  All Awards of Restricted Stock shall be evidenced by a
written or electronic Restricted Stock Award Agreement.

 

6.2                                 Issuance and Restrictions.  Subject to
Section 10.6, Restricted Stock shall be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including,
without limitation, limitations on the right to vote Restricted Stock or the
right to receive dividends on the Restricted Stock).  These restrictions may
lapse separately or in combination at such times, pursuant to such
circumstances, in such installments, or otherwise, as the Committee determines
at the time of the grant of the Award or thereafter.

 

6.3                                 Forfeiture.  Except as otherwise determined
by the Committee at the time of the grant of the Award or thereafter, upon
termination of employment or service during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be
forfeited; provided, however, that, except as otherwise provided by Section
10.6, the Committee may (a) provide in any Restricted Stock Award Agreement that
restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of terminations resulting from specified
causes, and (b) in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.

 

6.4                                 Certificates for Restricted Stock. 
Restricted Stock granted pursuant to the Plan may be evidenced in such manner as
the Committee shall determine.  If certificates representing shares of
Restricted Stock are registered in the name of the Participant, certificates
must bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and the Company may, at its
discretion, retain physical possession of the certificate until such time as all
applicable restrictions lapse.

 

ARTICLE 7

 

STOCK APPRECIATION RIGHTS

 

7.1                                 Grant of Stock Appreciation Rights.  A Stock
Appreciation Right may be granted to any Participant selected by the Committee. 
A Stock Appreciation Right may be granted (a) in connection and simultaneously
with the grant of an Option, (b) with respect to a previously granted Option, or
(c) independent of an Option.  A Stock Appreciation Right shall be subject to
such terms and conditions not inconsistent with the Plan as the Committee shall
impose and shall be evidenced by an Award Agreement.

 

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7.2                                 Terms of Stock Appreciation Rights.

 

(a)                                  A Stock Appreciation Right may or may not
be related to an Option and shall have a term set by the Committee.  A Stock
Appreciation Right shall be exercisable in such installments as the Committee
may determine.  A Stock Appreciation Right shall cover such number of shares of
Stock as the Committee may determine.  The exercise price per share of Stock
subject to each Stock Appreciation Right shall be set by the Committee; provided
that the exercise price for any Stock Appreciation Right shall not be less than
100% of the Fair Market Value on the date of grant; and provided, further, that,
the Committee in its sole and absolute discretion may provide that the Stock
Appreciation Right may be exercised subsequent to a termination of employment or
service, as applicable, or following a Change in Control of the Company, or
because of the Participant’s retirement, death or disability, or otherwise.

 

(b)                                 A Stock Appreciation Right shall entitle the
Participant (or other person entitled to exercise the Stock Appreciation Right
pursuant to the Plan) to exercise all or a specified portion of the Stock
Appreciation Right (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount determined by multiplying the difference
obtained by subtracting the exercise price per share of the Stock Appreciation
Right from the Fair Market Value of a share of Stock on the date of exercise of
the Stock Appreciation Right by the number of shares of Stock with respect to
which the Stock Appreciation Right shall have been exercised, subject to any
limitations the Committee may impose.

 

7.3                                 Payment and Limitations on Exercise.

 

(A)                                  PAYMENT OF THE AMOUNTS DETERMINED UNDER
SECTION 7.2 ABOVE SHALL BE IN CASH, IN STOCK (BASED ON ITS FAIR MARKET VALUE AS
OF THE DATE THE STOCK APPRECIATION RIGHT IS EXERCISED) OR A COMBINATION OF BOTH,
AS DETERMINED BY THE COMMITTEE.

 

(B)                                 TO THE EXTENT ANY PAYMENT UNDER SECTION 7.2
IS EFFECTED IN STOCK IT SHALL BE MADE SUBJECT TO SATISFACTION OF ALL PROVISIONS
OF ARTICLE 5 ABOVE PERTAINING TO OPTIONS.

 

ARTICLE 8

 

OTHER TYPES OF AWARDS

 

8.1                                 Performance Share Awards.  Any Participant
selected by the Committee may be granted one or more Performance Share awards
which shall be denominated in a number of shares of Stock and which may be
linked to any one or more of the Performance Criteria or other specific
performance criteria determined appropriate by the Committee, in each case on a
specified date or dates or over any period or periods determined by the
Committee.  In making such determinations, the Committee shall consider (among
such other factors as it deems relevant in light of the specific type of award)
the contributions, responsibilities and other compensation of the particular
Participant.

 

8.2                                 Performance Stock Units.  Any Participant
selected by the Committee may be granted one or more Performance Stock Unit
awards which shall be denominated in units of value including dollar value of
shares of Stock and which may be linked to any one or more of

 

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the Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over
any period or periods determined by the Committee.  In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.

 

8.3                                 Restricted Stock Units.  The Committee is
authorized to make Awards of Restricted Stock Units to any Participant selected
by the Committee in such amounts and subject to such terms and conditions as
determined by the Committee.  At the time of grant, the Committee shall specify
the date or dates on which the Restricted Stock Units shall become fully vested
and nonforfeitable, and may specify such conditions to vesting as it deems
appropriate subject to Section 10.6.  At the time of grant, the Committee shall
specify the maturity date applicable to each grant of Restricted Stock Units
which shall be no earlier than the vesting date or dates of the Award and may be
determined at the election of the grantee.  On the maturity date, the Company
shall transfer to the Participant one unrestricted, fully transferable share of
Stock for each Restricted Stock Unit scheduled to be paid out on such date and
not previously forfeited.  The Committee shall specify the purchase price, if
any, to be paid by the grantee to the Company for such shares of Stock.

 

8.4                                 Other Stock-Based Awards.  Any Participant
selected by the Committee may be granted one or more Awards that provide
Participants with shares of Stock or the right to purchase shares of Stock or
that have a value derived from the value of, or an exercise or conversion
privilege at a price related to, or that are otherwise payable in shares of
Stock and which may be linked to any one or more of the Performance Criteria or
other specific performance criteria determined appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined
by the Committee subject to Section 10.6.  In making such determinations, the
Committee shall consider (among such other factors as it deems relevant in light
of the specific type of Award) the contributions, responsibilities and other
compensation of the particular Participant.

 

8.5                                 Performance Bonus Awards.  Any Participant
selected by the Committee may be granted one or more Performance-Based Awards in
the form of a cash bonus (a “Performance Bonus Award”) payable upon the
attainment of Performance Goals that are established by the Committee and relate
to one or more of the Performance Criteria, in each case on a specified date or
dates or over any period or periods determined by the Committee subject to
Section 10.6.  Any such Performance Bonus Award paid to a Covered Employee shall
be based upon objectively determinable bonus formulas established in accordance
with Article 9.  The maximum amount of any Performance Bonus Award payable to a
Covered Employee with respect to any calendar year shall not exceed $1,000,000.

 

8.6                                 Term.  Except as otherwise provided herein,
the term of any Award of  Performance Shares, Performance Stock Units,
Restricted Stock Units or Other Stock-Based Award shall be set by the Committee
in its discretion.

 

8.7                                 Exercise or Purchase Price.  The Committee
may establish the exercise or purchase price, if any, of any Award of
Performance Shares, Performance Stock Units, Restricted Stock Units or Other
Stock-Based Award; provided, however, that such price shall not

 

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be less than the par value of a share of Stock on the date of grant, unless
otherwise permitted by applicable state law.

 

8.8                                 Exercise Upon Termination of Employment or
Service.  An Award of Performance Shares, Performance Stock Units, Restricted
Stock Units and Other Stock-Based Award shall only be exercisable or payable
while the Participant is an Employee, Consultant or a member of the Board, as
applicable; provided, however, that the Committee in its sole and absolute
discretion may provide that an Award of Performance Shares, Performance Stock
Units, Restricted Stock Units or Other Stock-Based Award may be exercised or
paid subsequent to a termination of employment or service, as applicable, or
following a Change in Control of the Company, or because of the Participant’s
retirement, death or disability, or otherwise; provided, however, that any such
provision with respect to Performance Shares or Performance Stock Units shall be
subject to the requirements of Section 162(m) of the Code that apply to
Qualified Performance-Based Compensation.

 

8.9                                 Form of Payment.  Payments with respect to
any Awards granted under this Article 8 shall be made in cash, in Stock or a
combination of both, as determined by the Committee.

 

8.10                           Award Agreement.  All Awards under this Article 8
shall be subject to such additional terms and conditions as determined by the
Committee and shall be evidenced by a written or electronic Award Agreement.

 

ARTICLE 9

 

PERFORMANCE-BASED AWARDS

 

9.1                                 Purpose.  The purpose of this Article 9 is
to provide the Committee the ability to qualify Awards other than Options and
SARs and that are granted pursuant to Articles 6 and 8 as Qualified
Performance-Based Compensation.  If the Committee, in its discretion, decides to
grant a Performance-Based Award to a Covered Employee, the provisions of this
Article 9 shall control over any contrary provision contained in Articles 6 or
8; provided, however, that the Committee may in its discretion grant Awards to
Covered Employees that are based on Performance Criteria or Performance Goals
but that do not satisfy the requirements of this Article 9.

 

9.2                                 Applicability.  This Article 9 shall apply
only to those Covered Employees selected by the Committee to receive
Performance-Based Awards.  The designation of a Covered Employee as a
Participant for a Performance Period shall not in any manner entitle the
Participant to receive an Award for the period.  Moreover, designation of a
Covered Employee as a Participant for a particular Performance Period shall not
require designation of such Covered Employee as a Participant in any subsequent
Performance Period and designation of one Covered Employee as a Participant
shall not require designation of any other Covered Employees as a Participant in
such period or in any other period.

 

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9.3                                 Procedures with Respect to Performance-Based
Awards.  To the extent necessary to comply with the Qualified Performance-Based
Compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
any Award granted under Articles 6 and 8 which may be granted to one or more
Covered Employees, no later than ninety (90) days following the commencement of
any fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of
the Code), the Committee shall, in writing, (a) designate one or more Covered
Employees, (b) select the Performance Criteria applicable to the Performance
Period, (c) establish the Performance Goals, and amounts of such Awards, as
applicable, which may be earned for such Performance Period, and (d) specify the
relationship between Performance Criteria and the Performance Goals and the
amounts of such Awards, as applicable, to be earned by each Covered Employee for
such Performance Period.  Following the completion of each Performance Period,
the Committee shall certify in writing whether the applicable Performance Goals
have been achieved for such Performance Period.  In determining the amount
earned by a Covered Employee, the Committee shall have the right to reduce or
eliminate (but not to increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem
relevant to the assessment of individual or corporate performance for the
Performance Period.

 

9.4                                 Payment of Performance-Based Awards.  Unless
otherwise provided in the applicable Award Agreement, a Participant must be
employed by the Company or a Subsidiary on the day a Performance-Based Award for
such Performance Period is paid to the Participant.  Furthermore, a Participant
shall be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved.

 

9.5                                 Additional Limitations.  Notwithstanding any
other provision of the Plan, any Award which is granted to a Covered Employee
and is intended to constitute Qualified Performance-Based Compensation shall be
subject to any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as qualified
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and the Plan shall be deemed amended to the extent necessary to conform to such
requirements.

 

ARTICLE 10

 

PROVISIONS APPLICABLE TO AWARDS

 

10.1                           Stand-Alone and Tandem Awards.  Awards granted
pursuant to the Plan may, in the discretion of the Committee, be granted either
alone, in addition to, or in tandem with, any other Award granted pursuant to
the Plan. Awards granted in addition to or in tandem with other Awards may be
granted either at the same time as or at a different time from the grant of such
other Awards.

 

10.2                           Award Agreement.  Awards under the Plan shall be
evidenced by Award Agreements that set forth the terms, conditions and
limitations for each Award which may include the term of an Award, the
provisions applicable in the event the Participant’s employment or service
terminates, and the Company’s authority to unilaterally or bilaterally

 

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amend, modify, suspend, cancel or rescind an Award.

 

10.3                           Limits on Transfer.  No right or interest of a
Participant in any Award may be pledged, encumbered, or hypothecated to or in
favor of any party other than the Company or a Subsidiary, or shall be subject
to any lien, obligation, or liability of such Participant to any other party
other than the Company or a Subsidiary.  Except as otherwise provided by the
Committee, no Award shall be assigned, transferred, or otherwise disposed of by
a Participant other than by will or the laws of descent and distribution.  The
Committee by express provision in the Award or an amendment thereto may permit
an Award (other than an Incentive Stock Option) to be transferred to, exercised
by and paid to certain persons or entities related to the Participant, including
but not limited to members of the Participant’s family, charitable institutions,
or trusts or other entities whose beneficiaries or beneficial owners are members
of the Participant’s family and/or charitable institutions, or to such other
persons or entities as may be expressly approved by the Committee, pursuant to
such conditions and procedures as the Committee may establish.  Any permitted
transfer shall be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a “blind trust” in connection with the Participant’s
termination of employment or service with the Company or a Subsidiary to assume
a position with a governmental, charitable, educational or similar non-profit
institution) and on a basis consistent with the Company’s lawful issue of
securities.

 

10.4                           Beneficiaries.  Notwithstanding Section 10.3, a
Participant may, in the manner determined by the Committee, designate a
beneficiary to exercise the rights of the Participant and to receive any
distribution with respect to any Award upon the Participant’s death.  A
beneficiary, legal guardian, legal representative, or other person claiming any
rights pursuant to the Plan is subject to all terms and conditions of the Plan
and any Award Agreement applicable to the Participant, except to the extent the
Plan and Award Agreement otherwise provide, and to any additional restrictions
deemed necessary or appropriate by the Committee.  If the Participant is married
and resides in a community property state, a designation of a person other than
the Participant’s spouse as his or her beneficiary with respect to more than 50%
of the Participant’s interest in the Award shall not be effective without the
prior written consent of the Participant’s spouse.  If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant’s will or the laws of descent and
distribution.  Subject to the foregoing, a beneficiary designation may be
changed or revoked by a Participant at any time provided the change or
revocation is filed with the Committee.

 

10.5                           Stock Certificates.  Notwithstanding anything
herein to the contrary, the Company shall not be required to issue or deliver
any certificates evidencing shares of Stock pursuant to the exercise of any
Award, unless and until the Board has determined, with advice of counsel, that
the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Stock are listed or traded. 
All Stock certificates delivered pursuant to the Plan are subject to any
stop-transfer orders and other restrictions as the Committee deems necessary or
advisable to comply with federal, state, or foreign jurisdiction, securities or
other laws, rules and regulations and the rules of any national securities
exchange or automated quotation system on which the Stock is listed, quoted, or
traded.  The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock.  In addition to

 

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the terms and conditions provided herein, the Board may require that a
Participant make such reasonable covenants, agreements, and representations as
the Board, in its discretion, deems advisable in order to comply with any such
laws, regulations, or requirements. The Committee shall have the right to
require any Participant to comply with any timing or other restrictions with
respect to the settlement or exercise of any Award, including a window-period
limitation, as may be imposed in the discretion of the Committee.

 

10.6                           Full Value Award Vesting Limitations. 
Notwithstanding any other provision of this Plan to the contrary, Full Value
Awards made to Employees or Consultants shall become vested over a period of not
less than three years (or, in the case of vesting based upon the attainment of
Performance Goals or other performance-based objectives, over a period of not
less than one year) following the date the Award is made; provided, however,
that, notwithstanding the foregoing, Full Value Awards that result in the
issuance of an aggregate of up to 5% of the shares of Stock available pursuant
to Section 3.1(a) may be granted to any one or more Participants without respect
to such minimum vesting provisions.

 

ARTICLE 11

 

CHANGES IN CAPITAL STRUCTURE

 

11.1                           Adjustments.

 

(a)                                  In the event of any stock dividend, stock
split, combination or exchange of shares, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the shares of
Stock or the share price of the Stock, the Committee shall make such
proportionate adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change with respect to (i) the aggregate number and
type of shares that may be issued under the Plan (including, but not limited to,
adjustments of the limitations in Sections 3.1 and 3.3); (ii) the terms and
conditions of any outstanding Awards (including, without limitation, any
applicable Performance Goals or Performance Criteria with respect thereto); and
(iii) the grant or exercise price per share for any outstanding Awards under the
Plan.  Any adjustment affecting an Award intended as Qualified Performance-Based
Compensation shall be made consistent with the requirements of Section 162(m) of
the Code.

 

(b)                                 In the event of any transaction or event
described in Section 11.1(a) or any unusual or nonrecurring transactions or
events affecting the Company, any affiliate of the Company, or the financial
statements of the Company or any affiliate (including without limitation any
Change in Control), or of changes in applicable laws, regulations or accounting
principles, the Committee, in its sole discretion and on such terms and
conditions as it deems appropriate, either by the terms of the Award or by
action taken prior to the occurrence of such transaction or event and either
automatically or upon the Participant’s request, is hereby authorized to take
any one or more of the following actions whenever the Committee determines that
such action is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to any Award under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

 

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(i)                                     To provide for either (A) termination of
any such Award in exchange for an amount of cash, if any, equal to the amount
that could have been attained upon the exercise of such Award or realization of
the Participant’s rights had such Award been currently exercisable or payable or
fully vested or (B) the replacement of such Award with other rights or property
selected by the Committee in its sole discretion;

 

(ii)                                  To provide that such Award be assumed by
the successor or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards covering the stock
of the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices; and

 

(iii)                               To make adjustments in the number and type
of shares of Common Stock (or other securities or property) subject to
outstanding Awards and/or in the terms and conditions of (including the grant or
exercise price), and the criteria included in, outstanding options, rights and
Awards and options, rights and Awards which may be granted in the future.

 

11.2                           Acceleration Upon Change in Control or Hostile
Takeover.  Notwithstanding Section 11.1:

 

(a)                                  If a Change in Control occurs and a
Participant’s Awards are not converted, assumed, or replaced by a successor,
such Awards shall become fully exercisable and all forfeiture restrictions on
such Awards shall lapse not less than five (5) business days before the
consummation of such Change in Control.  Upon, or in anticipation of, a Change
in Control, the Committee may cause any and all Awards outstanding hereunder to
terminate at a specific time in the future, including but not limited to the
date of such Change in Control, and shall give each Participant the right to
exercise such Awards during a period of time (not to be less than five (5) days)
as the Committee, in its sole and absolute discretion, shall determine.  In the
event that the terms of any agreement between the Company or any Company
subsidiary or affiliate and a Participant contains provisions that conflict with
and are more restrictive than the provisions of this Section 11.2, this Section
11.2 shall prevail and control and the more restrictive terms of such agreement
(and only such terms) shall be of no force or effect.

 

(b)                                 If a Hostile Takeover occurs, a
Participant’s Awards shall become fully exercisable and all forfeiture
restrictions on such Awards shall lapse not less than five (5) business days
before the consummation of such Hostile Takeover.

 

(c)                                  In the event that the terms of any
agreement between the Company or any Company subsidiary or affiliate and a
Participant contains provisions that conflict with and are more restrictive than
the provisions of this Section 11.2, this Section 11.2 shall prevail and control
and the more restrictive terms of such agreement (and only such terms) shall be
of no force or effect.

 

11.3                           Outstanding Awards – Certain Mergers.  Subject to
any required action by the stockholders of the Company, in the event that the
Company shall be the surviving corporation in any merger or consolidation
(except a merger or consolidation as a result of which the holders of shares of
Stock receive securities of another corporation), each Award outstanding on the
date of

 

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such merger or consolidation shall pertain to and apply to the securities that a
holder of the number of shares of Stock subject to such Award would have
received in such merger or consolidation.

 

11.4                           Outstanding Awards – Other Changes.  In the event
of any other change in the capitalization of the Company or corporate change
other than those specifically referred to in this Article 11, the Committee may,
in its absolute discretion, make such adjustments in the number and kind of
shares or other securities subject to Awards outstanding on the date on which
such change occurs and in the per share grant or exercise price of each Award as
the Committee may consider appropriate to prevent dilution or enlargement of
rights.

 

11.5                           No Other Rights.  Except as expressly provided in
the Plan, no Participant shall have any rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend, any
increase or decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other
corporation.  Except as expressly provided in the Plan or pursuant to action of
the Committee under the Plan, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to an Award or the grant or exercise price of
any Award.

 

ARTICLE 12

 

ADMINISTRATION

 

12.1                           Committee.  The Plan shall be administered by the
Compensation Committee of the Board.  The Committee shall consist of at least
two individuals, each of whom qualifies as (a) a Non-Employee Director, and (b)
an “outside director” pursuant to Code Section 162(m) and the regulations issued
thereunder.  Reference to the Committee shall refer to the Board if the
Compensation Committee ceases to exist and the Board does not appoint a
successor Committee.

 

12.2                           Action by the Committee.  A majority of the
Committee shall constitute a quorum.  The acts of a majority of the members
present at any meeting at which a quorum is present, and acts approved in
writing by a majority of the Committee in lieu of a meeting, shall be deemed the
acts of the Committee.  Each member of the Committee is entitled to, in good
faith, rely or act upon any report or other information furnished to that member
by any officer or other employee of the Company or any Subsidiary, the Company’s
independent certified public accountants, or any executive compensation
consultant or other professional retained by the Company to assist in the
administration of the Plan.

 

12.3                           Authority of Committee.  Subject to any specific
designation in the Plan, the Committee has the exclusive power, authority and
discretion to:

 

(a)                                  Designate Participants to receive Awards;

 

(b)                                 Determine the type or types of Awards to be
granted to each Participant;

 

(c)                                  Determine the number of Awards to be
granted and the number of shares

 

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of Stock to which an Award will relate;

 

(d)                                 Determine the terms and conditions of any
Award granted pursuant to the Plan, including, but not limited to, the exercise
price, grant price, or purchase price, any reload provision, any restrictions or
limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers
thereof, any provisions related to non-competition and recapture of gain on an
Award, based in each case on such considerations as the Committee in its sole
discretion determines; provided, however, that the Committee shall not have the
authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;

 

(e)                                  Determine whether, to what extent, and
pursuant to what circumstances an Award may be settled in, or the exercise price
of an Award may be paid in, cash, Stock, other Awards, or other property, or an
Award may be canceled, forfeited, or surrendered;

 

(f)                                    Prescribe the form of each Award
Agreement, which need not be identical for each Participant;

 

(g)                                 Decide all other matters that must be
determined in connection with an Award;

 

(h)                                 Establish, adopt, or revise any rules and
regulations as it may deem necessary or advisable to administer the Plan;

 

(i)                                     Interpret the terms of, and any matter
arising pursuant to, the Plan or any Award Agreement; and

 

(j)                                     Make all other decisions and
determinations that may be required pursuant to the Plan or as the Committee
deems necessary or advisable to administer the Plan.

 

12.4                           Decisions Binding.  The Committee’s
interpretation of the Plan, any Awards granted pursuant to the Plan, any Award
Agreement and all decisions and determinations by the Committee with respect to
the Plan are final, binding, and conclusive on all parties.

 

12.5                           Delegation of Authority.  To the extent permitted
by applicable law, the Committee may from time to time delegate to a committee
of one or more members of the Board the authority to grant or amend Awards to
Participants other than (a) senior executives of the Company who are subject to
Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the
Company (or members of the Board) to whom authority to grant or amend Awards has
been delegated hereunder.  Any delegation hereunder shall be subject to the
restrictions and limits that the Committee specifies at the time of such
delegation, and the Committee may at any time rescind the authority so delegated
or appoint a new delegatee.  At all times, the delegatee appointed under this
Section 12.5 shall serve in such capacity at the pleasure of the Committee.

 

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ARTICLE 13

 

EFFECTIVE AND EXPIRATION DATE

 

13.1                           Effective Date.  The Plan is effective as of the
date the Plan is approved by the Company’s stockholders (the “Effective Date”). 
The Plan will be deemed to be approved by the stockholders if it receives the
affirmative vote of the holders of a majority of the shares of stock of the
Company present or represented and entitled to vote at a meeting duly held in
accordance with the applicable provisions of the Company’s Bylaws.

 

13.2                           Expiration Date.  The Plan will expire on, and no
Award may be granted pursuant to the Plan after, the earlier of the tenth
anniversary of (i) the Effective Date or (ii) the date this Plan is approved by
the Board.  Any Awards that are outstanding on the tenth anniversary of the
Effective Date shall remain in force according to the terms of the Plan and the
applicable Award Agreement.

 

ARTICLE 14

 

AMENDMENT, MODIFICATION, AND TERMINATION

 

14.1                           Amendment, Modification, And Termination.  With
the approval of the Board, at any time and from time to time, the Committee may
terminate, amend or modify the Plan; provided, however, that (a) to the extent
necessary and desirable to comply with any applicable law, regulation, or stock
exchange rule, the Company shall obtain stockholder approval of any Plan
amendment in such a manner and to such a degree as required, and (b) stockholder
approval is required for any amendment to the Plan that (i) increases the number
of shares available under the Plan (other than any adjustment as provided by
Article 11), (ii) permits the Committee to grant Options with an exercise price
that is below Fair Market Value on the date of grant, or (iii) permits the
Committee to extend the exercise period for an Option beyond ten years from the
date of grant or (iv) results in a material increase in benefits or a change in
eligibility requirements.  Notwithstanding any provision in this Plan to the
contrary, absent approval of the stockholders of the Company, no Option may be
amended to reduce the per share exercise price of the shares subject to such
Option below the per share exercise price as of the date the Option is granted
and, except as permitted by Article 11, no Option may be granted in exchange
for, or in connection with, the cancellation or surrender of an Option having a
higher per share exercise price.

 

14.2                           Awards Previously Granted.  No termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted pursuant to the Plan without the prior written
consent of the Participant.

 

ARTICLE 15

 

GENERAL PROVISIONS

 

15.1                           No Rights to Awards.  No Participant, employee,
or other person shall have any claim to be granted any Award pursuant to the
Plan, and neither the Company nor the Committee

 

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is obligated to treat Participants, employees, and other persons uniformly.

 

15.2                           No Stockholders Rights.  No Award gives the
Participant any of the rights of a stockholder of the Company unless and until
shares of Stock are in fact issued to such person in connection with such Award.

 

15.3                           Withholding.  The Company or any Subsidiary shall
have the authority and the right to deduct or withhold, or require a Participant
to remit to the Company, an amount sufficient to satisfy federal, state, local
and foreign taxes (including the Participant’s FICA obligation) required by law
to be withheld with respect to any taxable event concerning a Participant
arising as a result of this Plan.  The Committee may in its discretion and in
satisfaction of the foregoing requirement allow a Participant to elect to have
the Company withhold shares of Stock otherwise issuable under an Award (or allow
the return of shares of Stock) having a Fair Market Value equal to the sums
required to be withheld.  Notwithstanding any other provision of the Plan, the
number of shares of Stock which may be withheld with respect to the issuance,
vesting, exercise or payment of any Award (or which may be repurchased from the
Participant of such Award within six months after such shares of Stock were
acquired by the Participant from the Company) in order to satisfy the
Participant’s federal, state, local and foreign income and payroll tax
liabilities with respect to the issuance, vesting, exercise or payment of the
Award shall be limited to the number of shares which have a Fair Market Value on
the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal, state,
local and foreign income tax and payroll tax purposes that are applicable to
such supplemental taxable income.

 

15.4                           No Right to Employment or Services.  Nothing in
the Plan or any Award Agreement shall interfere with or limit in any way the
right of the Company or any Subsidiary to terminate any Participant’s employment
or services at any time, nor confer upon any Participant any right to continue
in the employ or service of the Company or any Subsidiary.

 

15.5                           Unfunded Status of Awards.  The Plan is intended
to be an “unfunded” plan for incentive compensation.  With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Agreement shall give the Participant any rights that
are greater than those of a general creditor of the Company or any Subsidiary.

 

15.6                           Indemnification.  To the extent allowable
pursuant to applicable law, each member of the Committee or of the Board shall
be indemnified and held harmless by the Company from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action or failure to act pursuant to the Plan and against and from any
and all amounts paid by him or her in satisfaction of judgment in such action,
suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled pursuant to the Company’s
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

 

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15.7                           Relationship to other Benefits.  No payment
pursuant to the Plan shall be taken into account in determining any benefits
pursuant to any pension, retirement, savings, profit sharing, group insurance,
welfare or other benefit plan of the Company or any Subsidiary except to the
extent otherwise expressly provided in writing in such other plan or an
agreement thereunder.

 

15.8                           Expenses.  The expenses of administering the Plan
shall be borne by the Company and its Subsidiaries.

 

15.9                           Titles and Headings.  The titles and headings of
the Sections in the Plan are for convenience of reference only and, in the event
of any conflict, the text of the Plan, rather than such titles or headings,
shall control.

 

15.10                     Fractional Shares.  No fractional shares of Stock
shall be issued and the Committee shall determine, in its discretion, whether
cash shall be given in lieu of fractional shares or whether such fractional
shares shall be eliminated by rounding up or down as appropriate.

 

15.11                     Limitations Applicable to Section 16 Persons. 
Notwithstanding any other provision of the Plan, the Plan, and any Award granted
or awarded to any Participant who is then subject to Section 16 of the Exchange
Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule.  To the extent permitted by applicable law, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

 

15.12                     Government and Other Regulations.  The obligation of
the Company to make payment of awards in Stock or otherwise shall be subject to
all applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required.  The Company shall be under no obligation to
register pursuant to the Securities Act of 1933, as amended, any of the shares
of Stock paid pursuant to the Plan.  If the shares paid pursuant to the Plan may
in certain circumstances be exempt from registration pursuant to the Securities
Act of 1933, as amended, the Company may restrict the transfer of such shares in
such manner as it deems advisable to ensure the availability of any such
exemption.

 

15.13                     Governing Law.  The Plan and all Award Agreements
shall be construed in accordance with and governed by the laws of the State of
Delaware.

 

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*  *  *  *  *

 

I hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of Integrated Device Technology, Inc. on July 15, 2004.

 

*  *  *  *  *

 

I hereby certify that the foregoing Plan was approved by the stockholders of
Integrated Device Technology, Inc. on September 16, 2004.

 

Executed on this 16th day of September, 2004.

 

 

 

/s/ CLYDE R. HOSEIN

 

 

Corporate Secretary

 

 

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