Exhibit 10.1

 

SILICON LABORATORIES INC.

2009 STOCK INCENTIVE PLAN

 

MARKET STOCK UNITS GRANT NOTICE AND
MARKET STOCK UNITS AWARD AGREEMENT

U.S. PARTICIPANTS

 

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

 

Participant:

 

 

 

 

 

Grant Date:

 

 

 

 

 

Target Number of Units:

 

                          , subject to adjustment as provided by the Award
Agreement.

 

 

 

Maximum Number of
Units:

 

                          , which is 300% of the Target Number of Units, subject
to adjustment as provided by the Award Agreement.

 

 

 

Performance Period:

 

The Company fiscal years beginning January 2, 2011 and ending December 28, 2013,
subject to Section 9.1 of the Award Agreement.

 

 

 

Performance Criteria:

 

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

 

 

 

Benchmark Index:

 

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

 

 

 

Earned Units:

 

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

 

 

 

Relative Return Factor:

 

A percentage (rounded to the nearest 1/10th of 1% and not greater than 300% or
less than 0%) equal to the sum of 100% plus the product of 2.5 multiplied by the
difference (whether positive or negative) equal to (i) the Company Total
Stockholder Return minus (ii) the Benchmark Index Total Return, as illustrated
by

 

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

 

 

 

Appendix A.

 

 

 

Vesting Date:

 

January 31, 2014, except as otherwise provided by the Award Agreement.

 

 

 

Vested Units:

 

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

 

 

 

Settlement Date:

 

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

 

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

 

 

SILICON LABORATORIES INC.

 

PARTICIPANT

 

 

 

 

 

 

By:

 

 

By:

 

Print Name:

 

 

Print Name:

 

Title:

 

 

 

 

Address:

 

 

Address:

 

 

 

 

 

 

 

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

 

APPENDIX A

 

ILLUSTRATION OF RELATIVE RETURN FACTOR AND RESULTING NUMBER OF EARNED UNITS

 

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

 

Relative Return
Factor

 

Earned Units
(Per 1,000 Target Units)

 

100

 

300.0%

 

3,000

 

95

 

300.0%

 

3,000

 

90

 

300.0%

 

3,000

 

85

 

300.0%

 

3,000

 

80

 

300.0%

 

3,000

 

75

 

287.5%

 

2,875

 

70

 

275.0%

 

2,750

 

65

 

262.5%

 

2,625

 

60

 

250.0%

 

2,500

 

55

 

237.5%

 

2,375

 

50

 

225.0%

 

2,250

 

45

 

212.5%

 

2,125

 

40

 

200.0%

 

2,000

 

35

 

187.5%

 

1,875

 

30

 

175.0%

 

1,750

 

25

 

162.5%

 

1,625

 

20

 

150.0%

 

1,500

 

15

 

137.5%

 

1,375

 

10

 

125.0%

 

1,250

 

5

 

112.5%

 

1,125

 

4

 

110.0%

 

1,100

 

3

 

107.5%

 

1,075

 

2

 

105.0%

 

1,050

 

1

 

102.5%

 

1,025

 

0

 

100.0%

 

1,000

 

-1

 

97.5%

 

975

 

-2

 

95.0%

 

950

 

-3

 

92.5%

 

925

 

-4

 

90.0%

 

900

 

-5

 

87.5%

 

875

 

-10

 

75.0%

 

750

 

-15

 

62.5%

 

625

 

-20

 

50.0%

 

500

 

-25

 

37.5%

 

375

 

-30

 

25.0%

 

250

 

-35

 

12.5%

 

125

 

-40

 

0.0%

 

0

 

-45

 

0.0%

 

0

 

-50

 

0.0%

 

0

 

-55

 

0.0%

 

0

 

-60

 

0.0%

 

0

 

-65

 

0.0%

 

0

 

-70

 

0.0%

 

0

 

-75

 

0.0%

 

0

 

-80

 

0.0%

 

0

 

-85

 

0.0%

 

0

 

-90

 

0.0%

 

0

 

-95

 

0.0%

 

0

 

-100

 

0.0%

 

0

 

 

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

 

ILLUSTRATIONS OF CALCULATION OF EARNED UNITS

PER 1,000 TARGET UNITS

 

Company Total Stockholder Return Exceeds Benchmark Index Total Return

 

Assumptions:

 

 

 

 

 

 

 

 

 

 

 

SLAB:

 

 

 

 

 

Average Per Share Closing Price (beginning)

 

 

 

$

36.87

 

Average Per Share Closing Price (ending)

 

 

 

$

46.02

 

 

 

 

 

 

 

XSOX:

 

 

 

 

 

Average Closing Index Value (beginning)

 

 

 

384.06

 

Average Closing Index Value (ending)

 

 

 

417.13

 

 

 

 

 

 

 

Computations:

 

 

 

 

 

 

 

 

 

 

 

Company Total Stockholder Return

 

((46.02 / 36.87) – 1) x 100

 

24.82

%

 

 

 

 

 

 

Benchmark Index Total Return

 

((417.13 / 384.06) – 1) x 100

 

8.61

%

 

 

 

 

 

 

Relative Return Factor

 

100 + (2.5 x (24.82 – 8.61))

 

140.5

%

 

 

 

 

 

 

Earned Units

 

1,000 x 140.5%

 

1,405

 

 

Company Total Stockholder Return Is Less Than Benchmark Index Total Return

 

Assumptions:

 

 

 

 

 

 

 

 

 

 

 

SLAB:

 

 

 

 

 

Average Per Share Closing Price (beginning)

 

 

 

$

44.30

 

Average Per Share Closing Price (ending)

 

 

 

$

34.65

 

 

 

 

 

 

 

XSOX:

 

 

 

 

 

Average Closing Index Value (beginning)

 

 

 

476.68

 

Average Closing Index Value (ending)

 

 

 

448.80

 

 

 

 

 

 

 

Computations:

 

 

 

 

 

 

 

 

 

 

 

Company Total Stockholder Return

 

((34.65 / 44.30) – 1) x 100

 

-21.78

%

 

 

 

 

 

 

Benchmark Index Total Return

 

((448.8 / 476.68) – 1) x 100

 

-5.85

%

 

 

 

 

 

 

Relative Return Factor

 

100 + (2.5 x (–21.78 – (–5.85))

 

60.2

%

 

 

 

 

 

 

Earned Units

 

1,000 x 60.2%

 

602

 

 

2

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

 

APPENDIX B

 

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

 

1.                                       Assumptions:

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

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

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

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

 

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

 

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

 

Trading Day

 

Closing Price

 

Dividend Paid

 

Shares
Purchased

 

Accumulated
Shares

 

Total
Accumulated
Value

 

12/24/2XX0

 

$

37.26

 

 

 

 

 

1.000

 

$

37.26

 

12/26/2XX0

 

$

37.32

 

 

 

 

 

1.000

 

$

37.32

 

12/27/2XX0

 

$

37.44

 

 

 

 

 

1.000

 

$

37.44

 

12/28/2XX0

 

$

37.67

 

$

0.20

 

.0053

 

1.0053

 

$

37.87

 

12/31/2XX0

 

$

37.43

 

 

 

 

 

1.0053

 

$

37.63

 

Average Per Share Closing Price with Dividends Reinvested

 

$

37.50

 

 

3.             Calculate Accumulated Shares During the Performance Period.

 

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

 

Ex-Dividend Date

 

Closing Price

 

Dividend Paid

 

Shares Purchased

 

Accumulated Shares

 

03/28/2XX1

 

$

31.13

 

$

0.20

 

.0064

 

1.0117

 

06/28/2XX1

 

$

36.46

 

$

0.20

 

.0055

 

1.0172

 

09/28/2XX1

 

$

31.08

 

$

0.20

 

.0064

 

1.0236

 

12/28/2XX1

 

$

23.67

 

$

0.20

 

.0084

 

1.0320

 

03/28/2XX2

 

$

26.96

 

$

0.20

 

.0074

 

1.0394

 

06/28/2XX2

 

$

38.75

 

$

0.20

 

.0052

 

1.0446

 

09/28/2XX2

 

$

46.49

 

$

0.20

 

.0043

 

1.0489

 

12/28/2XX2

 

$

47.97

 

$

0.20

 

.0042

 

1.0531

 

03/28/2XX3

 

$

47.72

 

$

0.20

 

.0042

 

1.0573

 

06/28/2XX3

 

$

43.50

 

$

0.20

 

.0046

 

1.0619

 

09/28/2XX3

 

$

37.55

 

$

0.20

 

.0053

 

1.0672

 

12/28/2XX3

 

$

46.13

 

$

0.20

 

.0043

 

1.0715

 

 

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

 

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

 

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

 

Trading Day

 

Closing Price

 

Dividend Paid

 

Shares
Purchased

 

Accumulated
Shares

 

Total
Accumulated
Value

 

12/22/2XX3

 

$

46.93

 

 

 

 

 

1.0672

 

$

50.08

 

12/23/2XX3

 

$

46.45

 

 

 

 

 

1.0672

 

$

49.57

 

12/27/2XX3

 

$

46.55

 

 

 

 

 

1.0672

 

$

49.68

 

12/28/2XX3

 

$

46.13

 

$

0.20

 

.0043

 

1.0715

 

$

49.43

 

12/29/2XX3

 

$

46.11

 

 

 

 

 

1.0715

 

$

49.41

 

12/30/2XX3

 

$

46.28

 

 

 

 

 

1.0715

 

$

49.59

 

12/31/2XX3

 

$

46.02

 

 

 

 

 

1.0715

 

$

49.31

 

Average Per Share Closing Price with Dividends Reinvested

 

$

49.58

 

 

2

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

 

SILICON LABORATORIES INC.

2009 STOCK INCENTIVE PLAN

 

MARKET STOCK UNITS AWARD AGREEMENT

U.S. PARTICIPANTS

 

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

 

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

 

1.             THE AWARD.

 

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

 

2.             MEASUREMENT OF PERFORMANCE CRITERIA.

 

The components of Performance Criteria shall be determined for the Performance
Period in accordance with the following:

 

2.1          “Company Total Stockholder Return” means the percentage point
increase or decrease in (a) the Average Per Share Closing Price for the 180-day
period ending on the last day of the Performance Period over (b) the Average Per
Share Closing Price for the 180-day period ending on the first day of the
Performance Period.

 

2.2          “Average Per Share Closing Price” means the average of the daily
closing prices per Share as reported on the NASDAQ Stock Market for all trading
days falling within an applicable 180-day period described in Section 2.1.  The
Average Per Share Closing Price shall be adjusted in each case to reflect an
assumed reinvestment, as of the of applicable ex-dividend date, of all cash
dividends and other cash distributions (excluding cash distributions resulting
from share repurchases or redemptions by the Company) paid to stockholders, as
applicable, during the 180-day period ending on the first day of the Performance
Period and during the Performance Period.  The method of adjustment of the
Average Per Share Closing Price to reflect the assumed reinvestment of cash
dividends and other cash distributions to stockholders is illustrated in
Appendix B to the Grant Notice.

 

2.3          “Benchmark Index Total Return” means the percentage point increase
or decrease in (a) the Average Closing Index Value for the 180-day period ending
on the last day of the

 

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

 

Performance Period over (b) the Average Closing Index Value for the 180-day
period ending on the first day of the Performance Period.

 

2.4          “Average Closing Index Value” means the average of the daily
closing index values of the Benchmark Index as reported by the NASDAQ OMX
Group, Inc. for all trading days falling within an applicable 180-day period
described in Section 2.3.

 

3.             COMMITTEE CERTIFICATION OF EARNED UNITS.

 

3.1          Level of Performance Criteria Attained.  On or before the Vesting
Date following completion of the Performance Period, the Committee shall certify
in writing the level of attainment of the Performance Criteria during the
Performance Period, the resulting Relative Return Factor and the number of Units
which have become Earned Units.

 

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

 

4.             VESTING OF EARNED UNITS.

 

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

 

4.2          Vesting Upon a Change in Control.  In the event of a Change in
Control, the vesting of Earned Units shall be determined in accordance with
Section 9.1.

 

4.3          Vesting Upon Involuntary Termination Following a Change in
Control.  In the event that upon or within eighteen (18) months following the
effective date of a Change in Control, the Participant’s Service terminates due
to Involuntary Termination, the vesting of Earned Units shall be determined in
accordance with Section 9.2.

 

5.             TERMINATION OF SERVICE.

 

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

 

5.2          Death of the Participant.  Should the Participant cease Service by
reason of his or her death during the Performance Period, the Participant shall
not forfeit the Award.  In such case, the number of Earned Units shall be
determined as of the end of the Performance Period in accordance with Section 3,
and all such Earned Units shall be deemed Vested Units upon the Committee’s
certification in accordance with Section 3.1 and settled in accordance with
Section 6 as if the Participant’s Service had continued through the Vesting
Date.  The Shares due in settlement of such Vested Units shall be issued to

 

2

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

 

the personal representative of the Participant’s estate, the person or persons
to whom the Award is transferred pursuant to the Participant’s will or in
accordance with the laws of descent and distribution (collectively referred to
herein as the “Participant’s Heirs”).

 

6.             SETTLEMENT OF THE AWARD.

 

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

 

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

 

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

 

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

 

7.             TAX WITHHOLDING AND ADVICE.

 

7.1          In General.  Subject to Section 7.2, at the time the Grant Notice
is executed, or at any time thereafter as requested by the Company, the
Participant hereby authorizes withholding from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for,
any sums required to satisfy the U.S. federal, state, and local taxes and (if
applicable) taxes imposed by jurisdictions outside of the United States
(including income tax, social insurance

 

3

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

 

contributions, payment on account and any other taxes) and required by law to be
withheld with respect to any taxable event arising as a result of the
Participant’s participation in the Plan (referred to herein as “Tax-Related
Items”).

 

7.2          Withholding of Taxes.  The Company or any Subsidiary or Affiliate,
as appropriate, shall have the authority and the right to deduct or withhold, or
require the Participant to remit to the Company (or to the applicable Subsidiary
or Affiliate), an amount sufficient to satisfy applicable Tax-Related Items or
to take such other action as may be necessary in the opinion of the Company or a
Subsidiary or Affiliate, as appropriate, to satisfy such Tax-Related Items
(including hypothetical withholding tax amounts if the Participant is covered
under a Company tax equalization policy).  In this regard, the Participant
authorizes the Company and/or the applicable Subsidiary or Affiliate, or their
respective agents, at their discretion, to satisfy the obligations with regard
to all Tax-Related Items by one or a combination of the following:

 

(a)           withholding from the Participant’s wages or other cash
compensation paid to the Participant by the Company or the applicable Subsidiary
or Affiliate; or

 

(b)           withholding from proceeds of the sale of Shares acquired upon
vesting and settlement of the Units, either through a voluntary sale or through
a mandatory sale arranged by the Company (on the Participant’s behalf pursuant
to this authorization); or

 

(c)           withholding in Shares to be issued upon vesting and settlement of
the Units; or

 

(d)           direct payment from the Participant.

 

To avoid negative accounting treatment, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding
amounts or other applicable withholding rates.  If the Participant is covered by
a Company tax equalization policy, the Participant agrees to pay to the Company
any additional hypothetical tax obligation calculated and paid under the terms
and conditions of such tax equalization policy.  Finally, the Participant shall
pay to the Company or the Subsidiary or Affiliate, as appropriate, any amount of
Tax-Related Items that the Company or the applicable Subsidiary or Affiliate may
be required to withhold as a result of his or her participation in the Plan that
cannot be satisfied by the means previously described.  The Company may refuse
to issue or deliver the Shares that may be issued in connection with the
settlement of the Units if the Participant fails to comply with his or her
Tax-Related Items obligations.

 

7.3          Tax Advice.  The Participant represents, warrants and acknowledges
that the Company has made no warranties or representations to the Participant
with respect to the income tax consequences of the transactions contemplated by
this Award Agreement, and the Participant is in no manner relying on the Company
or the Company’s representatives for an assessment of such tax consequences. 
THE PARTICIPANT UNDERSTANDS THAT THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  THE PARTICIPANT SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE
UNITS.  NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE
USED, FOR THE PURPOSE OF AVOIDING TAXPAYER PENALTIES.

 

8.             AUTHORIZATION TO RELEASE NECESSARY PERSONAL INFORMATION.

 

The Participant hereby authorizes and directs the Participant’s employer to
collect, use and transfer in electronic or other form, any personal information
(the “Data”) regarding the Participant’s

 

4

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

 

Service, the nature and amount of the Participant’s compensation and the fact
and conditions of the Participant’s participation in the Plan (including, but
not limited to, the Participant’s name, home address, telephone number, date of
birth, social security number (or any other social or national identification
number), salary, nationality, job title, number of Shares held and the details
of all Units or any other entitlement to Shares awarded, cancelled, exercised,
vested, unvested or outstanding) for the purpose of implementing, administering
and managing the Participant’s participation in the Plan.  The Participant
understands that the Data may be transferred to the Company or any of its
Subsidiaries or Affiliates, or to any third parties assisting in the
implementation, administration and management of the Plan, including any
requisite transfer to a brokerage firm or other third party assisting with
administration of the Award or with whom Shares acquired upon settlement of this
Award or cash from the sale of such Shares may be deposited.  The Participant
acknowledges that recipients of the Data may be located in different countries,
and those countries may have data privacy laws and protections different from
those in the country of the Participant’s residence. Furthermore, the
Participant acknowledges and understands that the transfer of the Data to the
Company or any of its Subsidiaries or Affiliates, or to any third parties is
necessary for Participant’s participation in the Plan.  The Participant may at
any time withdraw the consents herein, by contacting the Company’s stock
administration department in writing. The Participant further acknowledges that
withdrawal of consent may affect the Participant’s ability to realize benefits
from the Award, and the Participant’s ability to participate in the Plan.

 

9.             CHANGE IN CONTROL.

 

9.1          Effect of Change in Control on Award.  In the event of a Change in
Control, the Performance Period shall end on the day immediately preceding the
Change in Control (the “Adjusted Performance Period”).  The number of Earned
Units and the vesting of those Units shall be determined for the Adjusted
Performance Period in accordance with the following:

 

(a)           Earned Units.  In the Committee’s determination of the number of
Earned Units for the Adjusted Performance Period, the following modifications
shall be made to the components of the Relative Return Factor:

 

(i)            The Company Total Stockholder Return shall be determined as
provided by Section 2.1, except that the Average Per Share Closing Price for the
180-day period ending on the last day of the Adjusted Performance Period shall
be replaced with the price per Share to be paid to the holder thereof in
accordance with the definitive agreement governing the transaction constituting
the Change in Control (or, in the absence of such agreement, the closing price
per Share as reported on the NASDAQ Stock Market for the last trading day of the
Adjusted Performance Period), adjusted to reflect an assumed reinvestment, as of
the applicable ex-dividend date, of all cash dividends and other cash
distributions (excluding cash distributions resulting from share repurchases or
redemptions by the Company) paid to stockholders during the Adjusted Performance
Period, as illustrated in Section 2.2.

 

(ii)           The Benchmark Index Total Return shall be determined as provided
by Section 2.3, except that for the purposes of clause (a) thereof, the Average
Closing Index Value shall be determined for the 180-day period ending on the
last day of the Adjusted Performance Period.

 

(b)           Vested Units.  As of the last day of the Adjusted Performance
Period and provided that the Participant’s Service has not terminated prior to
such date, a portion of the Earned Units determined in accordance with
Section 9.1(a) shall become Vested Units (the “Accelerated Units”), with such
portion determined by multiplying the total number of Earned Units by a
fraction, the numerator of which equals the number of days contained in the
Adjusted Performance Period and the

 

5

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

 

denominator of which equals the number of days contained in the original
Performance Period determined without regard to this Section.  The Accelerated
Units shall be settled in accordance Section 6 immediately prior to the
consummation of the Change in Control.  Except as otherwise provided by
Section 9.2, that portion of the Earned Units determined in accordance with
Section 9.1(a) in excess of the number of Accelerated Units shall become Vested
Units on the Vesting Date of the original Performance Period determined without
regard to this Section, provided that the Participant’s Service has not
terminated prior to such Vesting Date.  Such Vested Units shall be settled on
the Settlement Date in accordance with Section 6, provided that payment for each
Vested Unit shall be made in the amount and in the form of the consideration
(whether stock, cash, other securities or property or a combination thereof) to
which a holder of a Share on the effective date of the Change in Control was
entitled (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares).

 

9.2          Involuntary Termination Following Change in Control.  In the event
that upon or within eighteen (18) months following the effective date of the
Change in Control, the Participant’s Service terminates due to Involuntary
Termination, the vesting of the Earned Units determined in accordance with
Section 9.1(a) in excess of the number of Accelerated Units shall be deemed
Vested Units effective as of the date of the Participant’s Involuntary
Termination and shall be settled in accordance with Section 6, treating the date
of the Participant’s termination of Service as the Vesting Date, and provided
that payment for each Vested Unit shall be made in the amount and in the form of
the consideration (whether stock, cash, other securities or property or a
combination thereof) to which a holder of a Share on the effective date of the
Change in Control was entitled (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares).

 

10.          ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

 

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

 

11.          NO ENTITLEMENT OR CLAIMS FOR COMPENSATION.

 

11.1        The Participant’s rights, if any, in respect of or in connection
with the Units are derived solely from the discretionary decision of the Company
to permit the Participant to participate in the Plan and to benefit from a
discretionary Award.  By accepting the Units, the Participant expressly
acknowledges that there is no obligation on the part of the Company to continue
the Plan and/or grant any additional Units or other Awards to the Participant. 
The Units are not intended to be compensation of a continuing or recurring
nature, or part of the Participant’s normal or expected compensation, and in no
way represents any portion of the Participant’s salary, compensation, or other
remuneration for purposes of pension benefits, severance, redundancy,
resignation or any other purpose.

 

11.2        Neither the Plan nor the Units shall be deemed to give the
Participant a right to remain an Employee, Director or Consultant of the
Company, a Subsidiary or an Affiliate.  The Company and its Subsidiaries and
Affiliates reserve the right to terminate the Service of the Participant at any
time, with or without cause, and for any reason, subject to applicable laws, the
Company’s Certificate of Incorporation and Bylaws and a written employment
agreement (if any), and the Participant shall be

 

6

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

 

deemed irrevocably to have waived any claim to damages or specific performance
for breach of contract or dismissal, compensation for loss of office, tort or
otherwise with respect to the Plan, the Units or any other outstanding Award
that is forfeited and/or is terminated by its terms or to any future Award.

 

12.          RIGHTS AS A STOCKHOLDER.

 

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

 

13.          MISCELLANEOUS PROVISIONS.

 

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

 

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

 

13.3        Further Instruments.  The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Award Agreement.

 

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

 

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

 

13.6        Construction of Award Agreement.  The Grant Notice, this Award
Agreement, and the Units evidenced hereby (i) are made and granted pursuant to
the Plan and are in all respects limited by and subject to the terms of the
Plan, and (ii) constitute the entire agreement between the Participant and the
Company on the subject matter hereof and supersede all proposals, written or
oral, and all other communications between the parties related to the subject
matter.  All decisions of the

 

7

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

 

Committee with respect to any question or issue arising under the Grant Notice,
this Award Agreement or the Plan shall be conclusive and binding on all persons
having an interest in the Units.

 

13.7        Governing Law.  The interpretation, performance and enforcement of
this Award Agreement shall be governed by the laws of the State of Texas, U.S.A.
without regard to the conflict-of-laws rules thereof or of any other
jurisdiction.

 

13.8        Section 409A.

 

(a)           Compliance with Code Section 409A.  Notwithstanding any other
provision of the Plan, this Award Agreement or the Grant Notice, the Plan, this
Agreement and the Grant Notice shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Code Section 409A (together
with any Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the date hereof).  The vesting and settlement
of Units awarded pursuant to this Award Agreement are intended to qualify for
the “short-term deferral” exemption from Code Section 409A.  The Company
reserves the right, to the extent the Company deems necessary or advisable in
its sole discretion, to unilaterally amend or modify the Plan and/or this Award
Agreement to ensure that the Units qualify for exemption from or comply with
Code Section 409A; provided, however, that the Company makes no representations
that the Units will be exempt from Code Section 409A and makes no undertaking to
preclude Code Section 409A from applying to the Units.

 

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

 

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

 

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

 

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

 

8

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

 

13.12      Relocation Outside the United States.  If the Participant relocates
to a country outside the United States, the Company reserves the right to impose
other requirements on the Participant’s participation in the Plan, on the Units
and on any Shares acquired under the Plan, to the extent the Company determines
necessary or advisable in order to comply with local law or facilitate the
administration of the Plan, and to require the Participant to sign any
additional agreements or undertakings that may be necessary to accomplish the
foregoing.

 

9

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