Exhibit 10.01**PDF SOLUTIONS, INC.****2001 STOCK PLAN****AS AMENDED OCTOBER 23, 2006**

 
**TABLE OF CONTENTS**       **Page** SECTION 1. INTRODUCTION  1 SECTION 2. DEFINITIONS  1 (a) “Affiliate”  1 (b) “Award”  1 (c) “Board”  1 (d) “Change In Control”  1 (e) “Code”  2 (f) “Committee”  2 (g) “Common Stock”  2 (h) “Company”  2 (i) “Consultant”  2 (j) “Director”  2 (k) “Disability”  3 (l) “Employee”  3 (m) “Exchange Act”  3 (n) “Exercise Price”  3 (o) “Fair Market Value”  3 (p) “Grant”  3 (q) “Incentive Stock Option” or “ISO”  3 (r) “Key Employee”  3 (s) “Non-Employee Director”  4 (t) “Nonstatutory Stock Option” or “NSO”  4 (u) “Option”  4 (v) “Optionee”  4 (w) “Parent”  4 (x) “Participant”  4 (y) “Plan”  4 (z) “Restricted Stock”  4 (aa) “Restricted Stock Agreement”  4 (bb) “Securities Act”  4 (cc) “Service”  4 
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**TABLE OF CONTENTS**(continued)       **Page** (dd) “Share”  4 (ee) “Stock Option Agreement”  4 (ff) “Stock Purchase Right”  4 (gg) “Subsidiary”  4 (hh) “10-Percent Shareholder”  5 SECTION 3. ADMINISTRATION  5 (a) Committee Composition  5 (b) Authority of the Committee  5 (c) Indemnification  6 SECTION 4. ELIGIBILITY  6 (a) General Rules  6 (b) Incentive Stock Options  6 (c) Non-Employee Director Options  6 SECTION 5. SHARES SUBJECT TO PLAN  7 (a) Basic Limitation  7 (b) Annual Addition  7 (c) Additional Shares  7 (d) Limits on Options  7 (e) Limits on Stock Purchase Rights  7 SECTION 6. TERMS AND CONDITIONS OF OPTIONS  8 (a) Stock Option Agreement  8 (b) Number of Shares  8 (c) Exercise Price  8 (d) Exercisability and Term  8 (e) Modifications or Assumption of Options  8 (f) Transferability of Options  8 (g) No Rights as Stockholder  9 (h) Restrictions on Transfer  9 SECTION 7. PAYMENT FOR OPTION SHARES  9 (a) General Rule  9 (b) Surrender of Stock  9 
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**TABLE OF CONTENTS**(continued)       **Page** (c) Promissory Note  9 (d) Other Forms of Payment  9 SECTION 8. TERMS AND CONDITIONS FOR AWARDS OF STOCK PURCHASE RIGHTS  10 (a) Time, Amount and Form of Awards  10 (b) Agreements  10 (c) Payment for Restricted Stock  10 (d) Vesting Conditions  10 (e) Assignment or Transfer of Restricted Stock  10 (f) Trusts  10 (g) Voting and Dividend Rights  10 SECTION 9. PROTECTION AGAINST DILUTION  11 (a) Adjustments  11 (b) Participant Rights  11 SECTION 10. EFFECT OF A CHANGE IN CONTROL  11 (a) Merger or Reorganization  11 (b) Acceleration  11 SECTION 11. LIMITATIONS ON RIGHTS  11 (a) Retention Rights  11 (b) Stockholders’ Rights  12 (c) Regulatory Requirements  12 SECTION 12. WITHHOLDING TAXES  12 (a) General  12 (b) Share Withholding  12 SECTION 13. DURATION AND AMENDMENTS  12 (a) Term of the Plan  12 (b) Right to Amend or Terminate the Plan  13 SECTION 14. EXECUTION  13 
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**PDF SOLUTIONS, INC.****2001 STOCK PLAN****AS AMENDED OCTOBER 23, 2006****SECTION 1. INTRODUCTION.**     The Company’s Board of Directors adopted the PDF Solutions, Inc. 2001 Stock Plan on June 12,2001 (the “Adoption Date”), and the Company’s stockholders approved the Plan on July 6, 2001. ThePlan is effective on the date of our initial public offering.     The purpose of the Plan is to promote the long-term success of the Company and the creation ofshareholder value by offering Key Employees an opportunity to acquire a proprietary interest in thesuccess of the Company, or to increase such interest, and to encourage such selected persons tocontinue to provide services to the Company and to attract new individuals with outstandingqualifications. The Plan seeks to achieve this purpose by providing for Awards in the form ofStock Purchase Rights granting Restricted Stock and Options which may be Incentive Stock Options orNonstatutory Stock Options.     The Plan shall be governed by, and construed in accordance with, the laws of the State ofDelaware (except its choice-of-law provisions). Capitalized terms shall have the meaning providedin Section 2 unless otherwise provided in this Plan or the applicable Stock Option Agreement orRestricted Stock Agreement.**SECTION 2. DEFINITIONS.**     (a) **“Affiliate”**means any entity other than a Subsidiary, if the Company and/or one or moreSubsidiaries own not less than 50% of such entity. For purposes of determining an individual’s“Service,” this definition shall include any entity other than a Subsidiary, if the Company, aParent and/or one or more Subsidiaries own not less than 50% of such entity.     (b) **“Award”**means any award of an Option or Stock Purchase Right under the Plan.     (c) **“Board”**means the Board of Directors of the Company, as constituted from time to time.     (d) **“Change In Control”**except as may otherwise be provided in a Stock Option Agreement orRestricted Stock Agreement, means the occurrence of any of the following: (i) The consummation of a merger or consolidation of the Companywith or into another entity or any other corporate reorganization, if more than50% of the combined voting power of the continuing or surviving entity’ssecurities outstanding immediately after such merger, consolidation or otherreorganization is owned by persons who were not stockholders ofthe Company immediately prior to such merger, consolidation or otherreorganization;

 
 (ii) The sale, transfer or other disposition of all or substantiallyall of the Company’s assets;  (iii) A change in the composition of the Board, as a result of whichfewer that one-half of the incumbent directors are directors who either (i) hadbeen directors of the Company on the date 24 months prior to the date of theevent that may constitute a Change in Control (the “original directors”) or(ii) were elected, or nominated for election, to the Board with the affirmativevotes of at least a majority of the aggregate of the original directors whowere still in office at the time of the election or nomination and thedirectors whose election or nomination was previously so approved;  (iv) Any transaction as a result of which any person becomes the“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directlyor indirectly, of securities of the Company representing at least 20% of thetotal voting power represented by the Company’s then outstanding votingsecurities. For purposes of this Paragraph (iii), the term “person” shall havethe same meaning as when used in sections 13(d) and 14(d) of the Exchange Actbut shall exclude: (A) A trustee or other fiduciary holding securitiesunder an employee benefit plan of the Company or a subsidiary of theCompany;  (B) A corporation owned directly or indirectly bythe stockholders of the Company in substantially the same proportionsas their ownership of the common stock of the Company; and  (C) The Company; or (v) A complete liquidation or dissolution of the Company.     (e) **“Code”**means the Internal Revenue Code of 1986, as amended.     (f) **“Committee”**means a committee consisting of one or more members of the Board that isappointed by the Board (as described in Section 3) to administer the Plan.     (g) **“Common Stock”**means the Company’s common stock.     (h) **“Company”**means PDF Solutions, Inc.     (i) **“Consultant”**means an individual who performs bona fide services to the Company, a Parent,a Subsidiary or an Affiliate other than as an Employee or Director or Non-Employee Director.     (j) **“Director”**means a member of the Board who is also an Employee.
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     (k) **“Disability”**means that the Key Employee is unable to engage in any substantial gainfulactivity by reason of any medically determinable physical or mental impairment which can beexpected to result in death or which has lasted or can be expected to last for a continuous periodof not less than 12 months.     (l) **“Employee”**means any individual who is a common-law employee of the Company, a Parent, aSubsidiary or an Affiliate.     (m) **“Exchange Act”**means the Securities Exchange Act of 1934, as amended.     (n) **“Exercise Price”**means, in the case of an Option, the amount for which a Share may bepurchased upon exercise of such Option, as specified in the applicable Stock Option Agreement.     (o) **“Fair Market Value”**means the market price of Shares, determined by the Committee asfollows: (i) If the Shares were traded on a stock exchange on the date inquestion, then the Fair Market Value shall be equal to the last trading pricereported by the applicable composite transactions report for such date;  (ii) If the Shares were traded over-the-counter on the date inquestion and were classified as a national market issue, then the Fair MarketValue shall be equal to the last trading price quoted by the NASDAQ GlobalMarket system for such date;  (iii) If the Shares were traded over-the-counter on the date inquestion but were not classified as a national market issue, then the FairMarket Value shall be equal to the mean between the last reportedrepresentative bid and asked prices quoted by the NASDAQ Global Market systemfor such date; and  (iv) If none of the foregoing provisions is applicable, then theFair Market Value shall be determined by the Committee in good faith on suchbasis as it deems appropriate.     Whenever possible, the determination of Fair Market Value by the Committee shall be based onthe prices reported in the Wall Street Journal. Such determination shall be conclusive and bindingon all persons.     (p) **“Grant”**means any grant of an Award under the Plan.     (q) **“Incentive Stock Option”**or **“ISO”**means an incentive stock option described in Codesection 422(b).     (r) **“Key Employee”**means an Employee, Director, Non-Employee Director or Consultant who hasbeen selected by the Committee to receive an Award under the Plan.
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     (s) **“Non-Employee Director”**means a member of the Board who is not an Employee.     (t) **“Nonstatutory Stock Option”**or **“NSO”**means a stock option that is not an ISO.     (u) **“Option”**means an ISO or NSO granted under the Plan entitling the Optionee to purchaseShares.     (v) **“Optionee”**means an individual, estate or other entity that holds an Option.     (w) **“Parent”**means any corporation (other than the Company) in an unbroken chain ofcorporations ending with the Company, if each of the corporations other than the Company owns stockpossessing fifty percent (50%) or more of the total combined voting power of all classes of stockin one of the other corporations in such chain. A corporation that attains the status of a Parenton a date after the adoption of the Plan shall be considered a Parent commencing as of such date.     (x) **“Participant”**means an individual or estate or other entity that holds an Award.     (y) **“Plan”**means this PDF Solutions, Inc. 2001 Stock Plan as it may be amended from time totime.     (z) **“Restricted Stock”**means a Share awarded under the Plan pursuant to a Stock PurchaseRight.     (aa) **“Restricted Stock Agreement”**means the agreement described in Section 8 evidencingRestricted Stock that may be purchased following the Award of a Stock Purchase Right.     (bb) **“Securities Act”**means the Securities Act of 1933, as amended.     (cc) **“Service”**means service as an Employee, Director, Non-Employee Director or Consultant.     (dd) **“Share”**means one share of Common Stock.     (ee) **“Stock Option Agreement”**means the agreement described in Section 6 evidencing each Grantof an Option.     (ff) **“Stock Purchase Right”**means the right to acquire Restricted Stock pursuant to Section 8.     (gg) **“Subsidiary”**means any corporation (other than the Company) in an unbroken chain ofcorporations beginning with the Company, if each of the corporations other than the lastcorporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the totalcombined voting power of all classes of stock in one of the other corporations in such chain. A
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corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shallbe considered a Subsidiary commencing as of such date.     (hh) **“10-Percent Shareholder”**means an individual who owns more than ten percent (10%) of thetotal combined voting power of all classes of outstanding stock of the Company, its Parent or anyof its subsidiaries. In determining stock ownership, the attribution rules of section 424(d) ofthe Code shall be applied.**SECTION 3. ADMINISTRATION.**     (a) **Committee Composition.**A Committee appointed by the Board shall administer the Plan. TheBoard shall designate one of the members of the Committee as chairperson. If no Committee has beenapproved, the entire Board shall constitute the Committee. Members of the Committee shall servefor such period of time as the Board may determine and shall be subject to removal by the Board atany time. The Board may also at any time terminate the functions of the Committee and reassume allpowers and authority previously delegated to the Committee.     With respect to officers or directors subject to Section 16 of the Exchange Act, the Committeeshall consist of those individuals who shall satisfy the requirements of Rule 16b-3 (or itssuccessor) under the Exchange Act with respect to Awards granted to persons who are officers ordirectors of the Company under Section 16 of the Exchange Act. Notwithstanding the previoussentence, failure of the Committee to satisfy the requirements of Rule 16b-3 shall not invalidateany Awards granted by such Committee.     The Board may also appoint one or more separate committees of the Board, each composed of oneor more directors of the Company who need not qualify under Rule 16b-3, who may administer the Planwith respect to Key Employees who are not considered officers or directors of the Company underSection 16 of the Exchange Act, may grant Awards under the Plan to such Key Employees and maydetermine all terms of such Awards.     Notwithstanding the foregoing, the Board shall constitute the Committee and shall administerthe Plan with respect to all Awards granted to Non-Employee Directors.     (b) **Authority of the Committee.**Subject to the provisions of the Plan, the Committee shallhave full authority and discretion to take any actions it deems necessary or advisable for theadministration of the Plan. Such actions shall include: (i) selecting Key Employees who are to receive Awards under thePlan;  (ii) determining the type, number, vesting requirements and otherfeatures and conditions of such Awards;  (iii) interpreting the Plan;  (iv) adopting such plans or subplans as may be deemed necessary orappropriate to provide for the participation by Key Employees of the Companyand its Subsidiaries and Affiliates who reside outside the U.S., which plansand/or subplans shall be attached hereto as Appendices; and
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 (v) making all other decisions relating to the operation of thePlan.     The Committee may adopt such rules or guidelines, as it deems appropriate to implement thePlan. The Committee’s determinations under the Plan shall be final and binding on all persons.     (c) **Indemnification.**Each member of the Committee, or of the Board, shall be indemnified andheld harmless by the Company against and from (i) any loss, cost, liability, or expense that may beimposed upon or reasonably incurred by him or her 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 involvedby reason of any action taken or failure to act under the Plan or any Stock Option Agreement orRestricted Stock Agreement, and (ii) from any and all amounts paid by him or her in settlementthereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in anysuch claim, action, suit, or proceeding against him or her, provided he or she shall give theCompany an opportunity, at its own expense, to handle and defend the same before he or sheundertakes to handle and defend it on his or her own behalf. The foregoing right ofindemnification shall not be exclusive of any other rights of indemnification to which such personsmay be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as amatter of law, or otherwise, or under any power that the Company may have to indemnify them or holdthem harmless.**SECTION 4. ELIGIBILITY.**     (a) **General Rules.**Only Employees, Directors, Non-Employee Directors and Consultants shall beeligible for designation as Key Employees by the Committee.     (b) **Incentive Stock Options.**Only Key Employees who are common-law employees of the Company,a Parent or a Subsidiary shall be eligible for the grant of ISOs. In addition, a Key Employee whois a 10-Percent Shareholder shall not be eligible for the grant of an ISO unless the requirementsset forth in section 422(c)(5) of the Code are satisfied.     (c) **Non-Employee Director Options.**Non-Employee Directors shall also be eligible to receiveOptions as described in this Section 4(c) from and after the date the Board has determined toimplement this provision. (i) Each eligible Non-Employee Director elected or appointed afterthe effective date of the Company’s initial public offering shall automaticallybe granted an NSO to purchase 30,000 Shares (after giving effect to the June2001 stock split) (subject to adjustment under Section 9) as a result of his orher initial election or appointment as a Non-Employee Director. Upon theconclusion of each regular annual meeting of the Company’s stockholdersfollowing his or her initial appointment, each eligible Non-Employee Directorwho will continue serving as a member of the Boardand who received an initial grant thereafter shall receive an NSO topurchase 15,000 Shares (after giving effect to the June 2001 stock split)(subject to adjustment under Section 9). All NSOs granted pursuant to thisSection 4 shall vest and become exercisable provided the individual is
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   serving as a director of the Company as of the vesting date as follows: 25%one year from the date of grant, then in 36 equal monthly installmentscommencing on the date one month and one year after the date of grant.  (ii) All NSOs granted to Non-Employee Directors under this Section4(c) shall become exercisable in full in the event of Change in Control withrespect to the Company.  (iii) The Exercise Price under all NSOs granted to a Non-EmployeeDirector under this Section 4(c) shall be equal to one hundred percent (100%)of the Fair Market Value of a Share of Common Stock on the date of grant,payable in one of the forms described in Section 7.  (iv) All NSOs granted to a Non-Employee Director under this Section4(c) shall terminate on the earlier of: (1) The 10th anniversary of the date of grant; or  (2) The date ninety (90) days after the terminationof such Non-Employee Director’s Service for any reason.**SECTION 5. SHARES SUBJECT TO PLAN.**     (a) **Basic Limitation.**The stock issuable under the Plan shall be authorized but unissuedShares or treasury Shares. The aggregate number of Shares reserved for Awards under the Plan shallnot exceed 3,000,000 Shares (after giving effect to the June 2001 stock split).     (b) **Annual Addition.**Beginning with the first fiscal year of the Company beginning after theEffective Date, on the first day of each fiscal year, Shares will be added to the Plan equal to thelesser of (i) 3,000,000 Shares (after giving effect to the June 2001 stock split), (ii) fivepercent (5%) of the outstanding shares on the last day of the prior fiscal year, or (iii) suchlesser number of Shares as may be determined by the Board in its sole discretion.     (c) **Additional Shares.**If Awards are forfeited or terminate for any other reason before beingexercised, then the Shares underlying such Awards shall again become available for Awards under thePlan.     (d) **Limits on Options.**No Key Employee shall receive Options to purchase Shares during anyfiscal year covering in excess of 1,000,000 Shares (after giving effect to the June 2001 stocksplit), or 2,000,000 Shares (after giving effect to the June 2001 stock split) in the first fiscalyear of a Key Employee’s employment with Company.     (e) **Limits on Stock Purchase Rights.**No Key Employee shall receive an Award of Stock PurchaseRights during any fiscal year covering in excess of 500,000 Shares (after giving effect to the June2001 stock split), or 1,000,000 Shares (after giving effect to the June 2001 stock split) in thefirst fiscal year of a Key Employee’s employment with Company.
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**SECTION 6. TERMS AND CONDITIONS OF OPTIONS.**     (a) **Stock Option Agreement.**Each Grant under the Plan shall be evidenced by a Stock OptionAgreement between the Optionee and the Company. Such Option shall be subject to all applicableterms and conditions of the Plan and may be subject to any other terms and conditions that are notinconsistent with the Plan and that the Committee deems appropriate for inclusion in a Stock OptionAgreement. The provisions of the various Stock Option Agreements entered into under the Plan neednot be identical. A Stock Option Agreement may provide that new Options will be grantedautomatically to the Optionee when he or she exercises the prior Options. The Stock OptionAgreement shall also specify whether the Option is an ISO or an NSO.     (b) **Number of Shares.**Each Stock Option Agreement shall specify the number of Shares that aresubject to the Option and shall provide for the adjustment of such number in accordance withSection 9.     (c) **Exercise Price.**An Option’s Exercise Price shall be established by the Committee and setforth in a Stock Option Agreement. The Exercise Price of an ISO shall not be less than 100% of theFair Market Value (110% for 10-Percent Shareholders) of a Share on the date of Grant. In the caseof an NSO, a Stock Option Agreement may specify an Exercise Price that varies in accordance with apredetermined formula while the NSO is outstanding.     (d) **Exercisability and Term.**Each Stock Option Agreement shall specify the date when all orany installment of the Option is to become exercisable. The Stock Option Agreement shall alsospecify the term of the Option; provided that the term of an ISO shall in no event exceed ten (10)years from the date of Grant. An ISO that is granted to a 10-Percent Shareholder shall have amaximum term of five (5) years. No Option can be exercised after the expiration date provided inthe applicable Stock Option Agreement. A Stock Option Agreement may provide for acceleratedexercisability in the event of the Optionee’s death, disability or retirement or other events andmay provide for expiration prior to the end of its term in the event of the termination of theOptionee’s service. A Stock Option Agreement may permit an Optionee to exercise an Option beforeit is vested, subject to the Company’s right of repurchase over any Shares acquired under theunvested portion of the Option (an “early exercise”), which right of repurchase shall lapse at thesame rate the Option would have vested had there been no early exercise. In no event shall theCompany be required to issue fractional Shares upon the exercise of an Option.     (e) **Modifications or Assumption of Options.**Within the limitations of the Plan, the Committeemay modify, extend or assume outstanding options or may accept the cancellation of outstandingoptions (whether granted by the Company or by another issuer) in return for the grant of newOptions for the same or a different number of Shares and at the same or a differentExercise Price. The foregoing notwithstanding, no modification of an Option shall, withoutthe consent of the Optionee, alter or impair his or her rights or obligations under such Option.     (f) **Transferability of Options.**Except as otherwise provided in the applicable Stock OptionAgreement and then only to the extent permitted by applicable law, no Option shall be transferableby the Optionee other than by will or by the laws of descent and distribution.
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Except as otherwiseprovided in the applicable Stock Option Agreement, an Option may be exercised during the lifetimeof the Optionee only or by the guardian or legal representative of the Optionee. No Option orinterest therein may be assigned, pledged or hypothecated by the Optionee during his lifetime,whether by operation of law or otherwise, or be made subject to execution, attachment or similarprocess.     (g) **No Rights as Stockholder.**An Optionee, or a transferee of an Optionee, shall have norights as a stockholder with respect to any Common Stock covered by an Option until such personbecomes entitled to receive such Common Stock by filing a notice of exercise and paying theExercise Price pursuant to the terms of such Option.     (h) **Restrictions on Transfer.**Any Shares issued upon exercise of an Option shall be subjectto such rights of repurchase, rights of first refusal and other transfer restrictions as theCommittee may determine. Such restrictions shall apply in addition to any restrictions that mayapply to holders of Shares generally and shall also comply to the extent necessary with applicablelaw.**SECTION 7. PAYMENT FOR OPTION SHARES.**     (a) **General Rule.**The entire Exercise Price of Shares issued upon exercise of Options shallbe payable in cash at the time when such Shares are purchased, except as follows: (i) In the case of an ISO granted under the Plan, payment shall bemade only pursuant to the express provisions of the applicable Stock OptionAgreement. he Stock Option Agreement may specify that payment may be made inany form(s) described in this Section 7.  (ii) In the case of an NSO granted under the Plan, the Committee mayin its discretion, at any time accept payment in any form(s) described in thisSection 7.     (b) **Surrender of Stock.**To the extent that this Section 7(b) is applicable, payment for allor any part of the Exercise Price may be made with Shares which have already been owned by theOptionee for such duration as shall be specified by the Committee. Such Shares shall be valued attheir Fair Market Value on the date when the new Shares are purchased under the Plan.     (c) **Promissory Note.**To the extent that this Section 7(c) is applicable, payment for all orany part of the Exercise Price may be made with a full-recourse promissory note.     (d) **Other Forms of Payment.**To the extent that this Section 7(d) is applicable, payment maybe made in any other form that is consistent with applicable laws, regulations and rules.
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**SECTION 8. TERMS AND CONDITIONS FOR AWARDS OF STOCK PURCHASE RIGHTS.**     (a) **Time, Amount and Form of Awards.**Awards under this Section 8 may be granted in the formof Stock Purchase Rights pursuant to which Restricted Stock will be awarded to a Key Employee.Such Rights may also be awarded in combination with NSOs, and such an Award may provide that theRestricted Stock will be forfeited in the event that the related NSOs is exercised.     (b) **Agreements.**Each Award of a Stock Purchase Right under the Plan shall be evidenced by aRestricted Stock Agreement between the Participant and the Company. Such Awards shall be subjectto all applicable terms and conditions of the Plan and may be subject to any other terms andconditions that are not inconsistent with the Plan and that the Committee deems appropriate forinclusion in the applicable Agreement. The provisions of the various Agreements entered into underthe Plan need not be identical.     (c) **Payment for Restricted Stock.**Restricted Stock may be issued pursuant to the Award of aStock Purchase Right with or without cash consideration under the Plan.     (d) **Vesting Conditions.**Each Award of Restricted Stock shall become vested, in full or ininstallments, upon satisfaction of the conditions specified in the applicable Agreement. AnAgreement may provide for accelerated vesting in the event of the Participant’s death, Disabilityor retirement or other events.     (e) **Assignment or Transfer of Restricted Stock.**Except as provided in Section 13, or in aRestricted Stock Agreement, or as required by applicable law, an Award granted under this Section 8shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject toany creditor’s process, whether voluntarily, involuntarily or by operation of law. Any act inviolation of this Section 8(e) shall be void. However, this Section 8(e) shall not preclude aParticipant from designating a beneficiary who will receive any outstanding Restricted Stock in theevent of the Participant’s death, nor shall it preclude a transfer of Restricted Stock by will orby the laws of descent and distribution.     (f) **Trusts.**Neither this Section 8 nor any other provision of the Plan shall preclude aParticipant from transferring or assigning Restricted Stock to (a) the trustee of a trust that isrevocable by such Participant alone, both at the time of the transfer or assignment and at alltimes thereafter prior to such Participant’s death, or (b) the trustee of any other trust to theextent approved in advance by the Committee in writing. A transfer or assignment of RestrictedStock from such trustee to any person other than such Participant shall be permitted only to theextent approved in advance by the Committee in writing, and Restricted Stock held by such trusteeshall be subject to all of the conditions and restrictions set forth in the Plan and in theapplicable Restricted Stock Agreement, as if such trustee were a party to such Agreement.     (g) **Voting and Dividend Rights.**The holders of Restricted Stock acquired pursuant to a StockPurchase Right awarded under the Plan shall have the same voting, dividend and other rights as theCompany’s other stockholders. A Restricted Stock Agreement, however, may require that the holdersof Restricted Stock invest any cash dividends received in additional Restricted Stock. Suchadditional
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Restricted Stock shall be subject to the same conditions and restrictions as the Awardwith respect to which the dividends were paid. Such additional Restricted Stock shall not reducethe number of Shares available under Section 5.**SECTION 9. PROTECTION AGAINST DILUTION.**     (a) **Adjustments.**In the event of a subdivision of the outstanding Shares, a declaration of adividend payable in Shares, a declaration of a dividend payable in a form other than Shares in anamount that has a material effect on the price of Shares, a combination or consolidation of theoutstanding Shares (by reclassification or otherwise) into a lesser number of Shares, arecapitalization, reorganization, merger, liquidation, spin-off or a similar occurrence, theCommittee shall make such adjustments as it, in its reasonable discretion, deems appropriate inorder to prevent the dilution or enlargement of rights hereunder in one or more of: (i) the number of Shares available for future Awards and the perperson Share limits under Section 5;  (ii) the number of Shares covered by each outstanding Award; or  (iii) the Exercise Price under each outstanding Option.     (b) **Participant Rights.**Except as provided in this Section 9, a Participant shall have norights by reason of any issue by the Company of stock of any class or securities convertible intostock of any class, any subdivision or consolidation of shares of stock of any class, the paymentof any stock dividend or any other increase or decrease in the number of shares of stock of anyclass.**SECTION 10. EFFECT OF A CHANGE IN CONTROL.**     (a) **Merger or Reorganization.**In the event that the Company is a party to a merger or otherreorganization, outstanding Awards shall be subject to the agreement of merger or reorganization.Such agreement may provide, without limitation, for the assumption of outstanding Awards by thesurviving corporation or its parent, for their continuation by the Company (if the Company is asurviving corporation), for accelerated vesting or for their cancellation with or withoutconsideration.     (b) **Acceleration.**Except as otherwise provided in the applicable Stock Option Agreement orRestricted Stock Agreement, in the event that a Change in Control occurs with respect to theCompany and the applicable agreement of merger or reorganization provides for assumption orcontinuation of Awards pursuant to Section 10(a), no acceleration of vesting shall occur. In theevent that a Change in Control occurs with respect to the Company and there is no assumption orcontinuation of Awards pursuant to Section 10(a), all Awards shall vest and become immediatelyexercisable.**SECTION 11. LIMITATIONS ON RIGHTS.**     (a) **Retention Rights.**Neither the Plan nor any Award granted under the Plan shall be deemedto give any individual a right to remain an employee, consultant or director of the
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Company, aParent, a Subsidiary or an Affiliate. The Company and its Parents and Subsidiaries and Affiliatesreserve the right to terminate the Service of any person at any time, and for any reason, subjectto applicable laws, the Company’s Certificate of Incorporation and Bylaws and a written employmentagreement (if any).     (b) **Stockholders’ Rights.**A Participant shall have no dividend rights, voting rights or otherrights as a stockholder with respect to any Shares covered by his or her Award prior to theissuance of a stock certificate for such Shares. No adjustment shall be made for cash dividends orother rights for which the record date is prior to the date when such certificate is issued, exceptas expressly provided in Section 9.     (c) **Regulatory Requirements.**Any other provision of the Plan notwithstanding, the obligationof the Company to issue Shares under the Plan shall be subject to all applicable laws, rules andregulations and such approval by any regulatory body as may be required. The Company reserves theright to restrict, in whole or in part, the delivery of Shares pursuant to any Award prior to thesatisfaction of all legal requirements relating to the issuance of such Shares, to theirregistration, qualification or listing or to an exemption from registration, qualification orlisting.**SECTION 12. WITHHOLDING TAXES.**     (a) **General.**A Participant shall make arrangements satisfactory to the Company for thesatisfaction of any withholding tax obligations that arise in connection with his or her Award.The Company shall not be required to issue any Shares or make any cash payment under the Plan untilsuch obligations are satisfied.     (b) **Share Withholding.**If a public market for the Company’s Shares exists, the Committee maypermit a Participant to satisfy all or part of his or her withholding or income tax obligations byhaving the Company withhold all or a portion of any Shares that otherwise would be issued to him orher or by surrendering all or a portion of any Shares that he or she previously acquired. SuchShares shall be valued at their Fair Market Value on the date when taxes otherwise would bewithheld in cash. In no event may the Company allow Shares to be withheld in an amount thatexceeds the minimum statutory withholding rates for federal and state tax purposes, includingpayroll taxes. Any payment of taxes by assigning Shares to the Company may be subject torestrictions, including, but not limited to, any restrictions required by rules of the Securitiesand Exchange Commission.**SECTION 13. DURATION AND AMENDMENTS.**     (a) **Term of the Plan.**The Plan, as set forth herein, shall become effective on the date ofits adoption by the Board, subject to the approval of the Company’s stockholders. No Options shallbe exercisable until such stockholder approval is obtained. In the event that the stockholdersfail to approve the Plan within twelve (12) months after its adoption by the Board, any Awards madeshall be null and void and no additional Awards shall be made. The Plan shallterminate on the date that is ten (10) years after its adoption by the Board and may beterminated on any earlier date pursuant to Section 13(b).
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     (b) **Right to Amend or Terminate the Plan.**The Board may amend or terminate the Plan at anytime and for any reason. The termination of the Plan, or any amendment thereof, shall not affectany Award previously granted under the Plan. No Awards shall be granted under the Plan after thePlan’s termination. An amendment of the Plan shall be subject to the approval of the Company’sstockholders only to the extent required by applicable laws, regulations or rules.**SECTION 14. EXECUTION.**     *To record the adoption of the Plan by the Board, the Company has caused its duly authorizedofficer to execute this Plan on behalf of the Company.*         PDF SOLUTIONS, INC.           By /s/ Keith A. Jones           Title Chief Financial Officer  
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