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


 





















 


(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


 


11





















 


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


 


12





















 


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


 


14





















 


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


 


15





















 


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:


 


16





















 


(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


 


17





















 


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


 


18





















 


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.


 


19





















 


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


 


20





















 


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.


 


21





















 


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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