**Exhibit10.26**

 

**OMNIVISIONTECHNOLOGIES, INC.**

 

**2007EQUITY INCENTIVE PLAN**

 

**(asamended July 30, 2009)**

 

# 1.                                       Definitions.  As usedherein, the following definitions will apply:

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## (a)                                  “Administrator”means the Board or any of its Committees as will be administering the 2007Plan, in accordance with Section 4 of the 2007 Plan.

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## (b)                                 “Applicable Laws”means the requirements relating to the administration of equity-based awardsunder U.S. state corporate laws, U.S. federal and state securities laws, theCode, any stock exchange or quotation system on which the Common Stock islisted or quoted and the applicable laws of any foreign country or jurisdictionwhere Awards are, or will be, granted under the 2007 Plan.

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## (c)                                  “Award”means, individually or collectively, a grant under the 2007 Plan of Options,Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,Performance Units, Performance Shares and other stock or cash awards as theAdministrator may determine.

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## (d)                                 “Award Agreement”means the written or electronic agreement setting forth the terms andprovisions applicable to each Award granted under the 2007 Plan.  TheAward Agreement is subject to the terms and conditions of the 2007 Plan.

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## (e)                                  “Board”means the Board of Directors of the Company.

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## (f)                                    “Change inControl” means the occurrence of any of the following events:

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### (i)                                     Any “person” (assuch term is used in Sections 13(d) and 14(d) of the Exchange Act)becomes the “beneficial owner” (as defined in Rule 13d-3 of the ExchangeAct), directly or indirectly, of securities of the Company representing fiftypercent (50%) or more of the total voting power represented by the Company’sthen outstanding voting securities; or

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### (ii)                                  The consummation ofthe sale or disposition by the Company of all or substantially all of theCompany’s assets;

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### (iii)                               A change in thecomposition of the Board occurring within a two-year period, as a result ofwhich fewer than a majority of the directors are Incumbent Directors.  “IncumbentDirectors” means directors who either (A) are Directors as of theeffective date of the 2007 Plan, or (B) are elected, or nominated forelection, to the Board with the affirmative votes of at least a majority of theIncumbent Directors at the time of such election or nomination (but will notinclude an individual whose election or nomination is in connection with anactual or threatened proxy contest relating to the election of directors to theCompany); or

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### (iv)                              The consummation ofa merger or consolidation of the Company with any other corporation, other thana merger or consolidation which would result in the voting 

 

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### securitiesof the Company outstanding immediately prior thereto continuing to represent(either by remaining outstanding or by being converted into voting securitiesof the surviving entity or its parent) at least fifty percent (50%) of thetotal voting power represented by the voting securities of the Company or suchsurviving entity or its parent outstanding immediately after such merger orconsolidation.

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## (g)                                 “Code” meansthe Internal Revenue Code of 1986, as amended.  Any reference to a sectionof the Code herein will be a reference to any successor or amended section ofthe Code.

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## (h)                                 “Committee”means a committee of Directors or of other individuals satisfying ApplicableLaws appointed by the Board in accordance with Section 4 hereof.

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## (i)                                     “Common Stock”means the common stock of the Company.

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## (j)                                     “Company”means OmniVision Technologies, Inc., a Delaware corporation, or anysuccessor thereto.

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## (k)                                  “Consultant”means any person, including an advisor, engaged by the Company or a Parent orSubsidiary to render services to such entity.

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## (l)                                     “DeterminationDate” means the latest possible date that will not jeopardize thequalification of an Award granted under the 2007 Plan as “performance-basedcompensation” under Section 162(m) of the Code.

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## (m)                               “Director”means a member of the Board.

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## (n)                                 “Disability”means total and permanent disability as defined in Section 22(e)(3) ofthe Code, provided that in the case of Awards other than Incentive StockOptions, the Administrator in its discretion may determine whether a permanentand total disability exists in accordance with uniform and non-discriminatorystandards adopted by the Administrator from time to time.

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## (o)                                 “Employee”means any person, including Officers and Directors, employed by the Company orany Parent or Subsidiary of the Company.  Neither service as a Directornor payment of a director’s fee by the Company will be sufficient to constitute“employment” by the Company.

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## (p)                                 “Exchange Act”means the Securities Exchange Act of 1934, as amended.

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## (q)                                 “Fair MarketValue” means, as of any date, the value of Common Stock as theAdministrator may determine in good faith by reference to the price of suchstock on any established stock exchange or a national market system on the dayof determination if the Common Stock is so listed on any established stockexchange or a national market system.  If the Common Stock is not listedon any established stock exchange or a national market system, the value of theCommon Stock as the Administrator may determine in good faith.

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## (r)                                    “Fiscal Year”means the fiscal year of the Company.

 

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## (s)                                  “Incentive StockOption” means an Option that by its terms qualifies and is otherwiseintended to qualify as an incentive stock option within the meaning of Section 422of the Code and the regulations promulgated thereunder.

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## (t)                                    “Inside Director”means a Director who is an Employee.

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## (u)                                 “NonstatutoryStock Option” means an Option that by its terms does not qualify or is notintended to qualify as an Incentive Stock Option.

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## (v)                                 “Officer”means a person who is an officer of the Company within the meaning of Section 16of the Exchange Act and the rules and regulations promulgated thereunder.

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## (w)                               “Option”means a stock option granted pursuant to the 2007 Plan.

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## (x)                                   “OutsideDirector” means a Director who is not an Employee.

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## (y)                                 “Parent”means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) ofthe Code.

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## (z)                                   “Participant”means the holder of an outstanding Award.

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## (aa)                            “PerformancePeriod” means any Fiscal Year of the Company or such other period asdetermined by the Administrator in its sole discretion.

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## (bb)                          “PerformanceShare” means an Award denominated in Shares which may be earned in whole orin part upon attainment of Performance Goals or other vesting criteria as theAdministrator may determine pursuant to Section 10.

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## (cc)                            “PerformanceUnit” means an Award which may be earned in whole or in part uponattainment of Performance Goals or other vesting criteria as the Administratormay determine and which may be settled for cash, Shares or other securities ora combination of the foregoing pursuant to Section 10.

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## (dd)                          “Period ofRestriction” means the period during which the transfer of Shares ofRestricted Stock are subject to restrictions and therefore, the Shares aresubject to a substantial risk of forfeiture.  Such restrictions may bebased on the passage of time, the achievement of target levels of performance,or the occurrence of other events as determined by the Administrator.

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## (ee)                            “2007 Plan”means this 2007 Equity Incentive Plan.

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## (ff)                                “RestrictedStock” means Shares issued pursuant to a Restricted Stock award under Section 7of the 2007 Plan, or issued pursuant to the early exercise of an Option.

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## (gg)                          “RestrictedStock Unit” means a bookkeeping entry representing an amount equal to theFair Market Value of one Share, granted pursuant to Section 8.  EachRestricted Stock Unit represents an unfunded and unsecured obligation of theCompany.

 

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## (hh)                          “Retirement”means a Service Provider who retires from the Company on or after age sixty-two(62) and such Service Provider has at least five (5) years of service withthe Company at the date of retirement; provided, that, the Administrator,notwithstanding the foregoing, has the discretion to determine when a ServiceProvider retires so long as such determination is not less favorable thanprovided for in the foregoing definition.

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## (ii)                                  “Rule 16b-3”means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,as in effect when discretion is being exercised with respect to the 2007 Plan.

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## (jj)                                  “Section 16(b)” means Section 16(b) of the Exchange Act.

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## (kk)                            “ServiceProvider” means an Employee, Director or Consultant.

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## (ll)                                  “Share”means a share of the Common Stock, as adjusted in accordance with Section 14of the 2007 Plan.

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## (mm)                      “StockAppreciation Right” means an Award, granted alone or in connection with anOption, that pursuant to Section 9 is designated as a Stock AppreciationRight.

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## (nn)                          “Subsidiary”means a “subsidiary corporation,” whether now or hereafter existing, as definedin Section 424(f) of the Code.

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## (oo)                          “SuccessorCorporation” has the meaning given to such term in Section 14(c) ofthe 2007 Plan.

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# 2.                                       Purposes of the2007 Plan.  The purposes of the 2007 Plan are:

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·                                          to attractand retain the best available personnel for positions of substantialresponsibility,

 

·                                          to provideincentives to individuals who perform services to the Company, and

 

·                                          to promotethe success of the Company’s business.

 

The 2007 Plan permits thegrant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock,Restricted Stock Units, Stock Appreciation Rights, Performance Units,Performance Shares and other stock or cash awards as the Administrator maydetermine.

 

# 3.                                       Stock Subject to the 2007Plan.

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## (a)                                  Stock Subject tothe 2007 Plan.  Subject to the provisions of Section 14 of the 2007 Plan,the maximum aggregate number of Shares that may be awarded and sold under the2007 Plan is 6,000,000 Shares, plusany Shares subject to stock options or similar awards granted under the Company’s2000 Stock Plan (the “2000 Plan”) that expire or otherwise terminatewithout having been exercised in full and Shares issued pursuant to awardsgranted under the 2000 Plan that are forfeited to or repurchased by theCompany, with the maximum number of Shares to be added to the 2007 Planpursuant to such terminations, forfeitures and repurchases not to exceed 2,900,000.

 

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## Shares; provided, however,that the maximum number of Shares that may return to the 2007 Plan fromcancelled awards under the 2007 Plan and the 2000 Plan pursuant to the optionexchange program approved by the stockholders at the Company’s 2009 AnnualMeeting of Stockholders (the “exchange program”) will be 2,900,000Shares after taking into account the replacement awards granted pursuant to theExchange Program.  The Shares maybe authorized, but unissued, or reacquired Common Stock.

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## (b)                                 Full Value Awards.  Any Sharessubject to Awards granted with an exercise price less than the Fair MarketValue on the date of grant of such Awards will be counted against the numericallimits of this Section 3 as 1.6 Shares for every one Share subjectthereto.  Further, if Shares acquired pursuant to any such Award areforfeited to or repurchased by the Company and would otherwise return to the2007 Plan pursuant to Section 3(c), 1.6 times the number of Shares soforfeited or repurchased will return to the 2007 Plan and will again becomeavailable for issuance.

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## (c)                                  Lapsed Awards.  If an Awardexpires or becomes unexercisable without having been exercised in full, or,with respect to Restricted Stock, Restricted Stock Units, Performance Shares orPerformance Units, is forfeited to or repurchased by the Company, theunpurchased Shares (or for Awards other than Options and Stock AppreciationRights, the forfeited or repurchased Shares) which were subject thereto willbecome available for future grant or sale under the 2007 Plan (unless the 2007Plan has terminated).  With respect to Stock Appreciation Rights, all ofthe Shares covered by the Award (that is, Shares actually issued pursuant to aStock Appreciation Right, as well as the Shares that represent payment of theexercise price) shall cease to be available under the 2007 Plan.  However,Shares that have actually been issued under the 2007 Plan under any Award willnot be returned to the 2007 Plan and will not become available for futuredistribution under the 2007 Plan; provided, however, that if unvested Shares ofRestricted Stock, Restricted Stock Units, Performance Shares or PerformanceUnits are repurchased by the Company or are forfeited to the Company, suchShares will become available for future grant under the 2007 Plan.  Sharesused to pay the tax and exercise price of an Award will not become availablefor future grant or sale under the 2007 Plan.  To the extent an Awardunder the 2007 Plan is paid out in cash rather than Shares, such cash paymentwill not result in reducing the number of Shares available for issuance underthe 2007 Plan.  Notwithstanding the foregoing and, subject to adjustmentprovided in Section 14, the maximum number of Shares that may be issuedupon the exercise of Incentive Stock Options shall equal the aggregate Sharenumber stated in Section 3(a), plus, to the extent allowable under Section 422of the Code, any Shares that become available for issuance under the 2007 Planunder this Section 3(c).

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## (d)                                 Share Reserve.  TheCompany, during the term of this 2007 Plan, will at all times reserve and keepavailable such number of Shares as will be sufficient to satisfy therequirements of the 2007 Plan.

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# 4.                                       Administration ofthe 2007 Plan.

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## (a)                                  Procedure.

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### (i)                                     MultipleAdministrative Bodies.  Different Committees with respect to differentgroups of Service Providers may administer the 2007 Plan.

 

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### (ii)                                  Section 162(m).  To theextent that the Administrator determines it to be desirable to qualify Awardsgranted hereunder as “performance-based compensation” within the meaning of Section 162(m) ofthe Code, the 2007 Plan will be administered by a Committee of two or more “outsidedirectors” within the meaning of Section 162(m) of the Code.

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### (iii)                               Rule 16b-3.  To theextent desirable to qualify transactions hereunder as exempt under Rule 16b-3,the transactions contemplated hereunder will be structured to satisfy therequirements for exemption under Rule 16b-3.

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### (iv)                              Awards to OutsideDirectors.  Awards to Outside Directors granted hereunder will be grantedonly by the Compensation Committee of the Board, as such Compensation Committeeis comprised from time to time, and such Awards will not be made by or subjectto the approval of the Board as a whole or any other party.

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### (v)                                 Other Administration.  Other thanas provided above, the 2007 Plan will be administered by (A) the Board or (B) aCommittee, which committee will be constituted to satisfy Applicable Laws.

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## (b)                                 Powers of theAdministrator.  Subject to the provisions of the 2007 Plan, and in the case of aCommittee, subject to the specific duties delegated by the Board to suchCommittee, the Administrator will have the authority, in its discretion:

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### (i)                                     to determine theFair Market Value;

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### (ii)                                  to select theService Providers to whom Awards may be granted hereunder;

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### (iii)                               to determine theterms and conditions, not inconsistent with the terms of the 2007 Plan, of anyAward granted hereunder; provided, however, that the number ofShares subject to Awards for which vesting may be accelerated by theAdministrator, other than in connection with a Change in Control or upon or inconnection with a Participant’s termination of service due to death, Disabilityor Retirement, is limited to 5% of the aggregate number of Shares subject tothe 2007 Plan;

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### (iv)                              to construe andinterpret the terms of the 2007 Plan and Awards granted pursuant to the 2007Plan;

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### (v)                                 to prescribe, amendand rescind rules and regulations relating to the 2007 Plan, including rules andregulations relating to sub-plans established for the purpose of satisfyingapplicable foreign laws;

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### (vi)                              to modify or amendeach Award (subject to Section 19(c) of the 2007Plan); provided, however,that the number of Shares subject to Awards for which vesting may beaccelerated by the Administrator, other than in connection with a Change inControl or upon or in connection with a Participant’s termination of servicedue to death, Disability or Retirement, is limited to 5% of the aggregatenumber of Shares subject to the 2007 Plan;

 

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### (vii)                           to authorize anyperson to execute on behalf of the Company any instrument required to effectthe grant of an Award previously granted by the Administrator;

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### (viii)                        to allow aParticipant to defer the receipt of the payment of cash or the delivery ofShares that would otherwise be due to such Participant under an Award pursuantto such procedures as the Administrator may determine; and

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### (ix)                                to make all otherdeterminations deemed necessary or advisable for administering the 2007 Plan.

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## (c)                                  Effectof Administrator’s Decision.  The Administrator’s decisions,determinations and interpretations will be final and binding on allParticipants and any other holders of Awards.

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# 5.                                       Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, StockAppreciation Rights, Performance Units, Performance Shares and such other cashor stock awards as the Administrator determines may be granted to ServiceProviders.  Incentive Stock Options may be granted only to Employees.

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# 6.                                       Stock Options.

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## (a)                                  Limitations.  Each Optionwill be designated in the Award Agreement as either an Incentive Stock Optionor a Nonstatutory Stock Option.  However, notwithstanding suchdesignation, to the extent that the aggregate Fair Market Value of the Shareswith respect to which Incentive Stock Options are exercisable for the firsttime by the Participant during any calendar year (under all plans of theCompany and any Parent or Subsidiary) exceeds $100,000, such Options will be treatedas Nonstatutory Stock Options.  For purposes of this Section 6(a),Incentive Stock Options will be taken into account in the order in which theywere granted.  The Fair Market Value of the Shares will be determined asof the time the Option with respect to such Shares is granted.

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## (b)                                 Number of Shares.  TheAdministrator will have complete discretion to determine the number of Sharessubject to Options granted to any Participant, provided that during any FiscalYear, no Participant may be granted Options covering more than 1,000,000Shares.  Notwithstanding the foregoing limitation, in connection with aParticipant’s initial service as an Employee, an Employee may be grantedOptions covering up to an additional 1,000,000 Shares.

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## (c)                                  Term of Option.  TheAdministrator will determine the term of each Option in its sole discretion;provided, however, that the term will be no more than seven (7) yearsfrom the date of grant thereof.  Moreover, in the case of an IncentiveStock Option granted to a Participant who, at the time the Incentive StockOption is granted, owns stock representing more than ten percent (10%) of thetotal combined voting power of all classes of stock of the Company or anyParent or Subsidiary, the term of the Incentive Stock Option will be five (5) yearsfrom the date of grant or such shorter term as may be provided in the AwardAgreement.

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## (d)                                 Option ExercisePrice and Consideration.

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### (i)                                     Exercise Price.  The pershare exercise price for the Shares to be issued pursuant to exercise of anOption will be determined by the Administrator, but will be no less than 

 

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### 100%of the Fair Market Value per Share on the date of grant.  In addition, inthe case of an Incentive Stock Option granted to an Employee who, at the timethe Incentive Stock Option is granted, owns stock representing more than tenpercent (10%) of the voting power of all classes of stock of the Company or anyParent or Subsidiary, the per Share exercise price will be no less than 110% ofthe Fair Market Value per Share on the date of grant.  Notwithstanding theforegoing provisions of this Section 6(d), Options may be granted with aper Share exercise price of less than 100% of the Fair Market Value per Shareon the date of grant pursuant to a transaction described in, and in a mannerconsistent with, Section 424(a) of the Code.  The exercise pricefor an Option may not be reduced without the consent of the Company’sstockholders.  This will include, without limitation, a repricing of theOption as well as an Option exchange program whereby the Participant agrees tocancel an existing Option in exchange for an Option, Stock Appreciation Rightor other Award.

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### (ii)                                  Waiting Period andExercise Dates.  Subject to sections 4(b)(iii) and (vi) of the 2007Plan, at the time an Option is granted, the Administrator will fix the periodwithin which the Option may be exercised and will determine any conditions thatmust be satisfied before the Option may be exercised.

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### (iii)                               Form ofConsideration.  The Administrator will determine the acceptable form(s) ofconsideration for exercising an Option, including the method of payment, to theextent permitted by Applicable Laws.

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## (e)                                  Exercise of Option.

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### (i)                                     Procedure forExercise; Rights as a Stockholder.  Any Option granted hereunder will beexercisable according to the terms of the 2007 Plan and at such times and undersuch conditions as determined by the Administrator and set forth in the AwardAgreement.  An Option may not be exercised for a fraction of a Share.

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An Option will be deemedexercised when the Company receives: (i) notice of exercise (in such formas the Administrator specify from time to time) from the person entitled toexercise the Option, and (ii) full payment for the Shares with respect towhich the Option is exercised (together with all applicable withholdingtaxes).  No adjustment will be made for a dividend or other right forwhich the record date is prior to the date the Shares are issued, except asprovided in Section 14 of the 2007 Plan.

 

### (ii)                                  Termination ofRelationship as a Service Provider.  If a Participant ceases to be aService Provider, other than upon the Participant’s death or Disability, theParticipant may exercise his or her Option within such period of time as isspecified in the Award Agreement to the extent that the Option is vested on thedate of termination (but in no event later than the expiration of the term ofsuch Option as set forth in the Award Agreement).  In the absence of aspecified time in the Award Agreement, the Option will remain exercisable forthree (3) months following the Participant’s termination.  Unlessotherwise provided by the Administrator, if on the date of termination theParticipant is not vested as to his or her entire Option, the Shares covered bythe unvested portion of the Option will revert to the 2007 Plan.  If aftertermination the Participant does not exercise his or her Option within the timespecified by the Administrator, the Option will terminate, and the Shares coveredby such Option will revert to the 2007 Plan.

 

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### (iii)                               Disability ofParticipant.  If a Participant ceases to be a Service Provider as a result ofthe Participant’s Disability, the Participant may exercise his or her Optionwithin such period of time as is specified in the Award Agreement to the extentthe Option is vested on the date of termination (but in no event later than theexpiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option willremain exercisable for twelve (12) months following the Participant’stermination.  Unless otherwise provided by the Administrator, if on thedate of termination the Participant is not vested as to his or her entireOption, the Shares covered by the unvested portion of the Option will revert tothe 2007 Plan.  If after termination the Participant does not exercise hisor her Option within the time specified herein, the Option will terminate, andthe Shares covered by such Option will revert to the 2007 Plan.

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### (iv)                              Death ofParticipant.  If a Participant dies while a Service Provider, the Option may beexercised following the Participant’s death within such period of time as isspecified in the Award Agreement to the extent that the Option is vested on thedate of death (but in no event may the option be exercised later than theexpiration of the term of such Option as set forth in the Award Agreement), bythe Participant’s designated beneficiary, provided such beneficiary has beendesignated prior to Participant’s death in a form acceptable to theAdministrator.  If no such beneficiary has been designated by theParticipant, then such Option may be exercised by the personal representativeof the Participant’s estate or by the person(s) to whom the Option istransferred pursuant to the Participant’s will or in accordance with the lawsof descent and distribution.  In the absence of a specified time in theAward Agreement, the Option will remain exercisable for twelve (12) monthsfollowing Participant’s death.  Unless otherwise provided by theAdministrator, if at the time of death Participant is not vested as to his orher entire Option, the Shares covered by the unvested portion of the Option willimmediately revert to the 2007 Plan.  If the Option is not so exercisedwithin the time specified herein, the Option will terminate, and the Sharescovered by such Option will revert to the 2007 Plan.

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### (v)                                 Other Termination.  AParticipant’s Award Agreement may also provide that if the exercise of theOption following the termination of Participant’s status as a Service Provider(other than upon the Participant’s death or Disability) would result inliability under Section 16(b), then the Option will terminate on theearlier of (A) the expiration of the term of the Option set forth in theAward Agreement, or (B) the 10th day after the last date on which suchexercise would result in such liability under Section 16(b). Finally, a Participant’s Award Agreement may also provide that if the exerciseof the Option following the termination of the Participant’s status as aService Provider (other than upon the Participant’s death or disability) wouldbe prohibited at any time solely because the issuance of Shares would violatethe registration requirements under the Securities Act, then the Option willterminate on the earlier of (A) the expiration of the term of the Option,or (B) the expiration of a period of three (3) months after thetermination of the Participant’s status as a Service Provider during which theexercise of the Option would not be in violation of such registrationrequirements.

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# 7.                                       Restricted Stock.

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## (a)                                  Grant of RestrictedStock.  Subject to the terms and provisions of the 2007Plan, theAdministrator, at any time and from time to time, may grant Shares ofRestricted Stock to Service Providers in such amounts as the Administrator, inits sole discretion, will determine.

 

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## (b)                                 Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement thatwill specify the Period of Restriction, the number of Shares granted, and suchother terms and conditions as the Administrator, in its sole discretion, willdetermine.  Notwithstanding the foregoing sentence, during any Fiscal Yearno Participant may receive more than an aggregate of 200,000 Shares ofRestricted Stock; provided, however, that in connection with a Participant’sinitial service as an Employee, an Employee may be granted an aggregate of upto an additional 300,000 Shares of Restricted Stock.  Unless theAdministrator determines otherwise, Shares of Restricted Stock will be held bythe Company as escrow agent until the restrictions on such Shares have lapsed.

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## (c)                                  Transferability.  Except asprovided in this Section 7, Shares of Restricted Stock may not be sold,transferred, pledged, assigned, or otherwise alienated or hypothecated untilthe end of the applicable Period of Restriction.

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## (d)                                 Other Restrictions.  TheAdministrator, in its sole discretion, may impose such other restrictions onShares of Restricted Stock as it may deem advisable or appropriate.

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## (e)                                  Vesting Requirements. Except as otherwise provided in this Section 7, Shares of Restricted Stockcovered by each Restricted Stock grant made under the 2007 Plan will bereleased from escrow as soon as practicable after the last day of the Period ofRestriction.  The restrictions will lapse at a rate determined by theAdministrator; provided, however, that except as otherwise provided in Section 14(c),Shares of Restricted Stock (other than Restricted Stock granted pursuant to astockholder approved exchange program) will not vest more rapidly thanone-third (1/3rd) of the total number of Shares of Restricted Stock subject toan Award each year from the date of grant (or, with respect to an Award grantedto a Participant in connection with or as part of his or her initial employmentwith the Company or any Parent or Subsidiary of the Company, the date aParticipant commences employment the Company or any Parent or Subsidiary of theCompany), unless the Administrator determines that the Award is to vest uponthe achievement of performance criteria and the period for measuring such performancewill cover at least twelve (12) months.  Subject to Sections 4(b)(iii) and(vi) and notwithstanding the foregoing sentence, the Administrator, in itssole discretion, may provide at the time of or following the date of grant foraccelerated vesting for an Award of Restricted Stock upon or in connection witha Change in Control or upon or in connection with a Participant’s terminationof service, including, without limitation, due to death, Disability orRetirement.

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## (f)                                    Voting Rights.  During the Periodof Restriction, Service Providers holding Shares of Restricted Stock grantedhereunder may exercise full voting rights with respect to those Shares, unlessthe Administrator determines otherwise.

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## (g)                                 Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares ofRestricted Stock will be entitled to receive all dividends and otherdistributions paid with respect to such Shares unless otherwise provided in theAward Agreement.  If any such dividends or distributions are paid inShares, the Shares will be subject to the same restrictions on transferabilityand forfeitability as the Shares of Restricted Stock with respect to which theywere paid.

 

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## (h)                                 Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for whichrestrictions have not lapsed will revert to the Company and will be availablefor grant under the 2007 Plan.

 

# 8.                                       Restricted Stock Units.

 

## (a)                                  Grant.  Restricted StockUnits may be granted at any time and from time to time as determined by theAdministrator.  Each Restricted Stock Unit grant will be evidenced by anAward Agreement that will specify such other terms and conditions as the Administrator,in its sole discretion, will determine, including all terms, conditions, andrestrictions related to the grant, the number of Restricted Stock Units and theform of payout, which, subject to Section 8(d), may be left to thediscretion of the Administrator.  Notwithstanding anything to the contraryin this subsection (a), during any fiscal year of the Company, no Participantmay receive more than an aggregate of 200,000 Restricted Stock Units; provided,however, that in connection with a Participant’s initial service as anEmployee, an Employee may be granted an aggregate of up to an additional300,000 Restricted Stock Units.

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## (b)                                 Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, dependingon the extent to which the criteria are met, will determine the number ofRestricted Stock Units that will be paid out to the Participant ; provided,however, that except as otherwise provided in Section 14(c), an Award ofRestricted Stock Units (other than Restricted Stock Units granted pursuant to astockholder approved exchange program) will not vest more rapidly thanone-third (1/3rd) of the total number of Restricted Stock Units subject to anAward each year from the date of grant (or, with respect to an Award granted toa Participant in connection with or as part of his or her initial employmentwith the Company or any Parent or Subsidiary of the Company, the date aParticipant commences employment the Company or any Parent or Subsidiary of theCompany), unless the Administrator determines that the Award is to vest uponthe achievement of performance criteria and the period for measuring suchperformance will cover at least twelve (12) months.  Subject to Sections4(b)(iii) and (vi) and notwithstanding the foregoing sentence, theAdministrator, in its sole discretion, may provide at the time of or followingthe date of grant for accelerated vesting for an Award of Restricted StockUnits upon or in connection with a Change in Control or upon or in connectionwith a Participant’s termination of service, including, without limitation, dueto death, Disability or Retirement.  The Administrator may set vestingcriteria based upon the achievement of Company-wide, business unit, orindividual goals (including, but not limited to, continued employment), or anyother basis determined by the Administrator in its discretion.

##  

## (c)                                  Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitledto receive a payout as specified in the Award Agreement.  Notwithstandingthe foregoing, at any time after the grant of Restricted Stock Units, theAdministrator, in its sole discretion, may reduce or waive any vesting criteriathat must be met to receive a payout.

##  

## (d)                                 Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicableafter the date(s) set forth in the Award Agreement.  TheAdministrator, in its sole discretion, may pay earned Restricted Stock Units incash, Shares, or a combination thereof.

 

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##  

## (e)                                  Cancellation.  On the date setforth in the Award Agreement, all unearned Restricted Stock Units will beforfeited to the Company.

 

# 9.                                       Stock Appreciation Rights.

##  

## (a)                                  Grant of Stock Appreciation Rights. Subject to the terms and conditions of the 2007 Plan including, but not limitedto, Sections 4(b)(iii) and (vi) of the 2007 Plan, a StockAppreciation Right may be granted to Service Providers at any time and fromtime to time as will be determined by the Administrator, in its solediscretion.

##  

## (b)                                 Number of Shares.  TheAdministrator will have complete discretion to determine the number of StockAppreciation Rights granted to any Participant, provided that during any FiscalYear, no Participant may be granted Stock Appreciation Rights covering morethan 1,000,000 Shares.  Notwithstanding the foregoing limitation, inconnection with a Participant’s initial service as an Employee, an Employee maybe granted Stock Appreciation Rights covering up to an additional 1,000,000Shares.

##  

## (c)                                  Exercise Price and Other Terms. The Administrator, subject to the provisions of the 2007 Plan, will havecomplete discretion to determine the terms and conditions of Stock AppreciationRights granted under the 2007 Plan, provided, however, that the exercise pricewill be not less than one hundred percent (100%) of the Fair Market Value of aShare on the date of grant.  The exercise price for a Stock AppreciationRight may not be reduced without the consent of the Company’s stockholders. This will include, without limitation, a repricing of the Stock AppreciationRight as well as an exchange program whereby the Participant agrees to cancelan existing Stock Appreciation Right in exchange for an Option, StockAppreciation Right or other Award.

##  

## (d)                                 Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreementthat will specify the exercise price, the term of the Stock Appreciation Right,the conditions of exercise, and such other terms and conditions as theAdministrator, in its sole discretion, will determine.

##  

## (e)                                  Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the 2007 Plan will expire upon thedate determined by the Administrator, in its sole discretion, and set forth inthe Award Agreement; provided, however, that the term will be no more thanseven (7) years from the date of grant thereof.  Notwithstandingthe foregoing, the rules of Section 6(e) also will apply toStock Appreciation Rights.

##  

## (f)                                    Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled toreceive payment from the Company in an amount determined by multiplying:

###  

### (i)                                     The difference between the Fair Market Value of a Share on the date ofexercise over the exercise price; times

###  

### (ii)                                  The number of Shares with respect to which the Stock Appreciation Rightis exercised.

 

Atthe discretion of the Administrator, the payment upon Stock Appreciation Rightexercise may be in cash, in Shares of equivalent value, or in some combinationthereof.

 

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#  

# 10.                                 Performance Units and Performance Shares.

##  

## (a)                                  Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers atany time and from time to time, as will be determined by the Administrator, inits sole discretion.  The Administrator will have complete discretion indetermining the number of Performance Units/Shares granted to each Participantprovided that during any Fiscal Year, (i) no Participant may receivePerformance Units having an initial value greater than $2,000,000, and (ii) noParticipant may receive more than 200,000 Performance Shares.

 

Notwithstanding theforegoing limitation, in connection with a Participant’s initial service as anEmployee, an Employee may be granted up to an additional 300,000 PerformanceShares.

##  

## (b)                                 Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by theAdministrator on or before the date of grant.  Each Performance Share willhave an initial value equal to the Fair Market Value of a Share on the date ofgrant.

##  

## (c)                                  Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions;provided, however, that except as otherwise provided in Section 14(c),Performance Shares/Units (other than Performance Shares/Units granted pursuantto a stockholder approved exchange program) will not vest more rapidly thanone-third (1/3rd) of the total number of Performance Shares/Units subject to anAward each year from the date of grant (or, with respect to an Award granted toa Participant in connection with or as part of his or her initial employmentwith the Company or any Parent or Subsidiary of the Company, the date aParticipant commences employment the Company or any Parent or Subsidiary of theCompany), unless the Administrator determines that the Award is to vest uponthe achievement of performance criteria and the period for measuring suchperformance will cover at least twelve (12) months.  Subject to Sections4(b)(iii) and (vi) and notwithstanding the foregoing sentence, theAdministrator, in its sole discretion, may provide at the time of or followingthe date of grant for accelerated vesting for an Award of PerformanceShares/Units in connection with a Change in Control or upon or in connectionwith a Participant’s termination of service, including, without limitation, dueto death, Disability or Retirement.  The Administrator may set vestingcriteria based upon the achievement of Company-wide, business unit, orindividual goals (including, but not limited to, continued employment), or anyother basis determined by the Administrator in its discretion.

##  

## (d)                                 Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of PerformanceUnits/Shares will be entitled to receive a payout of the number of PerformanceUnits/Shares earned by the Participant over the Performance Period, to bedetermined as a function of the extent to which the corresponding performanceobjectives or other vesting provisions have been achieved.  After thegrant of a Performance Unit/Share, the Administrator, in its sole discretion,may reduce or waive any performance objectives or other vesting provisions forsuch Performance Unit/Share.

##  

## (e)                                  Form and Timing of Payment of Performance Units/Shares.  Payment of earned Performance Units/Shares will be made as soonas practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned PerformanceUnits/Shares in the form of cash, in Shares (which have an aggregate FairMarket 

 

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##  

## Valueequal to the value of the earned Performance Units/Shares at the close of theapplicable Performance Period) or in a combination thereof.

##  

## (f)                                    Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested PerformanceUnits/Shares will be forfeited to the Company, and again will be available forgrant under the 2007 Plan.

 

# 11.                                 Performance Goals.  The granting and/or vesting ofAwards of Restricted Stock, Restricted Stock Units, Performance Shares andPerformance Units and other incentives under the 2007 Plan may be made subjectto the attainment of performance goals relating to one or more businesscriteria within the meaning of Section 162(m) of the Code and mayprovide for a targeted level or levels of achievement (“Performance Goals”). Performance Goals may fall within one or more of the following categories:

##  

## (a)                                  Financial Measures.  Cash flow;cash position; earnings before interest and taxes; earnings before interest,taxes, depreciation and amortization; earnings per Share; economic profit;economic value added; equity or stockholder’s equity; market share; net income;net profit; net sales; operating earnings; operating income; profit before tax;ratio of debt to debt plus equity; ratio of operating earnings to capitalspending; sales growth; return on net assets; or total return to stockholders.

##  

## (b)                                 Sales and Marketing Measures. Number and/or type of design wins, unit, revenue or gross margin/gross profitgoals by market or by customer.

##  

## (c)                                  Research and Development Goals. Achievement of specific product design, specification or performance targets.

##  

## (d)                                 Production goals.  Achievementof specific unit, yield or cost reduction targets.

##  

## (e)                                  Hiring Goals.  Recruiting ofspecified personnel with valuable skills and/or experience.

 

Any Performance Goals maybe used to measure the performance of the Company as a whole or one part of theCompany’s business and may be measured relative to a peer group or to an index.The Performance Goals may differ from Participant to Participant and from Awardto Award.  Prior to the Determination Date, the Administrator willdetermine whether any significant element(s) will be included in orexcluded from the calculation of any Performance Goal with respect to anyParticipant.  In all other respects, Performance Goals will be calculatedin accordance with the Company’s financial statements, generally acceptedaccounting principles, or under a methodology established by the Administratorprior to the issuance of an Award.

#  

# 12.                                 Leaves of Absence.  Unless theAdministrator provides otherwise, vesting of Awards granted hereunder will besuspended during any unpaid leave of absence.  A Service Provider will notcease to be an Employee in the case of (i) any leave of absence approvedby the Company or (ii) transfers between locations of the Company orbetween the Company, its Parent, or any Subsidiary.  For purposes ofIncentive Stock Options, no such leave may exceed ninety (90) days, unlessreemployment upon expiration of such leave is guaranteed by statute orcontract.  If 

 

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#  

# reemploymentupon expiration of a leave of absence approved by the Company is not soguaranteed, then three (3) months following the 91st day of such leave, anyIncentive Stock Option held by the Participant will cease to be treated as anIncentive Stock Option and will be treated for tax purposes as a NonstatutoryStock Option.

#  

# 13.                                 Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be sold,pledged, assigned, hypothecated, transferred, or disposed of in any mannerother than by will or by the laws of descent or distribution and may beexercised, during the lifetime of the Participant, only by theParticipant.  If the Administrator makes an Award transferable, such Awardwill contain such additional terms and conditions as the Administrator deemsappropriate.

#  

# 14.                                 Adjustments; Dissolution or Liquidation; Merger or Change in Control.

##  

## (a)                                  Adjustments.  In the event that anydividend or other distribution (whether in the form of cash, Shares, othersecurities, or other property), recapitalization, stock split, reverse stocksplit, reorganization, merger, consolidation, split-up, spin-off, combination,repurchase, or exchange of Shares or other securities of the Company, or otherchange in the corporate structure of the Company affecting the Shares occurs,the Administrator, in order to prevent diminution or enlargement of thebenefits or potential benefits intended to be made available under the 2007Plan, shall adjust the number and class of Shares that may be delivered underthe 2007 Plan and/or the number, class, and price of Shares covered by eachoutstanding Award, and the numerical Share limits set forth in Sections 3,6, 7, 8, 9 and 10.

##  

## (b)                                 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, theAdministrator will notify each Participant as soon as practicable prior to theeffective date of such proposed transaction.  To the extent it has notbeen previously exercised, an Award will terminate immediately prior to theconsummation of such proposed action.

##  

## (c)                                  Change in Control.  In theevent of a Change in Control, each outstanding Award will be assumed or anequivalent option or right substituted by the successor corporation or a Parentor Subsidiary of the successor corporation (the “Successor Corporation”). In the event that the Successor Corporation refuses to assume or substitute forthe Award, the Participant will fully vest in and have the right to exerciseall of his or her outstanding Options and Stock Appreciation Rights, includingShares as to which such Awards would not otherwise be vested or exercisable,all restrictions on Restricted Stock will lapse, and, with respect toRestricted Stock Units, Performance Shares and Performance Units, allPerformance Goals or other vesting criteria will be deemed achieved at targetlevels and all other terms and conditions met.  In addition, if an Optionor Stock Appreciation Right is not assumed or substituted for in the event of aChange in Control, the Administrator will notify the Participant in writing orelectronically that the Option or Stock Appreciation Right will be fully vestedand exercisable for a period of time determined by the Administrator in itssole discretion, and the Option or Stock Appreciation Right will terminate uponthe expiration of such period.

 

With respect to Awardsgranted to Outside Directors that are assumed or substituted for, if on thedate of or following such assumption or substitution the Participant’s statusas a Director or a director of the Successor Corporation, as applicable, isterminated other than upon a voluntary resignation by the Participant, then theParticipant will fully vest in and have the right to exercise Options and/orStock Appreciation Rights as to all of the Shares subject thereto, including 

 

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Shares as to which suchAwards would not otherwise be vested or exercisable, all restrictions onRestricted Stock will lapse, and, with respect to Restricted Stock Units,Performance Shares and Performance Units, all Performance Goals or othervesting criteria will be deemed achieved at target levels and all other termsand conditions met.

 

For the purposes of thissubsection (c), an Award will be considered assumed if, following the Change inControl, the Award confers the right to purchase or receive, for each Sharesubject to the Award immediately prior to the Change in Control, theconsideration (whether stock, cash, or other securities or property) or, in thecase of a Stock Appreciation Right upon the exercise of which the Administratordetermines to pay cash or a Performance Share or Performance Unit which theAdministrator can determine to pay in cash, the fair market value of theconsideration received in the merger or Change in Control by holders of CommonStock for each Share held on the effective date of the transaction (and ifholders were offered a choice of consideration, the type of considerationchosen by the holders of a majority of the outstanding Shares); provided,however, that if such consideration received in the Change in Control is notsolely common stock of the Successor Corporation, the Administrator may, withthe consent of the Successor Corporation, provide for the consideration to bereceived upon the exercise of an Option or Stock Appreciation Right or upon thepayout of a Performance Share or Performance Unit, for each Share subject tosuch Award (or in the case of Performance Units, the number of implied sharesdetermined by dividing the value of the Performance Units by the per shareconsideration received by holders of Common Stock in the Change in Control), tobe solely common stock of the Successor Corporation equal in fair market valueto the per share consideration received by holders of Common Stock in theChange in Control.

 

Notwithstanding anythingin this Section 14(c) to the contrary, an Award that vests, is earnedor paid-out upon the satisfaction of one or more Performance Goals will not beconsidered assumed if the Company or its successor modifies any of suchPerformance Goals without the Participant’s consent; provided, however, amodification to such Performance Goals only to reflect the SuccessorCorporation’s post-Change in Control corporate structure will not be deemed toinvalidate an otherwise valid Award assumption.

 

# 15.                                 Tax Withholding

##  

## (a)                                  Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercisethereof), the Company will have the power and the right to deduct or withhold,or require a Participant to remit to the Company, an amount sufficient tosatisfy federal, state, local, foreign or other taxes (including theParticipant’s FICA obligation) required to be withheld with respect to suchAward (or exercise thereof).

##  

## (b)                                 Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as itmay specify from time to time, may permit a Participant to satisfy such taxwithholding obligation, in whole or in part by (without limitation) (a) payingcash, (b) electing to have the Company withhold otherwise deliverable cashor Shares having a Fair Market Value equal to the amount required to bewithheld, (c) delivering to the Company already-owned Shares having a FairMarket Value equal to the amount required to be withheld, or (d) selling asufficient number of Shares otherwise deliverable to the Participant throughsuch means as the Administrator may determine in its sole discretion (whetherthrough a broker or otherwise) equal to the amount required to bewithheld.  The amount of the withholding requirement will be deemed to 

 

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##  

## includeany amount which the Administrator agrees may be withheld at the time theelection is made, not to exceed the amount determined by using the maximumfederal, state or local marginal income tax rates applicable to the Participantwith respect to the Award on the date that the amount of tax to be withheld isto be determined.  The Fair Market Value of the Shares to be withheld ordelivered will be determined as of the date that the taxes are required to bewithheld.

#  

# 16.                                 No Effect on Employment or Service.  Neither the 2007 Plan nor anyAward will confer upon a Participant any right with respect to continuing theParticipant’s relationship as a Service Provider with the Company, nor willthey interfere in any way with the Participant’s right or the Company’s rightto terminate such relationship at any time, with or without cause, to theextent permitted by Applicable Laws.

#  

# 17.                                 Date of Grant.  The date of grantof an Award will be, for all purposes, the date on which the Administratormakes the determination granting such Award, or such other later date as isdetermined by the Administrator.  Notice of the determination will beprovided to each Participant within a reasonable time after the date of suchgrant.

#  

# 18.                                 Term of 2007 Plan.  Subject to Section 22 of the 2007 Plan, the 2007 Plan will becomeeffective upon its adoption by the Board.  It will continue in effect fora term of ten (10) years unless terminated earlier under Section 19 of the 2007 Plan.

#  

# 19.                                 Amendment and Termination of the 2007 Plan.

##  

## (a)                                  Amendment and Termination. The Administrator may at any time amend, alter, suspend or terminate the 2007Plan.

##  

## (b)                                 Stockholder Approval. The Company will obtain stockholder approval of any 2007 Plan amendment to theextent necessary and desirable to comply with Applicable Laws.

##  

## (c)                                  Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the 2007 Plan willimpair the rights of any Participant, unless mutually agreed otherwise betweenthe Participant and the Administrator, which agreement must be in writing andsigned by the Participant and the Company.  Termination of the 2007 Planwill not affect the Administrator’s ability to exercise the powers granted toit hereunder with respect to Awards granted under the 2007 Plan prior to thedate of such termination.

#  

# 20.                                 Conditions Upon Issuance of Shares.

##  

## (a)                                  Legal Compliance.  Shares willnot be issued pursuant to the exercise of an Award unless the exercise of suchAward and the issuance and delivery of such Shares will comply with ApplicableLaws and will be further subject to the approval of counsel for the Companywith respect to such compliance.

##  

## (b)                                 Investment Representations. As a condition to the exercise of an Award, the Company may require the personexercising such Award to represent and warrant at the time of any such exercisethat the Shares are being purchased only for investment and without any presentintention to sell or distribute such Shares if, in the opinion of counsel forthe Company, such a representation is required.

 

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#  

# 21.                                 Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory bodyhaving jurisdiction, which authority is deemed by the Company’s counsel to benecessary to the lawful issuance and sale of any Shares hereunder, will relievethe Company of any liability in respect of the failure to issue or sell suchShares as to which such requisite authority will not have been obtained.

#  

# 22.                                 Stockholder Approval. The 2007 Plan will be subject to approval by the stockholders of the Companywithin twelve (12) months after the date the 2007 Plan is adopted.  Suchstockholder approval will be obtained in the manner and to the degree requiredunder Applicable Laws.

 

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