EXHIBIT 10.12


 


MICROCHIP TECHNOLOGY INCORPORATED


INTERNATIONAL EMPLOYEE STOCK
PURCHASE PLAN


AS AMENDED THROUGH MAY 1, 2006


 


I.                                         PURPOSE


 


This International
Employee Stock Purchase Plan (“Plan”) is hereby established by Microchip
Technology Incorporated, a Delaware corporation (“Microchip”), in order to
provide eligible employees of foreign Microchip subsidiaries with the
opportunity to acquire a proprietary interest in Microchip through the purchase
of shares of Microchip common stock at periodic intervals with their
accumulated payroll deductions.


 


II.                                     DEFINITIONS


 


For purposes of
administration of the Plan, the following terms shall have the meanings
indicated:


 


Common Stock
means shares of Microchip common stock, par value $0.001 per share.


 


Earnings
means regular base salary plus such additional items of compensation as the
Plan Administrator may deem appropriate.


 


Effective Date
means June 1, 1994. A list of the participating Foreign Subsidiaries is
hereto attached as Schedule A. For any other Foreign Subsidiary, the
effective date shall be determined by the Microchip Board of Directors or the
Employee Committee of the Board of Directors prior to the time such Foreign
Subsidiary is to become a participating company in the Plan.


 


Eligible Employee
means any person who is engaged, on a regularly scheduled basis, in the
rendition of personal services outside the U.S. as an employee of a Foreign
Subsidiary subject to the control and direction of that Foreign Subsidiary as
to both the work to be performed and the manner and method of performance.


 


Foreign Subsidiary
means any non-U.S. Microchip subsidiary which elects, with the approval of the
Microchip Board of Directors or the Employee Committee of the Board of
Directors, to extend the benefits of this Plan to its Eligible Employees. The
Foreign Subsidiaries participating in the Plan are listed on attached Schedule A.


 


Participant
means any Eligible Employee of a Foreign Subsidiary who is actively
participating in the Plan.


 


Service
means the period during which an individual performs services as an Eligible
Employee and shall be measured from his or her hire date, whether that date is
before or after the Effective Date of the Plan.


 

















 


III.                                 ADMINISTRATION


 


Each Foreign Subsidiary
shall have responsibility for the administration of the Plan with respect to
its Eligible Employees. Accordingly, the Plan shall, as to each Foreign
Subsidiary, be separately administered by a plan administrator comprised of two
or more Members of the Board of Directors, the Employee Committee of the Board
of Directors, or a designee as may be appointed by either of them from
time to time (“Plan Administrator”). The Plan Administrator shall have full
authority to administer the Plan, including authority to interpret and construe
any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary. Decisions of the Plan
Administrator shall be subject to ratification by the Microchip Board of
Directors and, when so ratified, shall be final and binding on all parties who
have an interest in the Plan.


 


IV.                                PURCHASE
PERIODS


 


A.                                   Shares
of Common Stock shall be offered for purchase under the Plan through a series of
successive purchase periods until such time as (i) the maximum number of
shares of Common Stock available for issuance under the Plan shall have been
purchased or (ii) the Plan shall have been sooner terminated in accordance
with Article VIII.


 


B.                                     The
Plan shall be implemented in a series of successive purchase periods, each
to be of a duration of six (6) months. The initial purchase period will
begin on June 1, 1994 and end on the last U.S. business day in November 1994.
Subsequent purchase periods shall, for so long as the Plan remains in
existence, run from the first U.S. business day of December to the last
U.S. business day of May and from the first U.S. business day of June to
the last U.S. business day of November.


 


C.                                     No
purchase period shall commence under the Plan, nor shall any shares of Common
Stock be issued hereunder, until such time as (i) the Plan shall have been
approved by the Microchip Board of Directors and (ii) Microchip shall have
complied with all applicable requirements of the Securities Act of 1933 (as
amended), all applicable listing requirements of any securities exchange on
which shares of the Common Stock are listed and all other applicable statutory
and regulatory requirements.


 


D.                                    The
Participant shall be granted a separate purchase right for each purchase period
in which he/she participates. The purchase right shall be granted on the start
date of the purchase period and shall be automatically exercised on the last
U.S. business day of that purchase period.


 


E.                                      The
acquisition of Common Stock through plan participation for any purchase period
shall neither limit nor require the acquisition of Common Stock by the
Participant in any subsequent purchase period.


 


V.                                    ELIGIBILITY
AND PARTICIPATION


 


A.                                   Each
Eligible Employee of each Foreign Subsidiary participating in the Plan may join
the Plan in accordance with the following provisions:


 


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•                                          An individual
who is an Eligible Employee with at least thirty (30) days of Service prior to
the start date of the purchase period may enter that purchase period on
such start date, provided he/she enrolls in the purchase period on or before
such date in accordance with Section V.B below. Should any such Eligible
Employee not enter the purchase period on the start date, then he/she may not
subsequently join that particular purchase period on any later date.


 


•                                          An individual
who is an Eligible Employee with less than thirty (30) days of Service on the
start date of the purchase period may not participate in that purchase
period but will be eligible to join the Plan on the start date of the first
purchase period thereafter on which he/she is an Eligible Employee with at
least thirty (30) days of Service.


 


B.                                     To
participate for a particular purchase period, the Eligible Employee must
complete the enrollment forms prescribed by the Plan Administrator (including a
purchase agreement and a payroll deduction authorization) and file such forms
with the Plan Administrator (or its designate) on or before the start date of
that purchase period.


 


C.                                     The
payroll deduction authorized by the Participant shall be collected under the
Plan in the currency in which paid by the Foreign Subsidiary and may be
any multiple of one percent (1%) of the Earnings paid to the Participant during
each purchase period, up to a maximum of ten percent (10%). Any changes or
fluctuations in the exchange rate at which the currency collected from the
Participant through such payroll deductions is converted into U.S. Dollars on
each purchase date under the Plan shall be borne solely by the Participant. The
deduction rate so authorized shall continue in effect for the entire purchase
period and for each successive purchase period, except to the extent such rate
is changed in accordance with the following guidelines:


 


•                                          The
Participant may, at any time during the purchase period, reduce his/her rate of
payroll deduction. Such reduction shall become effective as soon as possible
after filing of the requisite reduction form with the Plan Administrator
(or its designate), but the Participant may not effect more than one such
reduction during the same purchase period.


 


•                                          The
Participant may, prior to the start date of any subsequent purchase period,
increase or decrease the rate of his/her payroll deduction by filing the
appropriate form with the Plan Administrator (or its designate). The new
rate (which may not exceed the ten percent (10%) maximum) shall become
effective as of the start date of the new six (6)-month purchase period.


 


Payroll deductions
will automatically cease upon the termination of the Participant’s purchase
right in accordance with the applicable provisions of Section VII below.


 


VI.                                STOCK
SUBJECT TO PLAN


 


A.                                   The
Common Stock purchasable under the Plan shall, solely in the discretion of the
Microchip Board, be made available from authorized but unissued shares of Common
Stock or from shares of Common Stock reacquired by Microchip, including shares
of Common Stock purchased on the open


 


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market. The total number
of shares reserved under the Plan is 348,593(1) shares plus beginning January 1,
2006, and each January 1 thereafter during the term of the Plan, an
automatic annual increase in shares reserved of one tenth of one percent
(0.1%)of the then outstanding shares of Microchip Common Stock. The total
number of shares which may be issued under the Plan shall not exceed the
number reserved.


 


B.                                     In
the event any change is made to the outstanding Common Stock by reason of any
stock dividend, stock split, combination of shares or other change affecting
such outstanding Common Stock as a class without Microchip’s receipt of
consideration, appropriate adjustments shall be made by the Microchip Board of
Directors to (i) the class and maximum number of securities issuable
over the term of the Plan, (ii) the class and maximum number of
securities purchasable per Participant during any one purchase period and (iii) the
class and number of securities and the price per share in effect under
each purchase right at the time outstanding under the Plan. Such adjustments
shall be designed to preclude the dilution or enlargement of rights and
benefits under the Plan.


 


VII.                            PURCHASE
RIGHTS


 


An Eligible Employee who
participates in the Plan for a particular purchase period shall have the right
to purchase shares of Common Stock upon the terms and conditions set forth
below and shall execute a purchase agreement incorporating such terms and
conditions and such other provisions (not inconsistent with the Plan) as the
Plan Administrator may deem advisable.


 


Purchase Price.
Common Stock shall be issuable at the end of each purchase period at a purchase
price equal to eighty-five percent (85%) of the lower of (i) the
fair market value per share on the start date of that purchase period or (ii) the
fair market value per share on the last U.S. business day of that purchase
period.


 


Valuation.
The fair market value per share of Common Stock on any relevant date under the
Plan shall be the closing selling price per share of Common Stock on that date,
as officially quoted on the Nasdaq National Market. If there is no quoted
selling price for such date, then the closing selling price per share of Common
Stock on the next preceding day for which there does exist such a quotation
shall be determinative of fair market value.


 


Number of Purchasable
Shares. The number of shares purchasable per Participant
during each purchase period shall be determined as follows:  first, the payroll deductions in the currency
in which collected from the Participant during that purchase period shall be
converted into U.S. Dollars on the last U.S. business day of the purchase
period at the exchange rate in effect on that day; then, the U.S. Dollar amount
calculated for the Participant on the basis of such exchange rate shall be
divided by the purchase price in effect for such period to determine the number
of whole shares of Common Stock purchasable on


 






(1)          Adjusted to reflect: (i) the
three-for-two stock split of the outstanding Common Stock effected in November 1994;
(ii) the three-for-two stock split of the outstanding Common Stock
effected in January 1997, (iii) the 10,000 share increase authorized
by the Board of Directors on April 25 1997, (iv) the three-for-two
stock split of the outstanding Common Stock effected in January 2000, (v) the
three-for-two stock split of the outstanding Common Stock effected in September 2000,
(vi) the three-for-two stock split of the outstanding Common Stock
effected in May 2002 (vii) the 25,000 share increase authorized by
the Board of Directors on March 3, 2003 and (viii) the 100,000 share
increase authorized by the Board of Directors on August 20, 2004.


 


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the Participant’s behalf
for that purchase period. However, no Participant may, during any one purchase
period, purchase more one thousand eight hundred ninety-nine (1,899) shares of
Common Stock.


 


Payment.
Payment for the Common Stock purchased under the Plan shall be effected by
means of the Participant’s authorized payroll deductions in the currency in
which paid by the Foreign Subsidiary. Such deductions shall begin with the
first full payroll period beginning with or immediately following the start
date of the purchase period and shall (unless sooner terminated by the
Participant) continue through the pay day ending with or immediately prior to
the last day of such purchase period. The amounts so collected shall be
credited to the Participant’s book account under the Plan, but no interest
shall be paid on the balance from time to time outstanding in such account. The
amounts collected from a Participant may be commingled with the general
assets of the Foreign Subsidiary or Microchip and may be used for general
corporate purposes. However, all purchases of Common Stock under the Plan shall
be made in U.S. Dollars on the basis of the exchange rate in effect on the last
day of each purchase period.


 


Termination of Purchase
Right. The following provisions shall govern the termination
of outstanding purchase rights:


 


•                                          A Participant
may, at any time prior to the last seven (7) business days of the Foreign
Subsidiary falling within the purchase period, terminate his/her outstanding
purchase right by filing the prescribed notification form with the Plan
Administrator. No further payroll deductions shall be collected from the
Participant with respect to the terminated purchase right, and any payroll
deductions collected for the purchase period in which such termination occurs
shall, at the Participant’s election, be immediately refunded in the currency
in which paid by the Foreign Subsidiary or held for the purchase of shares at
the end of such purchase period. If no such election is made at the time the
termination notice is filed, then the Participant’s payroll deductions shall be
refunded as soon as possible after the termination date of his/her purchase
right.


 


•                                          The
termination of such purchase right shall be irrevocable, and the Participant may not
subsequently rejoin the purchase period for which the terminated purchase right
was granted. In order to resume participation in any subsequent purchase period,
such individual must re-enroll in the Plan (by making a timely filing of a new
purchase agreement and payroll deduction authorization) on or before the date
he/she is first eligible to join the new purchase period.


 


•                                          If the
Participant ceases to remain an Eligible Employee while his/her purchase right
is outstanding, then such purchase right shall immediately terminate, and the
payroll deductions collected from such Participant for the purchase period
shall be promptly refunded in the currency in which paid by the Foreign
Subsidiary to the Participant. However, should the Participant’s cessation of
Eligible Employee status occur by reason of death or permanent disability, then
such individual (or the personal representative of a deceased Participant)
shall have the following election, exercisable up until the last day of the
purchase period:


 


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•                                          to withdraw
all of the Participant’s payroll deductions for such purchase period, in the
currency in which paid by the Foreign Subsidiary, or


 


•                                          to have such
funds held for the purchase of shares at the end of the purchase period.


 


If no such
election is made, then such funds shall be refunded as soon as possible after
the end of the purchase period. In no event, however, may any payroll
deductions be made on the Participant’s behalf following his/her cessation of
Eligible Employee status.


 


Stock Purchase.
Shares of Common Stock shall automatically be purchased on behalf of each
Participant (other than Participants whose payroll deductions have previously
been refunded in accordance with the Termination of Purchase Right provisions
above) on the last U.S. business day of each purchase period. The purchase
shall be effected as follows: first, each Participant’s payroll deductions for
that purchase period (together with any carryover deductions from the preceding
purchase period) shall be converted from the currency in which paid by the
Foreign Subsidiary into U.S. Dollars at the exchange rate in effect on the purchase
date, and then the amount of U.S. Dollars calculated for each Participant on
the basis of such exchange rate shall be applied to the purchase of whole
shares of Common Stock (subject to the limitation on the maximum number of
purchasable shares set forth above) at the purchase price in effect for such
purchase period. Any payroll deductions not applied to such purchase because
they are not sufficient to purchase a whole share shall be held for the
purchase of Common Stock in the next purchase period. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant
during the purchase period shall be promptly refunded to the Participant in the
currency in which paid by the Foreign Subsidiary.


 


Proration of Purchase
Rights. Should the total number of shares of Common Stock
which are to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded to such Participant in the currency in which paid by the Foreign
Subsidiary.


 


Rights as Stockholder.
A Participant shall have no stockholder rights with respect to the shares
subject to his/her outstanding purchase right until the shares are actually
purchased on the Participant’s behalf in accordance with the applicable
provisions of the Plan. No adjustments shall be made for dividends,
distributions or other rights for which the record date is prior to the date of
such purchase.


 


A Participant shall be
entitled to receive, as soon as practicable after the end of each purchase
period, a stock certificate (as evidenced by the appropriate entry on the books
of Microchip or of a duly authorized transfer agent of Microchip) for the
number of shares purchased on the Participant’s behalf. Such certificate will
be issued in “street name” for immediate deposit in a designated brokerage
account. Until the stock certificate evidencing such Shares is issued no right
to vote or receive dividends or any other rights as a stockholder shall exist.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued.


 


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Assignability.
No purchase right granted under the Plan shall be assignable or transferable by
the Participant other than by will or by the laws of descent and distribution
following the Participant’s death, and during the Participant’s lifetime the
purchase right shall be exercisable only by the Participant.


 


Change in Ownership.
Should any of the following transactions (a “Corporate Transaction”) occur
during the purchase period:


 


(i)                                     a
merger or other reorganization in which Microchip will not be the surviving
corporation (other than a reorganization effected primarily to change the State
in which Microchip is incorporated), or


 


(ii)                                  a
sale of all or substantially all of Microchip’s assets in liquidation or
dissolution of Microchip, or


 


(iii)                               a
reverse merger in which Microchip is the surviving corporation but in which
more than 50% of Microchip’s outstanding voting stock is transferred to person
or persons different from those who held the stock immediately prior to such
merger,


 


then all outstanding
purchase rights under the Plan shall automatically be exercised immediately
prior to the effective date of such Corporate Transaction by applying the
payroll deductions of each Participant for the purchase period in which such Corporate
Transaction occurs to the purchase of whole shares of Common Stock at
eighty-five percent (85%) of the lower of (i) the fair market value
of the Common Stock on the start date of the purchase period in which such
Corporate Transaction occurs or (ii) the fair market value of the Common
Stock immediately prior to the effective date of such Corporate Transaction. Payroll
deductions shall be converted from the currency in which paid by the Foreign
Subsidiary into U.S. Dollars on the basis of the exchange rate in effect on the
purchase date, and the applicable share limitation of Article VII shall
continue to apply to each such purchase. Should Microchip sell or otherwise
dispose of its ownership interest in any Foreign Subsidiary participating in
the Plan, whether through merger or sale of all or substantially all of the
assets or outstanding capital stock of that Foreign Subsidiary, then a similar
exercise of outstanding purchase rights shall be effected immediately prior to
the effective date of such disposition, but only to the extent those purchase
rights are attributable to the employees of such Foreign Subsidiary.


 


Microchip shall use its
best efforts to provide at least ten (10)-days advance written notice of the
occurrence of any such Corporate Transaction, and the Participants shall,
following the receipt of such notice, have the right to terminate their
outstanding purchase rights in accordance with the applicable provisions of
this Article VII.


 


VIII.                        AMENDMENT
AND TERMINATION


 


The Plan has been established
voluntarily by Microchip. The Microchip Board of Directors may alter,
amend, suspend or discontinue the Plan with respect to one or more Foreign
Subsidiaries following the end of any purchase period. The Microchip Board may also
terminate the Plan in its entirety immediately following the end of any
purchase period. In such event, no further purchase rights shall


 


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thereafter be granted or
exercised, and no further payroll deductions shall thereafter be collected,
under the Plan.


 


IX.                                GENERAL
PROVISIONS


 


A.                                   The
Plan shall become effective on the designated effective date for each Foreign
Subsidiary, provided Microchip shall have complied with all applicable
requirements of the Securities Act of 1933 (as amended), all applicable listing
requirements of any securities exchange on which shares of the Common Stock are
listed and all other applicable requirements established by law or regulation.


 


B.                                     The
Plan shall terminate upon the earlier of (i) the last U.S. business
day in November 2014 or (ii) the date on which all shares available
for issuance under the Plan shall have been sold pursuant to purchase rights
exercised under the Plan.


 


C.                                     All
costs and expenses incurred in the administration of the Plan shall be paid by
the Foreign Subsidiary.


 


D.                                    Neither
the action of Microchip or the Foreign Subsidiary in establishing the Plan, nor
any action taken under the Plan by the Microchip Board or the Plan
Administrator, nor any provision of the Plan itself shall constitute any form of
employment contract, be construed so as to grant any person the right to remain
in the employ of the Foreign Subsidiary for any period of specific duration,
and except where expressly prohibited by applicable law such person’s employment
may be terminated at any time, with or without cause.


 


E.                                      Participation
in the Plan is voluntary and occasional and does not create any contractual or
other right to participate in the Plan in the future, or benefits in lieu of
participation in the Plan, even if the Participant has continually participated
in the Plan in the past.


 


F.                                      Participation
in the Plan does not constitute normal or expected salary or compensation for
any purposes, including but not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments, bonuses, long-term service
awards, pension or retirement benefits or similar payments and in no event
should be considered as compensation for, or relating in any way to past
services for Microchip or the Foreign Subsidiary.


 


G.                                   Microchip,
Foreign Subsidiaries and the Plan Administrator must collect, use, and transfer
personal data of Participants as described in this subsection in order to
administer the Plan. By participating in the Plan, the Participant is
consenting to the collection, transfer and use of Personal data as generally
described in this subsection.


 


(i)                                     Microchip
and its Foreign Subsidiaries hold certain personal information about the
Participant, including, but not limited to, name, home address and telephone
number, date of birth, social insurance number, salary, nationality, job title,
any Shares of Common Stock or directorships held in Microchip, details of all
participation in the Plan or other entitlement to Shares, for the purpose of
managing and administering the Plan (“Data”).


 


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(ii)                                  Microchip
and/or its Foreign Subsidiaries will transfer Data among themselves as
necessary for the purposes of implementation, administration, and management of
Participant’s participation in the Plan, and that Microchip and/or its Foreign
Subsidiaries may each further transfer Data to any third parties assisting
the them in the implementation, administration, and management of the Plan (“Data
Recipients”).


 


(iii)                               These
Data Recipients may be located in Participant’s country of residence or
elsewhere, such as the United States. By participating under this Plan, the
Participant authorizes the Data Recipients to receive, possess, use, retain,
and transfer Data in electronic or other form, for the purposes of
implementing, administering, and managing Participant’s participation in the
Plan, including any transfer of such Data, as may be required for Plan
administration and/or the subsequent holding of Shares on Participant’s behalf,
to a broker or third party with whom the Shares acquired on purchase may be
deposited.


 


(iv)                              Participant
may, at any time, review the Data, request that any necessary amendments be
made to it, or withdraw Participant’s consent herein in writing by contacting
Microchip. Withdrawing consent may affect Participant’s ability to
participate in the Plan.


 


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SCHEDULE A


 


LIST OF
FOREIGN SUBSIDIARIES


PARTICIPATING
IN THE


INTERNATIONAL
EMPLOYEE STOCK PURCHASE PLAN


AS OF MAY 1,
2006


 


Australia - Microchip
Technology Australia PTY Ltd.


 


Austria -
Microchip Technology Austria GmbH


 


Canada -
Microchip Technology Canada Inc. and Microchip Technology Canada


 


Denmark -
Microchip Technology Nordic ApS (Denmark)


 


France -
Microchip Technology Sarl


 


Germany -
Microchip Technology GmbH


 


Hong Kong -
Microchip Technology Hong Kong Ltd.


 


India -
Microchip Technology Designs (India) Private Limited


 


Ireland -
Microchip Technology Ireland Limited


 


Italy -
Microchip Technology SRL


 


Japan -
Microchip Technology Japan K.K.


 


Korea -
Microchip Technology Korea Ltd.


 


Malaysia -
Arizona Microchip Technology (Malaysia) Sdn Bhd


 


Mexico -
Microchip Technology Mexico, S.DE R.L. DE C.V.


 


Netherlands
- Microchip Technology (Netherlands) Europe B.V.


 


Philippines
- Microchip Technology (Philippines) Corporation


 


Romania - Microchip Technology SRL


 


Singapore -
Microchip Technology Singapore Pte Ltd.


 

















 


Spain –
Microchip Technology S.L.


 


Switzerland
- Microchip Technology Switzerland S.A.


 


Taiwan -
Microchip Technology (Barbados) Inc. – Taiwan Branch


 


Thailand –
Arizona Microchip Technology (Thailand) Ltd.


 


United Kingdom
- Microchip Limited


 


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