Document:

Exhibit

Exhibit 4.4(c)

SOUTHERN POWER COMPANY

TO

WELLS FARGO BANK, NATIONAL ASSOCIATION,
TRUSTEE

SIXTEENTH SUPPLEMENTAL INDENTURE

DATED AS OF NOVEMBER 16, 2016

SERIES 2016F 4.950% SENIOR NOTES

DUE DECEMBER 15, 2046

TABLE OF CONTENTS1 

	
				
	 
	PAGE
	 

	ARTICLE 1
	Series 2016F Senior Notes
	1
	

	 
	 
	 

	SECTION 101.
	Establishment
	1
	

	SECTION 102.
	Definitions
	2
	

	SECTION 103.
	Payment of Principal and Interest
	3
	

	SECTION 104.
	Denominations
	4
	

	SECTION 105.
	Global Securities
	4
	

	SECTION 106.
	Transfer
	5
	

	SECTION 107.
	Redemption at the Company’s Option
	5
	

	 
	 
	 

	ARTICLE 2
	Miscellaneous Provisions
	5
	

	 
	 
	 

	SECTION 201.
	Recitals by Company
	5
	

	SECTION 202.
	Ratification and Incorporation of Original Indenture
	6
	

	SECTION 203.
	Executed in Counterparts
	6
	

	 
	 
	 

	EXHIBIT A
	Form of Series 2016F Note
	A-1
	

	 
	 
	 

	EXHIBIT B
	Certificate of Authentication
	B-1
	

______________________
1 This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.

i

THIS SIXTEENTH SUPPLEMENTAL INDENTURE is made as of the 16th day of November, 2016, by and between SOUTHERN POWER COMPANY, a corporation duly organized and existing under the laws of the state of Delaware having its principal place of business at 30 Ivan Allen Jr. Boulevard, N.W., Atlanta, Georgia 30308 (the “Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, 150 East 42nd Street, 40th Floor, New York, New York 10017 (the “Trustee”).
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a Senior Note Indenture, dated as of June 1, 2002 (the “Original Indenture”), with Wells Fargo Bank, National Association (as successor to The Bank of New York Mellon (formerly known as The Bank of New York)), as heretofore supplemented;
WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as further supplemented by this Sixteenth Supplemental Indenture, is herein called the “Indenture”;
WHEREAS, under the Original Indenture, a new series of unsecured senior debentures or notes or other evidence of indebtedness (the “Senior Notes”) may at any time be established by the Board of Directors of the Company in accordance with the provisions of the Original Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a new series of Senior Notes;
WHEREAS, additional Senior Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of this Sixteenth Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series 2016F Senior Notes
SECTION 101.  Establishment.  There is hereby established a new series of Senior Notes to be issued under the Indenture, to be designated as the Company’s Series 2016F 4.950% Senior Notes due December 15, 2046 (the “Series 2016F Notes”).

There are to be authenticated and delivered $400,000,000 principal amount of Series 2016F Notes, and such principal amount of the Series 2016F Notes may be increased from time to time pursuant to Section 301 of the Original Indenture.  All Series 2016F Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for issuances of additional Series 2016F Notes.  Any such additional Series 2016F Notes will have the same interest rate, maturity and other terms as those initially issued (except for the public offering price and issue date and the initial interest accrual date and initial Interest Payment Date (as defined below), if applicable).  No Series 2016F Notes shall be authenticated and delivered in excess of the principal amount as so increased except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture.  The Series 2016F Notes shall be issued in fully registered form.
The Series 2016F Notes shall be issued in the form of one or more Global Securities in substantially the form set out in Exhibit A hereto.  The Depositary with respect to the Series 2016F Notes shall be The Depository Trust Company.
The form of the Trustee’s Certificate of Authentication for the Series 2016F Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series 2016F Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.
The Series 2016F Notes will not have a sinking fund.
SECTION 102.  Definitions. The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below.  Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Series 2016F Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Series 2016F Notes.
“Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
“Independent Investment Banker” means an independent investment banking institution of national standing appointed by the Company.
“Interest Payment Dates” means June 15 and December 15 of each year, commencing June 15, 2017.
“Original Issue Date” means November 16, 2016.

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“Reference Treasury Dealer” means a primary U.S. Government securities dealer in the United States appointed by the Company.
“Reference Treasury Dealer Quotation” means, with respect to a Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount and quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day in New York City preceding such Redemption Date).
“Regular Record Date” means, with respect to each Interest Payment Date, the 15th calendar day preceding such Interest Payment Date (whether or not a Business Day).
“Stated Maturity” means December 15, 2046.
“Treasury Yield” means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
SECTION 103.  Payment of Principal and Interest.  The principal of the Series 2016F Notes shall be due at Stated Maturity (unless earlier redeemed).  The unpaid principal amount of the Series 2016F Notes shall bear interest at the rate of 4.950% per annum until paid or duly provided for.  Interest shall be paid semiannually in arrears on each Interest Payment Date to the Person in whose name the Series 2016F Notes are registered at the close of business on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable.  Any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series 2016F Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Series 2016F Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series 2016F Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture.
Payments of interest on the Series 2016F Notes will include interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for the Series 2016F Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months.  In the event that any date on which interest is payable on the Series 2016F Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.
Payment of the principal and interest due at the Stated Maturity or earlier redemption of the Series 2016F Notes shall be made upon surrender of the Series 2016F Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the Series 2016F Notes shall be paid in such 

3

coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payments of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto.  
SECTION 104.  Denominations.  The Series 2016F Notes may be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
SECTION 105.  Global Securities.  The Series 2016F Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee.  Except under the limited circumstances described below, Series 2016F Notes represented by one or more Global Securities will not be exchangeable for, and will not otherwise be issuable as, Series 2016F Notes in definitive form.  The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series 2016F Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee.  The rights of Holders of such Global Security shall be exercised only through the Depositary.
Subject to the procedures of the Depositary, a Global Security shall be exchangeable for Series 2016F Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company, in each case within 90 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series 2016F Notes.  Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series 2016F Notes registered in such names as the Depositary shall direct.
Neither the Company, the Trustee nor any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

4

SECTION 106.  Transfer.  No service charge will be made for any transfer or exchange of Series 2016F Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.
The Company shall not be required (a) to issue, register the transfer of or exchange any Series 2016F Notes during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice pursuant to Section 1104 of the Original Indenture identifying the serial numbers of the Series 2016F Notes to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to register the transfer of or exchange any Series 2016F Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any Series 2016F Notes redeemed in part.
SECTION 107.  Redemption at the Company’s Option.  At any time and from time to time prior to June 15, 2046, the Series 2016F Notes will be subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days’ notice, at Redemption Prices equal to the greater of (1) 100% of the principal amount of the Series 2016F Notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal of and interest on the Series 2016F Notes being redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted (for purposes of determining present value) to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Yield plus 35 basis points, plus, in each case, accrued interest thereon to the Redemption Date. At any time and from time to time on or after June 15, 2046, the Series 2016F Notes will be subject to redemption at the option of the Company, in whole or in part, upon not less than 15 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2016F Notes being redeemend plus accrued and unpaid interest thereon to the Redemption Date.
In the event of redemption of the Series 2016F Notes in part only, a new Series 2016F Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof.
Notice of redemption shall be given as provided in Section 1104 of the Original Indenture except that any such notice of redemption with respect to a redemption occurring prior to June 15, 2046 shall not specify the Redemption Price but only the manner of calculation thereof.  The Trustee shall not be responsible for the calculation of such Redemption Price.  The Company shall calculate such Redemption Price and promptly notify the Trustee thereof.
Any redemption of less than all of the Series 2016F Notes shall, with respect to the principal thereof, be divisible by $1,000.
ARTICLE 2
Miscellaneous Provisions
SECTION 201.  Recitals by Company.  The recitals in this Sixteenth Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the 

5

Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series 2016F Notes and of this Sixteenth Supplemental Indenture as fully and with like effect as if set forth herein in full.
SECTION 202.  Ratification and Incorporation of Original Indenture.  As heretofore supplemented and as supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture as supplemented by this Sixteenth Supplemental Indenture shall be read, taken and construed as one and the same instrument.
SECTION 203.  Executed in Counterparts.  This Sixteenth Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

6

IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written.
	
						
	ATTEST:

	 
	 
	SOUTHERN POWER COMPANY

	By:
	/s/Elliott L. Spencer
	 
	By:
	/s/William C. Grantham

	 
	Elliott L. Spencer
Comptroller and Corporate Secretary
	 
	 
	William C. Grantham
Senior Vice President, Treasurer and
Chief Financial Officer

	 
	 
	 
	 
	 
	 

	 
	ATTEST:

	 
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

	By:
	/s/Karen Z. Kelly
	 
	By:
	/s/Stefan Victory

	 
	Karen Z. Kelly
Vice President
	 
	 
	Stefan Victory
Vice President

7

EXHIBIT A

FORM OF SERIES 2016F NOTE 

A-1

	
		
	NO. __
	CUSIP NO. 843646 AU4

SOUTHERN POWER COMPANY
SERIES 2016F 4.950% SENIOR NOTE
DUE DECEMBER 15, 2046
	
		
	Principal Amount:
	$________________

	Regular Record Date:
	15th calendar day prior to the applicable Interest Payment Date (whether or not a Business Day)

	Original Issue Date:
	November 16, 2016

	Stated Maturity:
	December 15, 2046

	Interest Payment Dates:
	June 15 and December 15

	Interest Rate:
	4.950% per annum

	Authorized Denominations:
	$2,000 and integral multiples of $1,000 in excess thereof

Southern Power Company, a Delaware corporation (the “Company”, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to ________________________________, or registered assigns, the principal sum of ______________________________________ DOLLARS ($______________) on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on each Interest Payment Date as specified above, commencing on June 15, 2017, and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and at such rate on any overdue principal and on any overdue installment of interest.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the “Note”) is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at the Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.  Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.

A-2

Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months.  In the event that any date on which interest is payable on this Note is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.  A “Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business.
Payment of the principal of and interest due at the Stated Maturity or earlier redemption of the Series 2016F Notes shall be made upon surrender of the Series 2016F Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the Series 2016F Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payment of interest (including interest on an Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

A-3

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
Dated: 
	
				
	 
	 
	SOUTHERN POWER COMPANY

	 
	 
	By:
	 

	 
	 
	Title:

	 
	 
	 
	 

	Attest:
	 
	 
	 

	 
	 
	 
	 

	Title:
	 
	 
	 

{Seal of SOUTHERN POWER COMPANY appears here}

A-4

CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned Indenture.
	
			
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee

	 
	By:
	 

	 
	 
	Authorized Signatory

A-5

(Reverse Side of Note)
This Note is one of a duly authorized issue of Senior Notes of the Company (the “Notes”), issued and issuable in one or more series under a Senior Note Indenture, dated as of June 1, 2002, as supplemented (the “Indenture”), between the Company and Wells Fargo Bank, National Association (as successor to The Bank of New York Mellon (formerly known as The Bank of New York)), as Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered.  This Note is one of the series designated on the face hereof as Series 2016F 4.950% Senior Notes due December 15, 2046 (the “Series 2016F Notes”) which is unlimited in aggregate principal amount.  Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.
At any time and from time to time prior to June 15, 2046, the Series 2016F Notes will be subject to redemption at the option of the Company, in whole or in part upon not less than 30 nor more than 60 days’ notice, at Redemption Prices equal to the greater of (i) 100% of the principal amount of the Series 2016F Notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Series 2016F Notes being redeemed (not including any portion of such payments of interest accrued to the Redemption Date) discounted (for purposes of determining present value) to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Yield plus 35 basis points, plus, in each case, accrued interest thereon to the Redemption Date. At any time and from time to time on or after June 15, 2046, the Series 2016F Notes will be subject to redemption at the option of the Company, in whole or in part, upon not less than 15 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2016F Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.
“Treasury Yield” means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Series 2016F Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Series 2016F Notes.
“Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

A-6

“Independent Investment Banker” means an independent investment banking institution of national standing appointed by the Company.
“Reference Treasury Dealer” means a primary U.S. Government securities dealer in the United States appointed by the Company.
“Reference Treasury Dealer Quotation” means, with respect to a Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount and quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day in New York City preceding such Redemption Date).
The Trustee shall not be responsible for the calculation of the Redemption Price.  The Company shall calculate the Redemption Price and promptly notify the Trustee thereof.
In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof.
The Series 2016F Notes will not have a sinking fund.
If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied 

A-7

by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees.  No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Notes of this series are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company.
This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.

A-8

ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:
	
			
	TEN COM -
	as tenants in
common
	UNIF GIFT MIN ACT- _______ Custodian ________
(Cust)                      (Minor)

	TEN ENT -
	as tenants by the
entireties
	 

	JT TEN -
	as joint tenants
with right of
survivorship and
not as tenants
in common

	under Uniform Gifts to
Minors Act

________________________
(State)

Additional abbreviations may also be used
though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto 
_________________________________________________________________________
(please insert Social Security or other identifying number of assignee)

__________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE
__________________________________________________________________________

__________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and appointing
__________________________________________________________________________
__________________________________________________________________________
agent to transfer said Note on the books of the Company, with full power of substitution in the premises.

	
				
	Dated:
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

NOTICE:  The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.

A-9

EXHIBIT B 
 
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned Indenture.
	
			
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee

	 
	By:
	 

	 
	 
	Authorized Signatory

B-1Exhibit

NOTICE OF GRANT OF PERFORMANCE STOCK UNIT AWARD
UNDER TERMS AND CONDITIONS OF 2008 PERFORMANCE INCENTIVE PLAN

Name of Grantee:                    ______________________________________
Total Target Number of Stock Units Subject to this Grant:    ________________________________
Target Number of EPS Stock Units Subject to this Grant1:          _______________________
Target Number of Revenue Stock Units Subject to this Grant1: ________________________
Date of Grant:                        ______________________________________

This Notice evidences that you have been granted an award of stock units (the “Stock Units”) of Microsemi Corporation (the “Corporation”) as to the “total target” number set forth above.  Between zero percent (0%) and two hundred seventy percent (270%) of the “total target” number of Stock Units will vest and become nonforfeitable in accordance with the performance-based vesting requirements set forth in the Terms (as defined below). 

By your acceptance of the award, you agree that the award of Stock Units is granted under and governed by the terms and conditions of the Corporation's 2008 Performance Incentive Plan (as amended from time to time, the “Plan”) and the Terms and Conditions of Performance Stock Unit Award (the “Terms”), which are attached and incorporated herein by this reference.  This Notice of Grant of Performance Stock Unit Award, together with the Terms, is referred to as the “Agreement” applicable to your award.  The award has been granted to you in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to you.  Capitalized terms are defined in the Plan if not defined herein or in the Terms.  The Plan, the Terms, the Prospectus for the Plan and Prospectus Supplement with respect to Stock Unit awards under the Plan are available by calling the Corporation at (949) 380-6100.

By accepting this award, you agree to execute any documents and take such further actions that the Corporation may reasonably request in order to establish and/or maintain a brokerage account to hold the shares subject to this grant.  You also agree that your default election to settle your tax withholding obligation is to have the Corporation withhold a portion of the shares covered by this award as provided in Section 9 of the Terms.  You may change your default election during any period that you are not in blackout by notifying the Corporation and making alternative arrangements acceptable to the Corporation to provide for tax withholding as described in Section 9.

MICROSEMI CORPORATION    ACCEPTED AND AGREED BY GRANTEE

By:    ____________________________    By:    ____________________________
Name:        Name:
Title:    

MICROSEMI CORPORATION
2008 PERFORMANCE INCENTIVE PLAN
TERMS AND CONDITIONS OF PERFORMANCE STOCK UNIT AWARD
		
	1.
	General.

These Terms and Conditions of Performance Stock Unit Award (these “Terms”) apply to a particular grant of stock units under the Plan (the “Award”) if incorporated by reference in the Notice of Grant of Performance Stock Unit Award (the “Grant Notice”) corresponding to that particular grant.  The recipient of the Award identified in the Grant Notice is referred to as the “Grantee.”  The effective date of grant of the Award as set forth in the Grant Notice is referred to as the “Award Date.”  The number of stock units covered by the Award is subject to adjustment under Section 7.1 of the Plan.
The Award was granted under and subject to the Microsemi Corporation 2008 Performance Incentive Plan (the “Plan”).  Capitalized terms are defined in the Plan if not defined herein.  The Award has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee.  The Grant Notice and these Terms are collectively referred to as the “Agreement” applicable to the Award. 
As used in the Agreement, the term “stock unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be the equivalent to one outstanding share of the Corporation’s Common Stock solely for purposes of the Plan and this Agreement.  The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to the Grantee if such Stock Units vest pursuant to Section 2 of the Terms.  The Stock Units shall not be treated as property or as a trust fund of any kind. 
		
	2.
	Vesting.  

The Award is subject to the vesting terms and conditions set forth in Exhibit A hereto, incorporated herein by this reference.  References to this Section 2 include Exhibit A.
		
	3.
	Effect of Termination of Employment or Services.  

Except as otherwise expressly provided below in this Section 3, if the Grantee ceases to be employed by or ceases to provide services to the Corporation or one of its Subsidiaries (the date of such termination of employment or services is referred to as the Grantee’s “Severance Date”), the Grantee’s Stock Units shall terminate to the extent such units have not become vested pursuant to Section 2 or Section 8.2 hereof as of the Severance Date (regardless of the reason for such termination of employment or services, whether with or without cause, voluntarily or involuntarily).  
		
	•
	If, however, the Grantee’s employment with the Corporation and its Subsidiaries terminates due to the Grantee’s death or Disability prior to the last day of the FY16-FY18 Performance Period, the Stock Units shall accelerate to such extent that the Total Target Number of Stock Units (as set forth in the Grant Notice) subject to the Award (including any Stock Units that may have vested prior to the date of such event pursuant to Section 2 hereof with respect to the FY16 Performance Period or the FY16-FY17 Performance Period) shall be fully vested as of the date of such event and any remaining unvested Stock Units subject to the Award (after giving effect to such acceleration, if required) shall terminate as of such event.

		
	•
	If, however, the Grantee’s employment with the Corporation or one of its Subsidiaries terminates prior to the last day of the FY16-FY18 Performance Period (other than due to Grantee’s death or Disability) and, in connection with the Grantee’s Severance Date, the Grantee is entitled to accelerated vesting of his or her outstanding equity awards pursuant to the terms of any written employment, severance or similar agreement with the Corporation in 

    

effect at the time of such termination, the Performance Periods then in effect with respect to the Award shall be deemed to end as of the last day of the fiscal quarter of the Corporation in which the Severance Date occurs (subject to the provisions of Section 8.2 below should a Change in Control Event occur before the end of such shortened period) and the Award will vest as of the end of such shortened period as to a number of Stock Units determined in accordance with Section 2 with performance measured for such shortened period.
		
	•
	If, however, the Grantee’s employment with the Corporation or one of its Subsidiaries terminates prior to the last day of the FY16-FY18 Performance Period (other than due to Grantee’s death or Disability, and other than a termination described in the preceding bullet point) and such termination qualifies as a Retirement, the Performance Periods then in effect with respect to the Award shall be deemed to end as of the last day of the fiscal quarter of the Corporation in which the Severance Date occurs (subject to the provisions of Section 8.2 below should a Change in Control Event occur before the end of such shortened period), each of the Target Number of EPS Stock Units and the Target Number of Revenue Stock Units subject to the Award will be pro-rated as described below and the Award will vest as of the end of such shortened period as to a number of Stock Units determined in accordance with Section 2 with performance measured for such shortened period.  In the event of such a Retirement, each of the Target Number of EPS Stock Units and the Target Number of Revenue Stock Units subject to the Award will be pro-rated as of the Grantee’s Severance Date by multiplying such Target Number of Stock Units otherwise subject to the Award by a fraction, the numerator of which is the total number of calendar days in the FY16-FY18 Performance Period that the Grantee was employed by the Corporation or one of its Subsidiaries and the denominator of which is the total number of calendar days in the FY16-FY18 Performance Period.  If such a Retirement occurs after the FY16 Performance Period, the offset to any pro-rated Stock Units payable with respect to the shortened Performance Period will be based on the actual (not pro-rated) Stock Units paid or payable for any Performance Period ended prior to such Retirement.

		
	•
	If the Grantee’s employment with the Corporation and its Subsidiaries terminates on or after the last day of the FY16-FY18 Performance Period due to (i) the Grantee’s death or Disability, (ii) a termination in connection with which the Grantee is entitled to accelerated vesting of his or her outstanding equity awards pursuant to the terms of any written employment, severance or similar agreement with the Corporation in effect at the time of such termination, or (iii) the Grantee’s Retirement, the Grantee will be treated for purposes of the Award as though no such termination of employment had occurred.

With respect to a termination of employment referred to in either of the second or third bullet points above, any remaining unvested Stock Units subject to the Award at the end of the shortened Performance Period shall terminate as of the end of such shortened period.  
For the purposes of the Award, “Disability” has the meaning given to such term in Treas. Reg. Section 1.409A-3(i)(4).  For purposes of the Award, “Retirement” means the Grantee’s Severance Date occurs more than ninety (90) days after the Date of Grant of the Award and, on the Severance Date, the Grantee has attained at least age 65 and has at least 10 years of service to the Corporation and/or its Subsidiaries.
If any unvested Stock Units are terminated pursuant to this Agreement, such Stock Units shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Grantee, or the Grantee’s beneficiary or personal representative, as the case may be.

    

		
	4.
	Continuance of Employment/Service Required; No Employment Commitment.  

Except as expressly provided in Section 3 above, the vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement.  Except as expressly provided in Section 3 above, employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 3 above or under the Plan.
Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, affects the Grantee’s status as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or services, or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other compensation or benefits.  Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Grantee without his consent thereto.
		
	5.
	Timing and Manner of Payment of Stock Units.  

On or as soon as administratively practical (and in all events not later than two and one-half months) following the last day of each Performance Period or any Change in Control Event (as such term is defined in Section 8.2), the Corporation shall deliver to the Grantee a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion) equal (subject to adjustment pursuant to Section 7.1 of the Plan) to the number of Stock Units subject to this Award that vested for that Performance Period or in connection with such Change in Control Event.
However, to the extent the Grantee’s Stock Units vest pursuant to Section 3, in the first two and one-half months of the calendar quarter following the calendar quarter in which the Grantee’s Separation From Service occurs, the Corporation shall deliver to the Grantee a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion) equal (subject to adjustment pursuant to Section 7.1 of the Plan) to the number of Stock Units subject to this Award that vested pursuant to Section 3 in connection with the Grantee’s termination of employment or death, as the case may be; provided, however, that if the Grantee is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of Grantee’s Separation From Service, Grantee shall not be entitled to any payment of such Stock Units until the earlier of (i) the date which is six (6) months after Grantee’s Separation From Service with the Corporation for any reason other than death, or (ii) the date of Grantee’s death, if and to the extent such delay in payment is required to comply with Section 409A of the Code.  For purposes of the Award, “Separation From Service” shall mean a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.
The Corporation’s obligation to deliver shares of Common Stock or otherwise make payment with respect to vested Stock Units is subject to the condition precedent that the Grantee or other person entitled under the Plan to receive any shares with respect to the vested Stock Units deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan.  The Grantee shall have no further rights with respect to any Stock Units that are so paid or that terminate pursuant to the terms hereof.

    

		
	6.
	Dividend and Voting Rights.

6.1    Limitations on Rights Associated with Units.  The Grantee shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly provided in Section 6.2 with respect to Dividend Equivalent Rights) and no voting rights, with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by the Grantee.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate.
6.2    Dividend Equivalent Rights Distributions.  As of any date that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall credit the Grantee with an additional number of Stock Units equal to (i) the per share cash dividend paid by the Corporation on its Common Stock on such date, multiplied by (ii) the Total Target Number of Stock Units (including any dividend equivalents previously credited hereunder) (with such Target Number adjusted pursuant to Section 7.1 of the Plan) subject to the Award as of the related dividend payment record date, divided by (iii) the fair market value of a share of Common Stock on the date of payment of such dividend (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan).  Any Stock Units credited pursuant to the foregoing provisions of this Section 6.2 shall be subject to the same vesting, payment and other terms, conditions and restrictions as the original Stock Units to which they relate.  No crediting of Stock Units shall be made pursuant to this Section 6.2 with respect to any Stock Units which, as of such record date, have either been paid pursuant to Section 5 or terminated pursuant to the terms hereof.  
		
	7.
	Non-Transferability.  

Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily.  The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.
		
	8.
	Adjustments; Change in Control.  

8.1    Adjustments.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan (including, without limitation, an extraordinary cash dividend on such stock), the Administrator shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award.  No such adjustment shall be made with respect to any ordinary cash dividend for which dividend equivalents are credited pursuant to Section 6.2.  For purposes of clarity, Sections A.2 and A.3 of Exhibit A control as to any adjustment of the performance goals, criteria or metrics.
8.2    Change in Control.  If, at any time after the Award Date and before the last day of the FY16-FY18 Performance Period (or, in the case of a “shortened” performance period provided in Section 3, before the last day of such shortened period), a Change in Control Event occurs, the Award shall accelerate to such extent that the greater of the following (after giving effect to and including any Stock Units that may have vested prior to the date of such event pursuant to Section 2 hereof) shall be fully vested as of the date of such event:
		
	•
	the Total Target Number of Stock Units (as set forth in the Grant Notice) subject to the Award; or

		
	•
	the number of Stock Units that would be payable to the Grantee if the FY16-FY18 Performance Period ended as of the last day of the fiscal quarter of the Corporation coinciding with or last preceding the date on which such Change in Control Event occurred 

    

and the Award vested as of the end of such shortened period in accordance with Section 2 with performance measured for such shortened period;
provided, however, that the accelerated vesting otherwise provided for above in this Section 8.2 shall not apply if the Stock Units terminated or were accelerated pursuant to Section 3 prior to the occurrence of such event.  For purposes of the Agreement, “Change in Control Event” means a “change in the ownership” of the Corporation, a “change in effective control” of the Corporation, or a “change in the ownership of a substantial portion of the assets” of the Corporation, within the meaning of Section 409A of the Code. 
		
	9.
	Tax Withholding.  

The Corporation shall reasonably determine the amount of any federal, state, local or other income, employment, or other taxes which the Corporation or any of its Subsidiaries may reasonably be obligated to withhold with respect to the grant, vesting or other event with respect to the Stock Units.  The Grantee shall be solely responsible for the satisfaction of such withholding requirements.  If such withholding event occurs in connection with the distribution of shares of Common Stock in respect of the Stock Units and subject to compliance with all applicable laws, the Corporation shall automatically withhold and reacquire the appropriate number of whole shares, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such distribution at the minimum applicable withholding rates; provided, however, that the Grantee may elect in advance, in accordance with such procedures as the Corporation may implement and subject to all applicable laws and Corporation policies (including insider-trading policies), to make alternative arrangements to provide for such withholding (which may include provision for a cash payment to the Corporation for the amount of such withholding obligations or a “sell-to-cover” arrangement with a broker to provide for the market sale of such shares to cover such withholding amount).  The Grantee shall execute such documents as may reasonably be requested by the Corporation or the broker, as applicable, in order to implement such transactions and shall otherwise comply with the administrative rules and procedures established by the Corporation with respect to such transactions.  If, however, any withholding event occurs with respect to the Stock Units other than in connection with the distribution of shares of Common Stock in respect of the Stock Units, or if the Corporation cannot legally satisfy such withholding obligations by such withholding and reacquisition of shares as described above, the Corporation shall be entitled to require a cash payment by or on behalf of the Grantee and/or to deduct from other compensation payable to the Grantee the amount of any such withholding obligations. 

		
	10.
	Notices.  

Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the Grantee’s last address reflected on the Corporation’s employment records.  Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government or a courier of internationally recognized prominence.  Any such notice shall be given only when received, but if the Grantee is no longer an Eligible Person, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 10.
		
	11.
	Plan.  

The Award and all rights of the Grantee under this Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference.  The Grantee agrees to be bound by the terms of the Plan and this Agreement.  The Grantee acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Agreement.  Unless otherwise expressly provided in other 

    

sections of this Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and shall not be deemed to) create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.
		
	12.
	Entire Agreement.  

This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof.  The Plan may be amended pursuant to Section 8.6 of the Plan.  This Agreement may be amended by the Administrator from time to time.  Any such amendment must be in writing and signed by the Corporation.  Any such amendment that materially and adversely affects the Grantee’s rights under this Agreement requires the consent of the Grantee in order to be effective with respect to the Award.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.
		
	13.
	Limitation on Grantee’s Rights.  

Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Grantee shall have only the rights of a general unsecured creditor of the Corporation with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to Stock Units, as and when payable hereunder.  
		
	14.
	Counterparts.  

This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  
		
	15.
	Section Headings.  

The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.
		
	16.
	Governing Law.  

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder.
		
	17.
	Construction.  

It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  This Agreement shall be construed and interpreted consistent with the foregoing intents.
		
	18.
	Clawback Policy.  

The Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any shares of 

    

Common Stock or other cash or property received with respect to the Stock Units (including any value received from a disposition of the shares acquired upon payment of the Stock Units).

* * * * *

    

EXHIBIT A
VESTING TERMS AND CONDITIONS
Subject to Sections 3 and 8.2 of the Terms, the percentage of the Total Target Number of Stock Units (as set forth in the Grant Notice) subject to the Award that vest will range from zero percent (0%) to two hundred seventy percent (270%) and will be determined based on the Corporation’s Adjusted EPS, Revenue and Relative TSR Ranking (as such terms are defined below) for the Corporation’s 2016, 2017 and 2018 fiscal years as set forth below in this Exhibit A.  (As set forth in the Grant Notice, thirty (30%) of the Total Target Number of Stock Units are referred to as the “Target Number of EPS Stock Units,” and seventy (70%) of the Total Target Number of Stock Units are referred to as the “Target Number of Revenue Stock Units.”)  The percentage of the Target Number of EPS Stock Units subject to the Award that vest will be determined based on the Corporation’s Adjusted EPS, and the percentage of the Target Number of Revenue Stock Units subject to the Award that vest will be determined based on the Corporation’s Revenue, in each case subject to the effect of a Relative TSR Ranking adjustment for the FY16-FY18 Performance Period.
A.1    Performance-Based Vesting.  
FY16 Performance Period.  Forty percent (40%) of the Target Number of EPS Stock Units subject to the Award and forty percent (40%) of the Target Number of Revenue Stock Units subject to the Award will be eligible to vest based on the Corporation’s Adjusted EPS Growth Performance Ranking and Revenue Growth Performance Ranking for the FY16 Performance Period in accordance with the following tables: 
	
		
	Adjusted EPS Growth Performance Ranking for the FY16 Performance Period
	Applicable Percentage

	Less than 10th Percentile
	0%

	10th Percentile
	25%

	25th Percentile
	60%

	50th Percentile or Higher
	100%

	
		
	Revenue Growth Performance Ranking for the FY16 Performance Period
	Applicable Percentage

	Less than 10th Percentile
	0%

	10th Percentile
	25%

	25th Percentile
	60%

	50th Percentile or Higher
	100%

 
    The percentage of the Target Number of EPS Stock Units subject to the Award that vest for the FY16 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Adjusted EPS Growth Performance Ranking for the FY16 Performance Period, multiplied by forty percent (40%) of the Target Number of EPS Stock Units subject to the Award.  The percentage of the Target Number of Revenue Stock Units subject to the Award that vest for the FY16 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Revenue Growth Performance Ranking for the FY16 Performance Period, multiplied by forty percent (40%) of the Target Number of Revenue Stock Units subject to the Award.
FY16-FY17 Performance Period.  One hundred percent (100%) of the Target Number of EPS Stock Units subject to the Award and one hundred percent (100%) of the Target Number of Revenue Stock Units subject to the Award will be eligible to vest based on the Corporation’s Adjusted EPS Growth 

 

Performance Ranking and Revenue Growth Performance Ranking for the FY16-FY17 Performance Period in accordance with the following tables: 
	
		
	Adjusted EPS Growth Performance Ranking for the FY16-FY17 Performance Period
	Applicable Percentage

	Less than 10th Percentile
	0%

	10th Percentile
	25%

	25th Percentile
	60%

	50th Percentile or Higher
	100%

	
		
	Revenue Growth Performance Ranking for the FY16-FY17 Performance Period
	Applicable Percentage

	Less than 10th Percentile
	0%

	10th Percentile
	25%

	25th Percentile
	60%

	50th Percentile or Higher
	100%

 
    The percentage of the Target Number of EPS Stock Units subject to the Award that vest for the FY16-FY17 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Adjusted EPS Growth Performance Ranking for the FY16-FY17 Performance Period, multiplied by one hundred percent (100%) of the Target Number of EPS Stock Units subject to the Award.  The percentage of the Target Number of Revenue Stock Units subject to the Award that vest for the FY16-FY17 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Revenue Growth Performance Ranking for the FY16-FY17 Performance Period, multiplied by one hundred percent (100%) of the Target Number of Revenue Stock Units subject to the Award.  Notwithstanding the previous two sentences, the Stock Units subject to the Award that vest for the FY16-FY17 Performance Period will be the number determined pursuant to the preceding two sentences but reduced (but not below zero) by the number of Stock Units subject to the Award that vested for the FY16 Performance Period.
FY16-FY18 Performance Period.  The Target Number of EPS Stock Units subject to the Award and the Target Number of Revenue Stock Units subject to the Award will be eligible to vest based on the Corporation’s Adjusted EPS Growth Performance Ranking, Revenue Growth Performance Ranking and Actual TSR Percentile for the FY16-FY18 Performance Period in accordance with the following tables: 
	
		
	Adjusted EPS Growth Performance Ranking for the FY16-FY18 Performance Period
	Applicable Percentage

	Less than 10th Percentile
	0%

	10th Percentile
	25%

	25th Percentile
	60%

	50th Percentile
	100%

	80th Percentile or Higher
	225%

 

	
		
	Adjusted Revenue Growth Performance Ranking for the FY16-FY18 Performance Period
	Applicable Percentage

	Less than 10th Percentile
	0%

	10th Percentile
	25%

	25th Percentile
	60%

	50th Percentile
	100%

	80th Percentile or Higher
	225%

 
    The percentage of the Target Number of EPS Stock Units subject to the Award that vest for the FY16-FY18 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Adjusted EPS Growth Performance Ranking for the FY16-FY18 Performance Period, multiplied by the Target Number of EPS Stock Units subject to the Award, subject to the Actual TSR Percentile adjustment described below.  The percentage of the Target Number of Revenue Stock Units subject to the Award that vest for the FY16-FY18 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Revenue Growth Performance Ranking for the FY16-FY18 Performance Period, multiplied by the Target Number of Revenue Stock Units subject to the Award, subject to the Actual TSR Percentile adjustment described below.  
If the Corporation’s Actual TSR Percentile for the FY16-FY18 Performance Period is in the top quartile of the Company Peer Group, then the Applicable Percentages otherwise determined for the FY16-FY18 Performance Period shall be multiplied by a factor of 1.2.  (For example, an Applicable Percentage otherwise determined as above for the FY16-FY18 Performance Period to be 150% would, after giving effect to such adjustment, if required, become an Applicable Percentage of 180%.)  If the Corporation’s Actual TSR Percentile for the FY16-FY18 Performance Period is in the bottom quartile of the Company Peer Group, then the Applicable Percentages otherwise determined for the FY16-FY18 Performance Period shall be multiplied by a factor of 0.8.  (For example, an Applicable Percentage otherwise determined for the FY16-FY18 Performance Period to be 150% would, after giving effect to such adjustment, if required, become a vesting percentage of 120%.)  If the Corporation’s Actual TSR Percentile for the FY16-FY18 Performance Period is in the second or the third quartile of the Company Peer Group, then no adjustment shall be made to the Applicable Percentages otherwise determined for the FY16-FY18 Performance Period.
Notwithstanding the prior two paragraphs, the Stock Units subject to the Award that vest for the FY16-FY18 Performance Period will be the number determined pursuant to the preceding two paragraphs but reduced (but not below zero) by the aggregate number of Stock Units subject to the Award that vested for the FY16 Performance Period and the FY16-FY17 Performance Period.  
General.  For each of the tables above, the applicable vesting percentage will be interpolated on a linear basis between the levels stated in the applicable table and fractional shares shall be rounded to the nearest whole share.
Any Stock Units that do not vest based on the performance requirements set forth in this Exhibit A (and which have not previously vested or terminated pursuant to the terms of this Agreement) will automatically terminate as of the last day of the FY16-FY18 Performance Period.  The number of Stock Units that vest based on performance as of the end of the applicable Performance Period will be determined by the Administrator following the end of the applicable Performance Period, and payment of vested Stock Units will be made as provided in Section 5 of the Terms.  Any such determination by the Administrator shall be final and binding.
A.2    Defined Terms.
For purposes of the Award, the following definitions will apply: 

 

“Actual TSR Percentile” means the percentile ranking of the Corporation’s TSR among the TSRs for the Company Peer Group members for the FY16-FY18 Performance Period.
“Adjusted EPS” means, as to the Corporation and any other Company Peer Group member for a particular Performance Period, the reported earnings per share of that entity for that particular Performance Period (using the calculation, whether in accordance with Generally Accepted Accounting Principles (“GAAP”) or non-GAAP, principally used by that entity to publicly report its earnings per share for that period), subject to the adjustments described below.
“Adjusted EPS Growth Performance Ranking” means, as to a particular Performance Period, the ranking of the Corporation’s Adjusted EPS growth for that Performance Period relative to the Adjusted EPS growth levels for that Performance Period for the companies (including the Corporation) comprising the Company Peer Group.  The Adjusted EPS Growth Performance Ranking for any particular entity within the Company Peer Group shall be determined based on the Company Peer Group member’s Adjusted EPS for the fiscal quarters of such entity that end during the applicable Performance Period, when compared with the Company Peer Group member’s Adjusted EPS for the four consecutive fiscal quarters of such entity that ended immediately prior to the applicable Performance Period, all as determined by the Administrator based on information publicly available to the Administrator at the time it makes such determination.
“Applicable Percentage” means, as to a particular Performance Period, a percentage determined based on the Corporation’s Adjusted EPS Growth Performance Ranking or Revenue Growth Performance Ranking, as applicable, for that Performance Period.
“Beginning Price” means, with respect to the Corporation and any other Company Peer Group member, the closing stock price of such company’s common stock on the principal exchange on which such stock is traded for the last trading day immediately preceding the start of the applicable Performance Period.

 

“Company Peer Group” means the Corporation and each of the following companies:
	
		
	Amkor Technology, Inc.

	Analog Devices, Inc.

	Avago Technologies, Ltd.

	AVX Corporation

	Cobham plc

	Cypress Semiconductor Corporation

	Diodes, Inc.

	Fairchild Semiconductor International, Inc.

	Infineon Technologies AG

	Integrated Device Technology, Inc.

	Intersil Corporation

	Linear Technology Corporation

	M/A-COM Technology Solutions Inc.

	Marvell Technology Group Ltd.

	Maxim Integrated Products, Inc.

	MaxLinear, Inc.

	Mercury Systems, Inc.

	Microchip Technology, Inc.

	MKS Instruments

	ON Semiconductor Corporation

	Power Integrations, Inc.

	QLogic Corp.

	RF Micro Devices, Inc.

	Semtech Corporation

	Silicon Laboratories, Inc.

	Skyworks Solutions, Inc.

	Vishay Intertechnology, Inc.

	Xilinx, Inc.

The Company Peer Group shall be subject to adjustment by the Administrator for changes that occur prior to the end of the applicable Performance Period as follows:  In the event of a merger or other business combination of two Company Peer Group members (including, without limitation, the acquisition of one Company Peer Group member, or all or substantially all of its assets, by another Company Peer Group member), the surviving, resulting or successor entity, as the case may be, shall continue to be treated as a member of the Company Peer Group, provided that the common stock (or similar equity security) of such entity is listed or traded on a national securities exchange as of the end of the FY16-FY18 Performance Period.  In the event that the common stock (or similar equity security) of a Company Peer Group member is otherwise not listed or traded on a national securities exchange at the end of the FY16-FY18 Performance Period, such entity shall be excluded from the Company Peer Group.
“Ending Price” means, with respect to the Corporation and any other Company Peer Group member, the closing stock price of such company’s common stock on the principal exchange on which such stock is traded for the last trading day occurring in the applicable Performance Period. 
“FY16 Performance Period” means the Corporation’s 2016 fiscal year.

 

“FY16-FY17 Performance Period” means the Corporation’s 2016 and 2017 fiscal years.
“FY16-FY18 Performance Period” means the Corporation’s 2016, 2017 and 2018 fiscal years.
“Performance Period” means either the FY16 Performance Period, the FY16-FY17 Performance Period, or the FY16-FY18 Performance Period, as applicable.
“Revenue” means, as to the Corporation and any other Company Peer Group member for a particular Performance Period, the reported revenue of that entity for that particular Performance Period (using the calculation, whether in accordance with GAAP or non-GAAP, principally used by the Corporation to publicly report its revenue for that period).
“Revenue Growth Performance Ranking” means, as to a particular Performance Period, the ranking of the Corporation’s Revenue growth for that Performance Period relative to the Revenue growth levels for that Performance Period for the companies (including the Corporation) comprising the Company Peer Group.  The Revenue Growth Performance Ranking for any particular entity within the Company Peer Group shall be determined based on the Company Peer Group member’s Revenue for the fiscal quarters of such entity that end during the applicable Performance Period, when compared with the Company Peer Group member’s Revenue for the four consecutive fiscal quarters of such entity that ended immediately prior to the applicable Performance Period, all as determined by the Administrator based on information publicly available to the Administrator at the time it makes such determination.
“TSR” means total shareholder return and shall be determined with respect to the Corporation and any other Company Peer Group member by dividing: (a) the sum of (i) the difference obtained by subtracting the Beginning Price from the Ending Price plus (ii) all dividends and other distributions for which the ex-dividend date (or similar date in the case of a distribution other than a dividend) related to such dividend or other distribution occurs during the FY16-FY18 Performance Period by (b) the Beginning Price.  Any non-cash distributions shall be ascribed such dollar value as may be determined by or at the direction of the Administrator.
A.3    Adjustments.  For purposes of the Award, the Administrator shall adjust the Adjusted EPS and Revenue (in each case, of the Corporation and any Company Peer Group member, as applicable) to the extent (if any) it determines that the adjustment is necessary or advisable to preserve the intended incentives and benefits to reflect (1) any material corporate transaction (such as a reorganization, combination, separation, merger, acquisition, or any combination of the foregoing), or any complete or partial liquidation of the Corporation, (2) any change in accounting policies or practices, or (3) the effects of any special charges to the Company’s earnings.  In addition, the Administrator shall make adjustments to the Ending Price and/or TSR and Adjusted EPS (in each case, of the Corporation and any Company Peer Group member, as applicable) to eliminate (to the extent necessary and without duplication) the impact of any stock splits, reverse stock splits, and stock dividends.  The Administrator’s determination of Adjusted EPS, Revenue, TSR, Adjusted EPS Growth Performance Ranking and Revenue Growth Performance Ranking, and Actual TSR Percentile for each Performance Period and whether, and the extent to which, any such adjustment is necessary shall be final and binding.  
* * * * *

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