Document:

Exhibit
10.27

 

JAZZ
SEMICONDUCTOR, INC.

 

2002
AMENDED AND RESTATED EQUITY INCENTIVE PLAN

 

ADOPTED:  JUNE 26, 2002

APPROVED
BY STOCKHOLDERS:  JUNE 26, 2002

AMENDED:  JUNE 25, 2003

AMENDED
AND RESTATED:  MAY 26, 2004

AMENDED
AND RESTATED:  OCTOBER 12, 2005

APPROVED
BY STOCKHOLDERS:  DECEMBER 8, 2005

TERMINATION
DATE:  JUNE 26, 2012

 

1.             PURPOSES.

 

(a)           Eligible
Stock Award Recipients.  The persons
eligible to receive Stock Awards are the Employees, Directors and Consultants
of the Company and its Affiliates.

 

(b)           Available
Stock Awards.  The purpose of the
Plan is to provide a means by which eligible recipients of Stock Awards may be
given an opportunity to benefit from increases in value of the Common Stock
through the granting of the following Stock Awards:  (i) Nonqualified Stock Options; (ii)
Incentive Stock Options; (iii) stock bonuses; and (iv) rights to acquire
restricted stock.

 

(c)           General
Purpose.  The Company, by means of
the Plan, seeks to retain the services of the group of persons eligible to
receive Stock Awards, to secure and retain the services of new members of this
group and to provide incentives for such persons to exert maximum efforts for
the success of the Company and its Affiliates.

 

2.             DEFINITIONS.

 

(a)           “Affiliate” means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such Person where “control” shall have the meaning given such
term under Rule 405 of the Securities Act. 
For purposes of this Plan, Affiliates of Carlyle Partners III, L.P.
shall include all Persons directly or indirectly controlled by TC Group, L.L.C.

 

(b)           “Board” means the Board of Directors of the Company.

 

(c)           “Cause” means the
termination of employment by reason of:

 

(i)            the
Board’s objective and factual determination that a Participant failed to
substantially perform the Participant’s duties (other than any such failure
resulting from the Participant’s Disability) which is not remedied within 30
days after receipt of written notice from the Company specifying such failure; 

 

(ii)           the
Board’s determination that a Participant failed to carry out, or comply with,
in any material respect any lawful and reasonable directive of the Board, which
is not

 

 

remedied within 30 days after receipt of written
notice from the Company specifying such failure;

 

(iii)         the
Participant’s conviction, plea of no contest, plea of nolo
contendere, or imposition of unadjudicated probation for any felony
or crime involving moral turpitude; 

 

(iv)          the
Participant’s unlawful use (including being under the influence) or possession
of illegal drugs on the Company’s premises or while performing the Participant’s
duties and responsibilities; or

 

(v)           the
Participant’s commission of an act of fraud, embezzlement, misappropriation,
willful misconduct, or breach of fiduciary duty against the Company.

 

(d)           “Code” means the Internal Revenue Code of 1986, as
amended.

 

(e)           “Committee” means a committee of one or more members of
the Board appointed by the Board in accordance with Section 3(a).

 

(f)            “Common Stock” means the Class B Common Stock of the
Company, par value $0.001 per share.

 

(g)           “Company” means Jazz Semiconductor, Inc., a Delaware
corporation.

 

(h)           “Consultant” means any person, including an advisor, (i)
engaged by the Company or an Affiliate to render consulting or advisory
services and who is compensated for such services; or (ii) serving as a member
of the Board of Directors of an Affiliate and who is compensated for such
services.  However, the term “Consultant”
shall not include Directors who are not compensated by the Company for their
services as Directors, and the payment of a director’s fee by the Company for
services as a Director shall not cause a Director to be considered a “Consultant”
for purposes of the Plan.

 

(i)            “Continuous Service” means that the Participant’s
service with the Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. 
A change in the capacity in which the Participant renders service to the
Company or an Affiliate as an Employee, Consultant or Director or a change in
the entity for which the Participant renders such service, provided that there
is no interruption or termination of the Participant’s service with the Company
or an Affiliate, shall not terminate a Participant’s Continuous Service.  For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director shall not
constitute an interruption of Continuous Service.  The Board or the chief executive officer of
the Company, in that party’s sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any other
personal leave.  Notwithstanding the
foregoing, a leave of absence shall be treated as Continuous Service for
purposes of vesting in a Stock Award only to such extent as may be provided in
the Company’s leave of absence policy or in the written terms of the
Participant’s leave of absence, if any.

 

(j)            “Corporate Event” means as determined by the Committee
(or by the Board, as applicable) in its sole discretion, any transaction or
event described in Section 12(a) or any

 

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unusual or nonrecurring transaction or event affecting
the Company, any Affiliate of the Company, or the financial statements of the
Company or any Affiliate, or changes in applicable laws, regulations, or
accounting principles.

 

(k)           “Covered
Employee” means an Employee who is, or could be, a “covered
employee” within the meaning of Section 162(m) of the Code.

 

(l)            “Director” means a member of the Board of Directors of
the Company.

 

(m)          “Disability” means at any time the Company or any of its
Affiliates sponsors a long-term disability plan for the Company’s Employees “disability”
as defined in such long-term disability plan for the purpose of determining a
participant’s eligibility for benefits, provided, however, if the long-term
disability plan contains multiple definitions of disability, “Disability” shall
refer to that definition of disability which, if a Participant qualified for
such disability benefits, would provide coverage for the longest period of
time.  The determination of whether a
Participant has a Disability shall be made by the person or persons required to
make disability determinations under the long-term disability plan.  At any time the Company does not sponsor a
long-term disability plan for its employees, Disability shall mean a Participant’s
inability to perform, with reasonable accommodation, the essential functions
the Participant’s position for a minimum of three (3) consecutive months during
any six (6) month period as a result of incapacity due to mental or physical
illness as determined by a physician selected by the Company or its insurers
and acceptable to the Participant or the Participant’s legal representative,
such agreement as to acceptability not to be unreasonably withheld or
delayed.  Any refusal by a Participant to
submit to a medical examination for the purpose of determining Disability shall
be deemed to constitute conclusive evidence of the Participant’s Disability.

 

(n)           “Employee” means any person employed by the Company or
an Affiliate as evidenced by the Company withholding employment and federal
income taxes from such person’s compensation, regardless of whether such person
is later deemed to be a common law employee. 
Service as a Director or payment of a director’s fee by the Company or
an Affiliate shall not be sufficient to constitute “employment” by the Company
or an Affiliate.

 

(o)           “Entity” means a corporation, partnership or other
entity.

 

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

 

(q)           “Exchange Act Person” means any natural person, Entity
or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act),
except that “Exchange Act Person” shall not include (i) the Company or any
Subsidiary of the Company; (ii) any employee benefit plan of the Company or any
Subsidiary of the Company or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any Subsidiary of the Company;
(iii) an underwriter temporarily holding securities pursuant to an offering of
such securities; or (iv) an Entity Owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
Ownership of stock of the Company. 

 

(r)           “Fair Market Value” means, as of any date, the closing
bid price of the Common Stock as reported by The Nasdaq National Market on such
date or, if there are no reported sales on such date, on the last day prior to
such date on which there were sales of the Common Stock

 

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on the The Nasdaq National Market or, if the Common
Stock is not quoted on The Nasdaq National Market, the closing sale price of
the Common Stock on any national securities exchange on which the Common Stock
is listed on such date.  If there is no
regular public trading market for such Common Stock, the Fair Market Value of
the Common Stock shall be determined by the Committee in good faith.

 

(s)            “Incentive Stock Option” means an Option intended to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code and which is designated as an Incentive Stock Option by the Committee.

 

(t)            “Independent
Director” means a member of the Board who is not an
Employee of the Company.

 

(u)           “Non-Employee
Director” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor
definition adopted by the Board.

 

(v)           “Nonqualified Stock Option” means an Option not intended
to qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder or an Option, which is
designated as an Incentive Stock Option by the Committee, that fails to qualify
as an incentive stock option under the meaning of Section 422 of the Code.

 

(w)          “Officer” means any person designated by the Company as
an officer.

 

(x)           “Option” means an Incentive Stock Option or a
Nonqualified Stock Option granted pursuant to the Plan.

 

(y)           “Option Agreement” means a written agreement between the
Company and an Optionholder evidencing the terms and conditions of an
individual Option grant.  Each Option
Agreement shall be subject to the terms and conditions of the Plan.

 

(z)           “Optionholder” means a person to whom an Option is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

 

(aa)         “Own,” “Owned,” “Owner,” “Ownership”  A person or Entity shall be deemed to “Own,”
to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of
securities if such person or Entity, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares
voting power, which includes the power to vote or to direct the voting, with
respect to such securities.

 

(bb)         “Parent” means any corporation, whether now or hereafter
existing (other than the Company), in an unbroken chain of corporations ending
with the Company if each of the corporations other than the last corporation in
the unbroken chain owns stock possessing more than fifty percent of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

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(cc)         “Participant” means a person to whom a Stock Award is
granted pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

 

(dd)         “Performance-Based Award”
means a Stock Award granted to selected Covered Employees pursuant to Section
8, but which is subject to the terms and conditions set forth in Section
9.  All Performance-Based Awards are
intended to qualify as Qualified Performance-Based Compensation.

 

(ee)         “Performance Criteria”
means the criteria that the Committee selects for purposes of establishing the
Performance Goal or Performance Goals for a Participant for a Performance
Period.  The Performance Criteria that
will be used to establish Performance Goals are limited to the following:  net earnings (either before or after
interest, taxes, depreciation and amortization), economic value-added (as
determined by the Committee), sales or revenue, net income (either before or
after taxes), operating earnings, cash flow (including, but not limited to,
operating cash flow and free cash flow), cash flow return on capital, return on
net assets, return on stockholders’ equity, return on assets, return on
capital, stockholder returns, return on sales, gross or net profit margin,
productivity, expense, margins, operating efficiency, customer satisfaction,
working capital, earnings per share, price per share of Stock, and market
share, any of which may be measured either in absolute terms or as compared to
any incremental increase or as compared to results of a peer group.  The Committee shall, within the time
prescribed by Section 162(m) of the Code, define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for such
Performance Period for such Participant.

 

(ff)          “Performance Goals”
means, for a Performance Period, the goals established in writing by the
Committee for the Performance Period based upon the Performance Criteria.  Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual.  The Committee,
in its discretion, may, within the time prescribed by Section 162(m) of the
Code, adjust or modify the calculation of Performance Goals for such
Performance Period in order to prevent the dilution or enlargement of the
rights of Participants (i) in the event of, or in anticipation of, any unusual
or extraordinary corporate item, transaction, event, or development, or (ii) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.

 

(gg)         “Performance Period”
means the one or more periods of time, which may be of varying and overlapping
durations, as the Committee may select, over which the attainment of one or
more Performance Goals will be measured for the purpose of determining a
Participant’s right to, and the payment of, a Performance-Based Award.

 

(hh)         “Person” means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or other
entity of whatever nature.

 

(ii)           “Plan” means this Jazz Semiconductor, Inc., 2002 Equity
Incentive Plan.

 

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(jj)           “Public Trading Date”
means the first date upon which Common Stock of the Company is listed (or
approved for listing) upon notice of issuance on any securities exchange or
designated (or approved for designation) upon notice of issuance as a national
market security on an interdealer quotation system.

 

(kk)         “Qualified
Performance-Based Compensation” means any compensation that is
intended to qualify as “qualified performance-based compensation” as described
in Section 162(m)(4)(C) of the Code.

 

(ll)           “Securities Act” means the Securities Act of 1933, as
amended.

 

(mm)      “Stock Award” means any right granted under the Plan,
including an Option, a stock bonus and a right to acquire restricted stock.

 

(nn)         “Stock Award Agreement” means a written agreement
between the Company and a holder of a Stock Award evidencing the terms and
conditions of an individual Stock Award grant. 
Each Stock Award Agreement shall be subject to the terms and conditions
of the Plan.

 

(oo)         “Stockholders Agreement” shall mean that certain
agreement by and between the Optionholder, the Company, and the stockholders
listed therein which contains certain restrictions and limitations applicable
to the shares of Common Stock acquired upon Option exercise (and to other
shares of Common Stock, if any, held by the Optionholder during the term of
such agreement).  The Board, in its
discretion, shall determine the terms of the Stockholders Agreement and may
amend the terms thereof from time to time. 
If the Optionholder is not a party to a Stockholders Agreement at the
time of exercise of the Option (or any portion thereof), the exercise of the
Option shall be subject to the condition that the Optionholder enter into a
Stockholders Agreement with the Company.

 

(pp)         “Subsidiary” means any corporation in an unbroken chain
of corporations beginning with such entity if each of the corporations other
than the last corporation in the unbroken chain then owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

 

(qq)         “Ten Percent Stockholder” means a Person who Owns (or is
deemed to Own pursuant to Section 424(d) of the Code) stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any of its Affiliates. 

 

3.             ADMINISTRATION.

 

(a)           Administration.  Prior to the Public Trading Date, the Plan
shall be administered by the Board. The Board may delegate administration of
the Plan to a Committee or Committees of one or more members of the Board.  From and after the Public Trading Date, the
Plan shall be administered by the Compensation Committee of the Board; provided, however that the Compensation
Committee may delegate to a committee of one or more members of the Board the
authority to grant or amend Stock Awards to Employees other than (a) senior
executives of the Company who are subject to Section 16 of the Exchange Act or
(b) Covered Employees.  The Committee
shall consist of solely of at least two individuals, each of whom qualifies as
(x) a Non-Employee Director, and (y) an “outside director” pursuant to Code
Section 162(m) and the

 

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regulations issued thereunder provided,
however, that (y) shall not apply until the earliest of: (i) the
first material modification of the Plan (including any increase in the number
of shares reserved for issuance under the Plan in accordance with Section 4);
(ii) the issuance of all of the shares of Common Stock reserved for issuance
under the Plan; (iii) the expiration of the Plan; (iv) the first meeting of
stockholders at which Directors of the Company are to be elected that occurs
after the close of the third calendar year following the calendar year in which
occurred the first registration of an equity security of the Company under
Section 12 of the Exchange Act; or (v) such other date required by Section
162(m) of the Code and the rules and regulations promulgated thereunder.  Reference to the Committee shall refer to the
Board if the Compensation Committee ceases to exist and the Board does not
appoint a successor Committee.

 

(b)           Administrative
Powers.  The Board (or the Committee,
as applicable) shall have the power, subject to, and within the limitations of,
the express provisions of the Plan:

 

(i)            To
determine from time to time which of the persons eligible under the Plan shall
be granted Stock Awards; when and how each Stock Award shall be granted; what
type or combination of types of Stock Award shall be granted; the provisions of
each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive Common Stock pursuant to a
Stock Award; and the number of shares of Common Stock with respect to which a
Stock Award shall be granted to each such person;

 

(ii)           To
construe and interpret the Plan and Stock Awards granted under it, and to
establish, amend and revoke rules and regulations for its administration.  The Board (or the Committee, as applicable),
in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully effective;

 

(iii)         To
amend the Plan, a Stock Award or Stock Award Agreement as provided in Section
13;

 

(iv)          To
terminate or suspend the Plan as provided in Section 14; and

 

(v)           Generally,
to exercise such powers and to perform such acts as the Board (or the Committee,
as applicable) deems necessary or expedient to promote the best interests of
the Company and that are not in conflict with the provisions of the Plan.

 

(c)           Delegation
to an Officer.  The Board (or the
Committee, as applicable) may delegate to one or more Officers of the Company
the authority to do one or both of the following:  (i) designate Employees, of the Company or
any of its Subsidiaries who are not Officers to be recipients of Stock Awards
other than Qualified Performance-Based Awards; and (ii) determine the number of
shares of Common Stock to be subject to such Stock Awards granted to such
Employees of the Company; provided, however,
that the Board resolutions regarding such delegation shall specify the total
number of shares of Common Stock that may be subject to the Stock Awards
granted by such Officer and that such Officer may not grant a Stock Award to
himself or herself.  Notwithstanding the
foregoing, the Board may not delegate authority to an Officer to determine the
Fair Market Value of the Common Stock.

 

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(e)           Review of Decision.  All
determinations, interpretations and constructions made by the Board (or the
Committee, as applicable) in good faith shall not be subject to review by any
person and shall be final, binding and conclusive on all persons.

 

4.             SHARES
SUBJECT TO THE PLAN.

 

(a)           Share
Reserve.  Subject to the provisions
of Section 12(a) relating to adjustments upon changes in stock, the Common
Stock that may be issued pursuant to Stock Awards shall not exceed in the
aggregate seventeen million six hundred forty seven thousand (17,647,000)
shares of Common Stock plus an annual increase on the first day of each
calendar year beginning in 2007 and ending in 2011, equal to the lesser of (a) 3.50%
of outstanding common shares on the last day of the immediately preceding
fiscal year; (b) 10,000,000 shares or (c) such lesser number of shares as is
determined by the Board.

 

(b)           Reversion
of Shares to the Share Reserve.  If
any Stock Award shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, the shares of Common Stock not
acquired under such Stock Award shall revert to and again become available for
issuance under the Plan, provided,
however, that, no shares of Common Stock shall become available pursuant to
this Section 4(b) to the extent that the transaction resulting in the return of
shares occurs more than ten years after the date of the most recent shareholder
approval of the Plan or such return of shares would require stockholder
approval under the applicable rules of The Nasdaq National Market or any other
applicable exchange or quotation system.

 

(c)           Source
of Shares.  The shares of Common
Stock subject to the Plan may be unissued shares or reacquired shares, bought
on the market or otherwise.

 

(d)           Share
Reserve Limitation.  To the extent
required by Section 260.140.45 of Title 10 of the California Code of
Regulations, the total number of shares of Common Stock issuable upon exercise
of all outstanding Options and the total number of shares of Common Stock
provided for under any stock bonus or similar plan of the Company shall not
exceed the applicable percentage as calculated in accordance with the
conditions and exclusions of Section 260.140.45 of Title 10 of the California
Code of Regulations (or any successor provision thereto), based on the shares
of Common Stock of the Company that are outstanding at the time the calculation
is made. 

 

(e)           Annual Limit on Number of Shares Subject to
Stock Award.  Notwithstanding
any provision in the Plan to the contrary, and subject to Section 12, the
maximum number of shares of Common Stock with respect to one or more Stock
Awards that may be granted to any one Participant during any year (measured
from the date of any grant) shall be 3,500,000; provided,
however, that the foregoing limitation shall not apply prior to the
Public Trading Date and, following the Public Trading Date, the foregoing
limitation shall not apply until the earliest of: (i) the first material
modification of the Plan (including any increase in the number of shares
reserved for issuance under the Plan in accordance with Section 4); (ii) the
issuance of all of the shares of Common Stock reserved for issuance under the Plan;
(iii) the expiration of the Plan; (iv) the first meeting of stockholders at
which Directors of the Company are to be elected that occurs after the close of
the third calendar year following the calendar year in which occurred the

 

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first registration of an equity security of the
Company under Section 12 of the Exchange Act; or (v) such other date required
by Section 162(m) of the Code and the rules and regulations promulgated
thereunder.  The foregoing limitation
shall be adjusted proportionately in connection with any change in the Company’s
capitalization as described in Section 12. 
For purposes of this Section 4(e), if a Stock Award is canceled in the
same calendar year it was granted (other than in connection with a transaction
described in Section 12), the canceled Stock Award will be counted against
the limit set forth in this Section 4(e). 
For this purpose, if the exercise price of a Stock Award is reduced, the
transaction shall be treated as a cancellation of the Stock Award and the grant
of a new Stock Award.

 

5.             ELIGIBILITY.

 

(a)           Eligibility
for Specific Stock Awards.  Stock
Awards may be granted to Employees, Directors and Consultants.  Incentive Stock Options may be granted only
to Employees.

 

(b)           Ten
Percent Stockholders.  

 

(i)            A
Ten Percent Stockholder shall not be granted an Option unless the exercise
price of such Option is at least (A) one hundred ten percent (110%) of the Fair
Market Value of the Common Stock on the date of grant; or (B) in the case of a
Nonqualified Stock Option, such lower percentage of the Fair Market Value of
the Common Stock on the date of grant as is permitted by Section 260.140.41 of
Title 10 of the California Code of Regulations at the time of the grant of the
Option.  

 

(ii)           A
Ten Percent Stockholder shall not be granted a restricted stock award unless
the purchase price of the restricted stock is at least (A) one hundred percent
(100%) of the Fair Market Value of the Common Stock on the date of grant; or
(B) such lower percentage of the Fair Market Value of the Common Stock on the
date of grant as is permitted by Section 260.140.42 of Title 10 of the
California Code of Regulations at the time of the grant of the restricted stock
award. 

 

(c)           Limitation
on Incentive Stock Options.  To the
extent that the aggregate Fair Market Value of Common Stock subject to an
Optionholder’s Incentive Stock Option and other incentive stock options granted
by the Company, any Parent or Subsidiary, which become exercisable for the first
time during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options or other options shall be
treated as Nonqualified Stock Options. 
For purposes of this Section 5, Incentive Stock Options shall be taken
into account in the order in which they were granted, and the Fair Market Value
of the Common Stock shall be determined as of the time of grant.

 

(d)           Consultants.  A Consultant shall not be eligible for the
grant of a Stock Award if, at the time of grant, either the offer or the sale
of the Company’s securities to such Consultant is not exempt under Rule 701 of
the Securities Act (“Rule 701”) because of the nature of the services that the
Consultant is providing to the Company, because the Consultant is not a natural
person, or because of some other provision of Rule 701, unless the Company
determines that such grant need not comply with the requirements of Rule 701
and will satisfy another

 

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exemption under the Securities Act as well as comply
with the securities laws of all other relevant jurisdictions. 

 

6.             GRANTING
OPTIONS.

 

(a)           Granting
of Options to Employees or Consultants.  

 

(i)            The
Committee shall from time to time:

 

(A)          Select from among the Employees or
Consultants (including those to whom Options have been previously granted under
the Plan) such of them as in its opinion should be granted Options;

 

(B)          Determine
the type of Option granted to Employees;

 

(C)          Determine
the number of shares to be subject to such Options granted to such Employees or
Consultants; and

 

(D)          Determine
the terms and conditions of such Options, consistent with the Plan; provided,
however, that all Options granted to Consultants shall be Nonqualified Stock
Options.

 

(ii)           Upon
the selection of an Employee or Consultants to be granted an Option pursuant to
Section 6(a), the Committee shall instruct the Secretary to issue such Option
and may impose such conditions on the grant of such Option as it deems
appropriate.  Without limiting the
generality of the preceding sentence, the Committee may require as a condition
to the grant of an Option to an Employee or Consultant that the Employee or
Consultant surrender for cancellation some or all of the unexercised Options which
have been previously granted to him or her. An Option the grant of which is
conditioned upon such surrender may have an Option price lower (or higher) than
the Option price of the surrendered Option, may cover the same (or a lesser or
greater) number of shares as the surrendered Option, may contain such other
terms as the Committee deems appropriate and shall be exercisable in accordance
with its terms, without regard to the number of shares, price, period of
exercisability or any other term or condition of the surrendered Option.

 

(b)           Granting
of Option to Independent Directors. 

 

(i)            The
Board shall from time to time:

 

(A)          Select
from among the Independent Directors (including those to whom Options have
previously been granted under the Plan) such of them as in its opinion should
be granted Options;

 

(B)          Determine
the number of shares to be subject to such Options granted to such selected
Independent Directors; and

 

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(C)          Determine
the terms and conditions of such Options, consistent with the Plan; provided,
however, that all Options granted to Independent Directors shall be
Nonqualified Stock Options.

 

(c)           Upon
the selection of an Independent Director to be granted an Option pursuant to
Section 6(b), the Board shall instruct the Secretary to issue such Option and
may impose such conditions on the grant of such Option as it deems appropriate.
Without limiting the generality of the preceding sentence, the Board may
require as a condition to the grant of an Option to an Independent Director
that the Independent Director surrender for cancellation some or all of the
unexercised Options which have been previously granted to him or her. An Option
the grant of which is conditioned upon such surrender may have an Option price
lower (or higher) than the Option price of the surrendered Option, may cover
the same (or a lesser or greater) number of shares as the surrendered Option,
may contain such other terms as the Board deems appropriate and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, period of exercisability or any other term or condition of the
surrendered Option.

 

7.             OPTION
PROVISIONS.

 

Each
Option shall be evidenced by a written Option Agreement which shall contain
such terms and conditions as the Board shall deem appropriate.  The provisions of separate Options need not
be identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of
each of the following provisions:

 

(a)           Term.  The term of an Option shall be ten years from
the earlier of the date the Plan is adopted or the date the Plan is approved by
the stockholders, unless a shorter term is determined by the Board (or the
Committee, as applicable) at the time of grant of the Option or as the Option
may be amended.  In the case of an
Incentive Stock Option granted to a Ten Percent Stockholder, the term of the
Option shall be five (5) years from the date of grant or such shorter term as
may be provided in the Option Agreement.

 

(b)           Exercise
Price of an Option.  

 

(i)            Subject
to the provisions of Section 5(b) regarding Ten Percent Stockholders, the
exercise price of each Option shall be not less than one hundred percent (100%)
of the Fair Market Value of the Common Stock subject to the Option on the date
the Option is granted. 

 

(ii)           In
the case of an Incentive Stock Option, the per share exercise price of Common
Stock shall be no less than one hundred percent (100%) of the Fair Market Value
per share on the date of grant.

 

(iii)         Notwithstanding
the foregoing, an Option may be granted with an exercise price lower than that
set forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

 

(c)           Consideration.  The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in

 

11

 

cash at the time the Option is exercised; or (ii) at
the discretion of the Board at the time of the grant of the Option or
subsequently, (A) by delivery to the Company of other Common Stock; (B) according
to a deferred payment or other similar arrangement with the Optionholder; or
(C) in any other form of legal consideration that may be acceptable to the
Board (or the Committee, as applicable). 
Unless otherwise specifically provided in the Option, the purchase price
of Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the
Company, shall be paid only by shares of the Common Stock of the Company that
have been held for more than six (6) months (or such longer or shorter period
of time required to avoid a charge to earnings for financial accounting
purposes).  At any time that the Company
is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined
in the Delaware General Corporation Law, shall not be made by deferred payment.

 

In the
case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to
avoid (1) the treatment as interest, under any applicable provisions of the
Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement and (2) the treatment of the Option as a variable
award for financial accounting purposes. 

 

(d)           Transferability
of an Option.  Unless otherwise
provided by the Compensation Committee, no Option or interest or right therein
or part thereof shall be liable for the debts, contracts or engagements of the
Optionholder or his or her successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law, by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided
however, an Option shall be transferable by will or by the laws of descent and
distribution and, to the extent provided in the Option Agreement, to such
further extent as permitted by Section 260.140.41(d) of Title 10 of the
California Code of Regulations at the time of the grant of the Option, and
shall be exercisable during the lifetime of the Optionholder only by the
Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

 

(e)           Vesting
Generally.  The total number of
shares of Common Stock subject to an Option may, but need not, vest and
therefore become exercisable in periodic installments that may, but need not,
be equal.  The Option may be subject to
such other terms and conditions on the time or times when it may be exercised
(which may be based on performance or other criteria) as the Board may deem
appropriate.  The vesting provisions of individual
Options may vary.  The provisions of this
Section 7(e) are subject to any Option provisions governing the minimum number
of shares of Common Stock as to which an Option may be exercised.  Except as otherwise provided in the Option
Agreement, no portion of an Option which is exercisable at termination of
Continuous Services shall thereafter become exercisable.

 

(f)            Minimum
Vesting.  Notwithstanding the
foregoing Section 7(e), to the extent that the following restrictions on
vesting are required by Section 260.140.41(f) of Title 10 of the

 

12

 

California Code of Regulations at the time of the
grant of the Option, to the extent applicable to the Option, then:

 

(i)            Options
granted to an Employee who is not an Officer, Director or Consultant shall
provide for vesting of the total number of shares of Common Stock at a rate of
at least twenty percent (20%) per year over five (5) years from the date the
Option was granted, subject to reasonable conditions such as continued
employment (or such other vesting schedule as any amendments to or successor
provision of Section 260.140.41(f) of Title 10 of the California Code of
Regulations may require); and

 

(ii)           Options
granted to Officers, Directors or Consultants may be made fully exercisable,
subject to reasonable conditions such as continued employment, at any time or
during any period established by the Company.

 

(g)           Termination
of Continuous Service.  In the event
that an Optionholder’s Continuous Service terminates (for reasons other than
Cause or upon the Optionholder’s death or Disability), the Optionholder may
exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination) but only within such period
of time ending on the earlier of (i) the date three (3) months following the
termination of the Optionholder’s Continuous Service (or such longer or shorter
period specified in the Option Agreement, which period shall not be less than
thirty (30) days unless such termination is for Cause); or (ii) the expiration
of the term of the Option as set forth in the Option Agreement.  If, after termination, the Optionholder does
not exercise his or her Option within the time specified in the Option Agreement,
the Option shall terminate.

 

(h)           Extension
of Termination Date.  An Optionholder’s
Option Agreement may also provide that if the exercise of the Option following
the termination of the Optionholder’s Continuous Service (for reasons other
than Cause or upon the Optionholder’s death or Disability) would be prohibited
at any time solely because the issuance of shares of Common Stock would violate
the registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in Section 7(a); or (ii) the expiration of a period of three (3) months
after the termination of the Optionholder’s Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements.

 

(i)            Disability
of Optionholder.  In the event that
an Optionholder’s Continuous Service terminates as a result of the Optionholder’s
Disability, the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i)
the date six (6) months following such termination (or such longer or shorter
period specified in the Option Agreement, which period shall not be less than six
(6) months); or (ii) the expiration of the term of the Option as set forth in
the Option Agreement.  If, after
termination, the Optionholder does not exercise his or her Option within the
time specified herein, the Option shall terminate.

 

(j)            Death
of Optionholder.  In the event that
(i) an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s death; or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s

 

13

 

Continuous Service for a reason other than death, then
the Option may be exercised by the Optionholder’s estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Optionholder’s death pursuant
to Section 7(d) (even if the Optionholder dies before becoming entitled to
exercise all or any part of the shares subject to the Option), but only within
the period ending on the earlier of (A) the date three (3) years following the
date of death (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than six (6) months); or (B) the
expiration of the term of such Option as set forth in the Option
Agreement.  If, after death, the Option
is not exercised within the time specified herein, the Option shall terminate.

 

(k)           Termination
for Cause.  In the event an
Optionholder’s Continuous Service is terminated for Cause, the Option shall
terminate upon the termination date of such Optionholder’s Continuous Service
and the Optionholder is prohibited from exercising his or her Option as of the
time of such termination.

 

(l)            Conditions
to Issuance of Stock Certificates.  The
shares of stock issuable and deliverable upon the exercise of an Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company.  A certificate of shares will be delivered to
the Optionholder at the Company’s principal place of business within thirty
(30) days of receipt by the Company of the written notice and payment, unless
an earlier date is agreed upon. Notwithstanding the above, the Company shall
not be required to issue or deliver any certificate or certificates for shares
of stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

 

(i)            The
admission of such shares to listing on any and all stock exchanges on which
such class of stock is then listed;

 

(ii)           The
completion of any registration or other qualification of such shares under any
state or federal law or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body, which the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall, in its sole discretion, deem necessary or advisable;

 

(iii)         The
obtaining of any approval or other clearance from any state or federal governmental
agency which the Committee (or the Board, in the case of Options granted to
Independent Directors) shall, in its sole discretion, determine to be necessary
or advisable; and

 

(iv)          The
payment to the Company of all amounts which it is required to withhold under
federal, state or local law in connection with the exercise of the Option.

 

(m)          Rights
as Stockholders.  The holder of an
Option shall not be, nor have any of the rights or privileges of, a stockholder
of the Company in respect of any shares purchasable upon the exercise of any
part of an Option unless and until such holder has signed a Stockholders
Agreement and certificates representing such shares have been issued by the
Company to such holder.

 

14

 

(n)           Transfer
Restrictions.  Shares acquired upon
exercise of an Option shall be subject to the terms and conditions of a
Stockholders Agreement.  In addition, the
Committee (or the Board, in the case of Options granted to Independent
Directors), in its sole discretion, may impose further restrictions on the
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate.  Any such restriction
shall be set forth in the respective Option agreement and may be referred to on
the certificates evidencing such shares.

 

8.             PROVISIONS
OF STOCK AWARDS OTHER THAN OPTIONS.

 

(a)           Stock
Bonus Awards.  Each stock bonus
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate.  The terms
and conditions of stock bonus agreements may change from time to time, and the
terms and conditions of separate stock bonus agreements need not be identical,
but each stock bonus agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:  

 

(i)            Consideration.  A stock bonus may be awarded in consideration
for past services actually rendered to the Company or an Affiliate for its
benefit and may be linked to one or more of the Performance Criteria or other
specific performance criteria determined appropriate by the Committee, in each
case on a specified date or dates over a period or periods determined by the
Committee.

 

(ii)           Vesting.  Subject to the “Repurchase Limitation” in
Section 11(g), shares of Common Stock awarded under the stock bonus agreement
may, but need not, be subject to a share repurchase option in favor of the
Company in accordance with a vesting schedule to be determined by the Board.

 

(iii)         Termination
of Participant’s Continuous Service. 
Subject to the “Repurchase Limitation” in Section 11(g), in the event
that a Participant’s Continuous Service terminates, the Company may reacquire
any or all of the shares of Common Stock held by the Participant that have not
vested as of the date of termination under the terms of the stock bonus
agreement.

 

(iv)          Transferability.  Rights to acquire shares of Common Stock
under the stock bonus agreement shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the
lifetime of the Participant only by the Participant.  

 

(b)           Restricted
Stock Awards.  Each restricted stock
purchase agreement shall be in such form and shall contain such terms and conditions
as the Board shall deem appropriate and may be linked to one or more of the
Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates over a
period or periods determined by the Committee. 
The terms and conditions of the restricted stock purchase agreements may
change from time to time, and the terms and conditions of separate restricted
stock purchase agreements need not be identical, but each restricted stock purchase
agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:

 

15

 

(i)            Purchase
Price.  Subject to the provisions of
Section 5(b) regarding Ten Percent Stockholders, the purchase price of
restricted stock awards shall not be less than eighty-five percent (85%) of the
Common Stock’s Fair Market Value on the date such award is made or at the time
the purchase is consummated.  

 

(ii)           Consideration.  The purchase price of Common Stock acquired
pursuant to the restricted stock purchase agreement shall be paid either:  (A) in cash at the time of purchase; (B) at
the discretion of the Board, according to a deferred payment or other similar
arrangement with the Participant; or (C) in any other form of legal
consideration that may be acceptable to the Board (or the Committee, as
applicable) in its discretion; provided, however,
that at any time that the Company is incorporated in Delaware, then payment of
the Common Stock’s “par value,” as defined in the Delaware General Corporation
Law, shall not be made by deferred payment.

 

(iii)         Vesting.  Subject to the “Repurchase Limitation” in
Section 11(g), shares of Common Stock acquired under the restricted stock
purchase agreement may, but need not, be subject to a share repurchase option
in favor of the Company in accordance with a vesting schedule to be determined
by the Board.

 

(iv)          Termination
of Participant’s Continuous Service. 
Subject to the “Repurchase Limitation” in Section 11(g), in the event
that a Participant’s Continuous Service terminates, the Company may repurchase
or otherwise reacquire any or all of the shares of Common Stock held by the
Participant that have not vested as of the date of termination under the terms
of the restricted stock purchase agreement.

 

(v)           Transferability.  Rights to acquire shares of Common Stock
under the restricted stock purchase agreement shall not be transferable except
by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant. 

 

9.             PERFORMANCE-BASED
AWARDS.

 

(a)           Purpose.  The purpose of this Section 9 is to provide
the Committee the ability to qualify Awards other than Options that are granted
pursuant to Section 8 as Qualified Performance-Based Compensation.  If the Committee, in its discretion, decides
to grant a Performance-Based Award to a Covered Employee, the provisions of
this Section 9 shall control over any contrary provision contained in Section
8; provided, however, that the
Committee may in its discretion grant Stock Awards to Covered Employees that
are based on Performance Criteria or Performance Goals but that do not satisfy
the requirements of this Section 9.

 

(b)           Applicability.  This Section 9 shall apply only to those
Covered Employees selected by the Committee to receive Performance-Based
Awards.  The designation of a Covered
Employee as a Participant for a Performance Period shall not in any manner
entitle the Participant to receive a Stock Award for the period.  Moreover, designation of a Covered Employee
as a Participant for a particular Performance Period shall not require
designation of such Covered Employee as a Participant in any subsequent
Performance Period and designation

 

16

 

of one Covered Employee as a Participant shall not
require designation of any other Covered Employees as a Participant in such
period or in any other period.

 

(c)           Procedures
with Respect to Performance-Based Awards. 
To the extent necessary to comply with the Qualified Performance-Based
Compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
any Stock Award granted under Section 8 which may be granted to one or more
Covered Employees, no later than ninety (90) days following the commencement of
any fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m)
of the Code), the Committee shall, in writing, (i) designate one or more
Covered Employees, (ii) select the Performance Criteria applicable to the
Performance Period, (iii) establish the Performance Goals, and amounts of such
Stock Awards, as applicable, which may be earned for such Performance Period,
and (iv) specify the relationship between Performance Criteria and the
Performance Goals and the amounts of such Stock Awards, as applicable, to be
earned by each Covered Employee for such Performance Period.  Following the completion of each Performance
Period, the Committee shall certify in writing whether the applicable
Performance Goals have been achieved for such Performance Period.  In determining the amount earned by a Covered
Employee, the Committee shall have the right to reduce or eliminate (but not to
increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period.

 

(d)           Payment
of Performance-Based Awards.  Unless
otherwise provided in the applicable Stock Award Agreement, a Participant must
be employed by the Company or a Subsidiary on the day a Performance-Based Award
for such Performance Period is paid to the Participant.  Furthermore, a Participant shall be eligible
to receive payment pursuant to a Performance-Based Award for a Performance
Period only if the Performance Goals for such period are achieved.  In determining the amount earned under a
Performance-Based Award, the Committee may reduce or eliminate the amount of
the Performance-Based Award earned for the Performance Period, if in its sole
and absolute discretion, such reduction or elimination is appropriate.

 

(e)           Additional Limitations.  Notwithstanding any other provision of the
Plan, any Stock Award which is granted to a Covered Employee and is intended to
constitute Qualified Performance-Based Compensation shall be subject to any
additional limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as qualified
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and the Plan shall be deemed amended to the extent necessary to conform to such
requirements.

 

10.          USE
OF PROCEEDS FROM STOCK.

 

Proceeds
from the sale of Common Stock pursuant to Stock Awards shall constitute general
funds of the Company.

 

17

 

11.          MISCELLANEOUS.

 

(a)           Acceleration
of Exercisability and Vesting.  The
Board shall have the power to accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any part thereof
will vest in accordance with the Plan, notwithstanding the provisions in the
Stock Award stating the time at which it may first be exercised or the time
during which or at which it will vest.

 

(b)           Stockholder
Rights.  No Participant shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares of Common Stock subject to such Stock Award unless and until such
Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.

 

(c)           No
Employment or other Service Rights. 
Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice
and with or without Cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate; or (iii)
the service of a Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may be.

 

(d)           Investment
Assurances.  The Company may require
a Participant, as a condition of exercising or acquiring Common Stock under any
Stock Award, (i) to give written assurances satisfactory to the Company as to
the Participant’s knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock Award;
and (ii) to give written assurances satisfactory to the Company stating that
the Participant is acquiring Common Stock subject to the Stock Award for the
Participant’s own account and not with any present intention of selling or
otherwise distributing the Common Stock. 
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares of Common
Stock upon the exercise or acquisition of Common Stock under the Stock Award
has been registered under a then currently effective registration statement
under the Securities Act; or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws.  The Company may, upon advice of counsel to
the Company, place legends on stock certificates issued under the Plan as such counsel
deems necessary or appropriate in order to comply with applicable securities
laws, including, but not limited to, legends restricting the transfer of the
Common Stock.

 

(e)           Withholding
Obligations.  To the extent provided
by the terms of a Stock Award Agreement, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of Common Stock under a Stock Award by any of the following means
(in addition to the Company’s right to withhold from any compensation paid to

 

18

 

the Participant by the Company) or by a combination of
such means:  (i) tendering a cash
payment; (ii) authorizing the Company to withhold shares of Common Stock from
the shares of Common Stock otherwise issuable to the Participant as a result of
the exercise or acquisition of Common Stock under the Stock Award; provided, however, that no shares of Common Stock are
withheld with a value exceeding the minimum amount of tax required to be
withheld by law (or such lower amount as may be necessary to avoid variable
award accounting); or (iii) delivering to the Company owned and unencumbered
shares of Common Stock.

 

(f)            Information
Obligation.  To the extent required
by Section 260.140.46 of Title 10 of the California Code of Regulations, the
Company shall deliver financial statements to Participants at least
annually.  This Section 11(f) shall not
apply to key Employees whose duties in connection with the Company assure them
access to equivalent information.

 

(g)           Repurchase
Limitation.  The terms of any
repurchase option shall be specified in the Stock Award and may be either at
Fair Market Value at the time of repurchase or at not less than the original
purchase price.  To the extent required
by Section 260.140.41 and Section 260.140.42 of Title 10 of the California Code
of Regulations at the time a Stock Award is made, any repurchase option
contained in a Stock Award granted to a person who is not an Officer, Director
or Consultant shall be upon the terms described below (which terms shall be
subject to any amendments to or successor provision of Section 260.140.41(f) of
Title 10 of the California Code of Regulations, and shall be deemed modified to
conform to any such amendments or successor provisions without further action
by the Board of the Committee, if applicable, subject to the provisions of
Section 13 of the Plan):

 

(i)            Fair
Market Value.  If the repurchase
option gives the Company the right to repurchase the shares of Common Stock
upon termination of employment at not less than the Fair Market Value of the
shares of Common Stock to be purchased on the date of termination of Continuous
Service, then (i) the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares of Common Stock
within ninety (90) days of termination of Continuous Service (or in the case of
shares of Common Stock issued upon exercise of Stock Awards after such date of
termination, within ninety (90) days after the date of the exercise) or such
longer period as may be agreed to by the Company and the Participant (for
example, for purposes of satisfying the requirements of Section 1202(c)(3) of
the Code regarding “qualified small business stock”); and (ii) the right
terminates when the shares of Common Stock become publicly traded.

 

(ii)           Original
Purchase Price.  If the repurchase
option gives the Company the right to repurchase the shares of Common Stock
upon termination of Continuous Service at the original purchase price, then (i)
the right to repurchase at the original purchase price shall lapse at the rate
of at least twenty percent (20%) of the shares of Common Stock per year over
five (5) years from the date the Stock Award is granted (without respect to the
date the Stock Award was exercised or became exercisable); and (ii) the right
to repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares of Common Stock within ninety (90) days of
termination of Continuous Service (or in the case of shares of Common Stock
issued upon exercise of Options after such date of termination, within ninety
(90) days after the date of the exercise) or such longer period as may be
agreed to by the Company and the Participant (for

 

19

 

example, for purposes of satisfying the requirements
of Section 1202(c)(3) of the Code regarding “qualified small business stock”).

 

(h)           No
Impairment of Rights.  Amendment,
suspension or termination of the Plan shall not impair rights and obligations
under any Stock Award granted while the Plan is in effect except with the
written consent of the Participant.

 

(i)            Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the
Plan, the Plan, and any Stock Award granted or awarded to any Participant who
is then subject to Section 16 of the Exchange Act, shall be subject to any
additional limitations set forth in any applicable exemptive rule under Section
16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange
Act) that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law,
the Plan and Stock Awards granted or awarded hereunder shall be deemed amended
to the extent necessary to conform to such applicable exemptive rule.

 

12.          ADJUSTMENTS
UPON CHANGES IN STOCK.

 

(a)           In
the event that the Board (or the Committee, as applicable) determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets of the
Company (including, but not limited to, a Corporate Event), or exchange of
Common Stock or other securities of the Company, issuance of warrants or other
rights to purchase Common Stock or other securities of the Company, or other
similar corporate transaction or event, in the Committee’s sole discretion (or
in the case of Options granted to Independent Directors, the Board’s sole
discretion), affects the Common Stock such that an adjustment is determined by
the Board (or the Committee, as applicable) to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan or with respect to an Option, then the
Board (or the Committee, as applicable) shall, in such manner as it may deem
equitable, adjust any or all of:

 

(i)            The
number and kind of shares of Common Stock (or other securities or property)
with respect to which Options may be granted under the Plan (including, but not
limited to, adjustments of the limitations in Section 4 on the maximum number
and kind of shares which may be issued);

 

(ii)           The
number and kind of shares of Common Stock (or other securities or property)
subject to outstanding Options;

 

(iii)         The
exercise price with respect to any Option; and

 

(iv)          The
financial or other performance “targets” specified in each Option agreement for
determining the exercisability of Options.

 

(b)           Subject
to the terms of outstanding Options, upon the occurrence of a Corporate Event,
the Board (or the Committee, as applicable), in its sole discretion, is hereby
authorized to

 

20

 

take any one or more of the following actions whenever
the Board (or the Committee, as applicable) determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Option under this Plan, to facilitate such Corporate Event or to give
effect to such changes in laws, regulations or principles:

 

(A)          In
its sole discretion, and on such terms and conditions as it deems appropriate,
the Board (or the Committee, as applicable) may provide, either by the terms of
the applicable Option agreement or by action taken prior to the occurrence of
such Corporate Event and either automatically or upon the Optionholder’s
request, for either the purchase of any such Option for an amount of cash equal
to the amount that could have been attained upon the exercise of the vested
portion of such Option (and such additional portion of the Option as the Board
or Committee may determine) immediately prior to the occurrence of such
transaction or event, or the replacement of such vested (and other) portion of such
Option with other rights or property selected by the Board (or the Committee,
as applicable) in its sole discretion;

 

(B)          In
its sole discretion, the Board (or the Committee, as applicable) may provide,
either by the terms of the applicable Option agreement or by action taken prior
to the occurrence of such Corporate Event, that the Option (or any portion
thereof) cannot be exercised after such event;

 

(C)          In its sole discretion, and on such terms
and conditions as it deems appropriate, the Board (or the Committee, as
applicable) may provide, either by the terms of the applicable Option agreement
or by action taken prior to the occurrence of such Corporate Event, that for a
specified period of time prior to such Corporate Event, such Option shall be
exercisable as to all shares covered thereby or a specified portion of such
shares, notwithstanding anything to the contrary in (1) Section 7; or (2) the
provisions of the applicable Option agreement;

 

(D)          In
its sole discretion, and on such terms and conditions as it deems appropriate,
the Board (or the Committee, as applicable) may provide, either by the terms of
the applicable Option agreement or by action taken prior to the occurrence of
such Corporate Event, that upon such event, such Option (or any portion
thereof) be assumed by the successor or survivor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar options, rights or
awards covering the stock of the successor or survivor corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices; and

 

(E)          In
its sole discretion, and on such terms and conditions as it deems appropriate,
the Board (or the Committee, as applicable) may make adjustments in the number
and type of shares of Common Stock (or other securities or property) subject to
outstanding Options (or any portion thereof) and/or in the terms and conditions
of (including the exercise price), and the

 

21

 

criteria included in, outstanding Options and Options
which may be granted in the future.

 

(c)           Subject
to the Board (or the Committee, as applicable) may, in its sole discretion,
include such further provisions and limitations in any Option agreement as it
may deem equitable and in the best interests of the Company and its
Subsidiaries.

 

13.          AMENDMENT
OF THE PLAN AND STOCK AWARDS.

 

(a)           Amendment
of Plan.  The Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board or the Committee. However, without stockholder
approval within twelve (12) months before or after such action (within such
other time period as may be required by applicable law, rules or regulations)
no action of the Board or the Committee may, except as provided in Section 12,
increase any limit imposed in Section 4 on the maximum number of shares which
may be issued on exercise of Options, reduce the minimum Option exercise price
requirements of Section 7(b), or extend the limit imposed in this Section 13 on
the period during which Options may be granted. 
Except as provided by Section 12, neither the amendment, suspension nor
termination of the Plan shall, without the consent of the holder of the Option,
alter or impair any rights or obligations under any Option theretofore
granted.  No Option may be granted during
any period of suspension nor after termination of the Plan, and in no event may
any Option be granted under this Plan after the expiration of ten (10) years
from the date the Plan is adopted by the Board.

 

(b)           Stockholder Approval.  This Plan will be submitted for the approval
of the Company’s stockholders within twelve months after the date of the Board’s
initial adoption of this Plan.  No Option
may be exercised to any extent by anyone unless and until the Plan is so
approved by the stockholders, and if such approval has not been obtained by the
end of said twelve-month period, the Plan and all Options theretofore granted
shall thereupon be canceled and become null and void.

 

(c)           Amendment
of Stock Awards or Stock Award Agreements. 
The Board at any time, and from time to time, may amend the terms of any
one or more Stock Awards or Stock Award Agreements; provided,
however, that the rights under any Stock Award or Stock Award
Agreement shall not be impaired by any such amendment unless (i) the Company
requests the consent of the Participant; and (ii) the Participant consents in
writing.

 

14.          TERMINATION
OR SUSPENSION OF THE PLAN.

 

The Board may suspend or terminate the Plan at any
time.  Unless sooner terminated, the Plan
shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the stockholders of the Company,
whichever is earlier.  No Stock Awards
may be granted under the Plan while the Plan is suspended or after it is
terminated; provided, however, that any Stock Awards granted prior to the
termination of the Plan shall remain subject to the terms and conditions of the
Plan, unless otherwise provided in the Stock Award Agreement.

 

22

 

15.          EFFECTIVE
DATE OF PLAN.

 

The Plan shall become effective as determined by the
Board, but no Stock Award shall be exercised (or, in the case of a Stock Bonus
Award, shall be granted) unless and until the Plan has been approved by the
stockholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.

 

16.          CHOICE
OF LAW.

 

The law of the State of California shall govern all
questions concerning the construction, validity and interpretation of this
Plan, without regard to such state’s conflict of laws rules.

 

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Exhibit 10.28    
    

  

  

 

THIRD AMENDED AND RESTATED STOCKHOLDER AGREEMENT  

by and among 

JAZZ SEMICONDUCTOR, INC.,
  a Delaware corporation; 

CONEXANT SYSTEMS, INC.,
  a Delaware corporation; 

CARLYLE PARTNERS III, L.P.,
  a Delaware limited partnership; 

CP III COINVESTMENT, L.P.,
  a Delaware limited partnership; 

CARLYLE HIGH YIELD PARTNERS, L.P.,
  a Delaware limited partnership; 

and 

RF MICRO DEVICES, INC.,
  a North Carolina corporation 

Dated as of May 28, 2004 

 

  

  

  

 
 

TABLE OF CONTENTS    
    

	Article 1. Definitions	 	1
	 	
 1.1	

Definitions	
 	

1
	

Article 2. the Board of Directors	
 	

3
	 	
 2.1	

Composition of Board of Directors.	
 	

3
	 	2.2	Certificate of Incorporation and By-Laws.	 	6
	 	2.3	Termination of Board Representation Agreements.	 	6
	 	2.4	Intention to Act as a Group.	 	7
	

Article 3. certain access and review rights of stockholders	
 	

7
	 	
 3.1	

Maintenance of Books and Records.	
 	

7
	 	3.2	Access and Review Rights.	 	7
	 	3.3	Confidentiality.	 	7
	

Article 4. COMPLIANCE WITH SECURITIES LAWS	
 	

8
	 	
 4.1	

Compliance with Securities Laws	
 	

8
	 	4.2	Certain Restrictions on Transfer	 	8
	 	4.3	Legends	 	8
	

Article 5. Termination	
 	

8
	 	
 5.1	

Termination	
 	

8
	 	5.2	Effect of Termination	 	9
	

Article 6. Certain Representations and Warranties of the Stockholders	
 	

9
	 	
 6.1	

Mutual Representations and Warranties of the Stockholders.	
 	

9
	 	6.2	Notices	 	10
	 	6.3	Governing Law	 	11
	 	6.4	Effective Date; Entire Agreement	 	11
	 	6.5	Waiver.	 	11
	 	6.6	Amendments	 	11
	 	6.7	Remedies Cumulative; Specific Performance	 	12
	 	6.8	Severability	 	12
	 	6.9	Successors, and Assigns	 	12
	 	6.10	Counterparts	 	12
	 	6.11	Construction.	 	12

i

 
 

THIRD AMENDED AND RESTATED STOCKHOLDER AGREEMENT    
    

        THIS THIRD AMENDED AND RESTATED STOCKHOLDER AGREEMENT (the
"Agreement"), by and among JAZZ SEMICONDUCTOR, INC., a Delaware corporation formerly known as
Specialtysemi, Inc. (the "Company"), CONEXANT SYSTEMS, INC., a Delaware corporation
("Conexant"), CARLYLE PARTNERS III, L.P., a Delaware limited partnership ("CP
III"), CP III COINVESTMENT, L.P., a Delaware limited partnership ("CP III
Coinvestment"), CARLYLE HIGH YIELD PARTNERS, L.P., a Delaware limited partnership ("Carlyle High
Yield" and, together with CP III and CP III Coinvestment, "Carlyle"), and RF MICRO
DEVICES, INC., a North Carolina corporation ("RFMD"), is entered into as of the 28th day of May, 2004. 

 
 

RECITALS    
    

        WHEREAS, the Company, Carlyle, Conexant and RFMD are parties to that certain Second Amended and Restated
Stockholder Agreement dated as of October 15, 2002 (the "Second Amended Stockholder Agreement"); 

        WHEREAS, the Company is contemplating an offering of Common Stock to the general public that is to be effected pursuant to a registration
statement filed with, and declared effective by, the Securities and Exchange Commission under the Securities Act (the "Initial Public Offering"); and 

        WHEREAS, effective as of the date of consummation of the Initial Public Offering (the "Effective
Date"), the Company, Carlyle, Conexant and RFMD wish to amend and fully restate the Second Amended Stockholder Agreement in its entirety as set forth herein. 

 
 

AGREEMENT    
    

        NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties agree as follows: 

 
 

ARTICLE 1.
  DEFINITIONS    
    

        1.1    Definitions.    The following terms used in this Agreement shall have the following meanings (unless otherwise
expressly provided herein): 

        "Affiliate," with respect to any Person or Stockholder, shall mean any other Person or Stockholder directly or indirectly controlling,
controlled by or under common control with, such Person or Stockholder. For purposes of this Agreement, "control" (including with correlative meanings,
the terms "controlling", "controlled by" or "under common control
with") as used with respect to any Person or Stockholder, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and
policies of such Person or Stockholder, whether through the ownership of voting securities or by contract or otherwise. 

        "Agreement" shall mean this Third Amended and Restated Stockholder Agreement, as it may be amended, restated, modified or supplemented
from time to time in accordance with its terms. 

        "Board of Directors" shall mean the Board of Directors of the Company. 

        "Bylaws" shall mean the Bylaws of the Company in effect as of the date hereof, as the same may hereafter be amended from time to time. 

        "Capital Stock" shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of such Person's capital stock or other equity interests, including, without limitation, common stock, preferred stock, partnership interests and
limited liability company interests, whether now outstanding or issued after the date hereof. 

 

        "Carlyle Designees" shall mean (i) the Initial Carlyle Designees and
(ii) such Person or Persons who may hereafter be subsequently designated in writing by the Carlyle Stockholders for nomination to the Board of Directors pursuant to Section 2.1(b). 

        "Carlyle Stockholders" shall mean CPIII, CPIII Coinvestment, Carlyle High Yield and any of
their Permitted Transferees who may hereafter become a holder of shares of Voting Stock of the Company and a party to this Agreement in accordance with its terms. 

        "Certificate of Incorporation" shall mean the Restated Certificate of Incorporation of the Company, as filed with the Secretary of State
of the State of Delaware and in effect as of the date hereof, as the same may hereafter be amended from time to time. 

        "Common Stock" shall mean the common stock of the Company, par value $.001 per share. 

        "Company Confidential Information" shall mean any Intellectual Property, documentation or technical data and any and all other trade
secrets and other confidential proprietary information, data or know-how of the Company or any direct or indirect subsidiary of the Company, or of other Persons (including, without
limitation, any Stockholder) that is in the possession of the Company, including, without limitation, any Intellectual Property, software, system, technology, tools, list of customers, list of
advertisers and/or advertising pricing, business plans, marketing plans, financial information, source codes, programs, inventions, techniques, budgets, projections, licenses, prices, costs, or
compilations of information or databases used in the Company's or any subsidiary's business or operations or any other information of the Company or any subsidiary or concerning their respective
business and operations that is not publicly available. 

        "Conexant Designees" shall mean (i) the Initial Conexant Designees and
(ii) such Person or Persons who may hereafter be subsequently designated in writing by the Conexant Stockholders for nomination to the Board of Directors pursuant to Section 2.1(b). 

        "Conexant Stockholders" shall mean Conexant and any of its Permitted Transferees who may
hereafter become a holder of shares of Voting Stock of the Company and a party to this Agreement in accordance with its terms. 

        "Entity" shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other
enterprise, association, organization or entity. 

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

        "Governmental Body" shall mean any: (a) nation, principality, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction; (b) federal, state, local, municipal or foreign government (including any agency, department, bureau, division, or
other administrative body thereof); or (c) governmental or quasi-governmental authority of any nature. 

        "Intellectual Property" shall mean any and all worldwide (a) rights associated with works of authorship, including copyrights,
moral rights, and mask works; (b) trademark and trade name rights and similar rights; (c) trade secret rights; (d) patents and patent rights; (e) other proprietary rights
in know-how, inventions, ideas, algorithms, formula, methods, processes, techniques, proprietary information, software, semiconductor devices, and other types of technology; and
(f) all registrations, applications, renewals, extensions, combinations, divisions, or reissues of the foregoing. 

        "Legal Requirement" shall mean any federal, state, foreign, local or municipal law, statute, legislation, constitution, ordinance, code,
edict, rule, regulation, ruling, directive, pronouncement, or interpretation issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the
authority of any Governmental Body. 

2

 

        "Nominating Committee" means the governance and nominating committee of the Board of Directors, or similar committee or group of directors
(including the entire Board of Directors) fulfilling the role of a nominating committee. 

        "Percentage Interest" shall mean, as to a Stockholder or group of Stockholders, the percentage of the then outstanding Common Stock that
is represented by the shares of Common Stock held by such Stockholder or group of Stockholders. 

        "Permitted Transferee" shall mean, as to any Stockholder, a transferee or assignee of such Stockholder's Shares that is an Affiliate of
such Stockholder, provided, however, (i) that such Stockholder shall, within ten (10) days after such transfer, furnish to the Company and
the other Stockholders written notice of the name and address of such transferee or assignee and (ii) that such transferee shall have agreed in writing to become a party to, and be bound by the
terms of, this Agreement and shall have executed a supplemental signature page to this Agreement in form and substance reasonably satisfactory to the Company and the other Stockholders. 

        "Person" shall mean any individual, Entity or Governmental Body. 

        "RFMD Designees" shall mean (i) the Initial RFMD Designee and (ii) such
Person or Persons who may be hereafter designated in writing by the RFMD Stockholders for nomination to the Board of Directors pursuant to Section 2.1(b). 

        "RFMD Stockholders" shall mean RFMD and any of its Permitted Transferees who may hereafter
become a holder of shares of Voting Stock of the Company and a party to this Agreement in accordance with its terms. 

        "Sale" (including the correlative terms "Sell," "Selling," and  "Sold") shall mean a sale, exchange,
transfer, assignment, lease, encumbrance, hypothecation, pledge or other transfer or disposition of any kind, with
or without consideration, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors,
whether voluntary or by operation of law, directly or indirectly, of all or any portion of any shares of Common Stock held by any Stockholder. 

        "Securities Act" shall mean the Securities Act of 1933, as amended. 

        "Shares" shall mean the shares of Common Stock held by any Stockholder. 

        "Stockholder" shall mean each of Conexant Stockholders, Carlyle Stockholders and RFMD Stockholders. 

        "Stockholder Director" shall mean any member of the Board of Directors that is a Carlyle Designee, Conexant Designee or RFMD Designee. 

        "Voting Stock" shall mean, with respect to any Person, the Capital Stock of any class or kind ordinarily having the power to vote for the
election of directors, managers or other members of the governing body of such Person. 

 
 

ARTICLE 2.
  THE BOARD OF DIRECTORS    
    

        2.1    Composition of Board of Directors.    

        (a)    Composition of the Board of Directors on the Effective Date.    On the Effective Date,
the Board of Directors shall initially consist of nine (9) members. Effective at the Effective Date, the Company and the Stockholders shall take all action necessary to (i) adopt the
Certificate of Incorporation and the amended and restated bylaws of the Company to read as set forth on Exhibit A and  Exhibit B hereto,
respectively, which, among other things, provide for classification of 

3

 

the
members of the Board of Directors into three (3) classes (Class I, Class II and Class III) and (ii) cause the following Persons to be elected as members of the
Board of Directors of the Company: 

        (A)  Allan M. Holt, Todd R. Newnam and Claudius E. Watts IV (together, the "Initial Carlyle
Designees"), who shall be elected as a Class I director, Class II director and Class III director, respectively; 

        (B)  Donald R. Beall and Dwight W. Decker (together, the "Initial Conexant
Designees"), who shall be elected as a Class II director and Class III director, respectively; 

        (C)  Jerry D. Neal (the "Initial RFMD Designee"), who shall be elected as a
Class III director; 

        (D)  Shu Li, who shall be elected as a Class I director; and 

        (E)  Donald E. Schrock and R. Douglas Norby, who shall be elected as a Class II director and Class I director,
respectively. 

        (b)    Nomination of Stockholder Designees.    

        (i)    So long as this Agreement remains in effect with respect to the Carlyle Stockholders, in connection with each annual or
special meeting of stockholders of the Company at which members of the Board of Directors will be elected, the Company shall, except to the extent required to prevent the Board of Directors from
breaching its fiduciary duties to its stockholders under applicable law, use commercially reasonable efforts to take all such action necessary to nominate for election to the Board of Directors (in
accordance with the procedures set forth in Section 2.1(c)) a number of individuals designated in writing by Carlyle such that, assuming election of such individuals to the Board of Directors,
the Board of Directors shall include three (3) Carlyle Designees; provided that such individuals are reasonably acceptable to the Board of Directors, with the Carlyle Designees abstaining from
the determination of such acceptability. Notwithstanding the foregoing, the aggregate number of Carlyle Designees that the Carlyle Stockholders shall be entitled to designate for nomination to the
Board of Directors shall be reduced to two (2) at such time as the aggregate Percentage Interest of all Carlyle Stockholders is less than 25%, and the aggregate number of Carlyle Designees that
the Carlyle Stockholders shall be entitled to designate for nomination to the Board of Directors shall be reduced to one (1) at such time as the aggregate Percentage Interest of all Carlyle
Stockholders is less than 15%. 

        (ii)   So long as this Agreement remains in effect with respect to the Conexant Stockholders, in connection with each annual or
special meeting of stockholders of the Company at which members of the Board of Directors will be elected, the Company shall, except to the extent required to prevent the Board of Directors from
breaching its fiduciary duties to its stockholders under applicable law, use commercially reasonable efforts to take all such action necessary to nominate for election to the Board of Directors (in
accordance with the procedures set forth in Section 2.1(c)) a number of individuals designated in writing by Conexant such that, assuming election of such individuals to the Board of Directors,
the Board of Directors shall include two (2) Conexant Designees; provided that such individuals are reasonably acceptable to the Board of Directors with the Conexant Designees abstaining from
the determination of such acceptability. Notwithstanding the foregoing, the aggregate number of Conexant Designees that the Conexant Stockholders shall be entitled to designate for nomination to the
Board of Directors shall be reduced to one (1) at such time as the aggregate Percentage Interest of all Conexant Stockholders is less than 15%. 

4

 

        (iii) So long as this Agreement remains in effect with respect to the RFMD Stockholders, in connection with each annual or
special meeting of stockholders of the Company at which members of the Board of Directors will be elected, the Company shall, except to the extent required to prevent the Board of Directors from
breaching its fiduciary duties to its stockholders under applicable law, use commercially reasonable efforts to take all such action necessary to nominate for election to the Board of Directors (in
accordance with the procedures set forth in Section 2.1(c)) one (1) individual designated in writing by the RFMD Stockholders to the extent necessary to cause the Board of Directors to
include one (1) RFMD Designee; provided that such individual is reasonably acceptable to the Board of Directors, with the RFMD Director abstaining from the determination of such acceptability. 

        (c)    Nominating and Designation Procedures.    Not less than
45 days prior to the mailing by the Company to its stockholders of written notice of any annual or special meeting of the stockholders of the Company at which members of the Board of Directors
will be elected, the Company shall deliver to each of the Stockholders a written notice (an "Election Notice") (i) specifying the date of such
meeting of stockholders and (ii) indicating the number (if any) of Carlyle Designees, Conexant Designees and RFMD Designees that the respective Stockholders are entitled to designate for
nomination for election to the Board of Directors at such meeting of stockholders. Each Stockholder or group of Stockholders entitled to designate nominees for election to the Board of Directors at
such meeting shall provide written notice (a "Nomination Notice") to the Board of Directors setting forth the names of the individuals so designated by
such Stockholder or group of Stockholders within 15 days of receipt of the Election Notice. Each individual designated as a nominee for the Board of Directors pursuant to Section 2.1
shall be nominated for such position by the Nominating Committee unless (i) the Nominating Committee, in the exercise of its fiduciary duties, shall determine that such designee is not
qualified to serve on the Board of Directors or (ii) the Board of Directors or the Nominations Committee otherwise determines that such nomination would constitute a breach of its fiduciary
duties under applicable law, or (iii) a majority of the members of the Board of Directors other than the designees of the designating Stockholder reasonably determines such designee not to be
acceptable as provided in Section 2.1(b) or (iv) the operation of this Section 2.1 violates any applicable Legal Requirement. If the Nominating Committee shall determine that such
designee is not so qualified or the Board of Directors should determine that such designee cannot be nominated for election to the Board of Directors consistent with the exercise of fiduciary duties
of the Board of Directors, the Company shall notify the designating Stockholder in writing within 15 days of the date of the applicable Nomination Notice and shall provide such designating
Stockholder with the opportunity to specify one or more additional designees pursuant to Section 2.1(b) who shall become nominees, subject to the qualification and other requirements set forth
in this Section 2.1(c). In the event that any Stockholder or Group of Stockholders does so designate an additional designee for consideration of the Nominating Committee and the Board of
Directors, such designee shall replace the prior designee of such Stockholder or group of Stockholders and shall constitute the designee of such Stockholder or group of Stockholders for nomination for
election to the Board of Directors at such meeting. 

        (d)    Solicitation and Voting of Shares.    The Company shall use
commercially reasonable efforts to solicit from stockholders of the Company eligible to vote for the election of members of the Board of Directors proxies in favor of the nominees designated in
accordance with Section 2.1(b). 

        (e)    Agreement to Vote.    Each Stockholder agrees to vote all
shares of Voting Stock of the Company beneficially owned by such Stockholders at any meeting called for the election of members of the Board of Directors, and to execute any written consent related to
the election of members of the Board of Directors, in favor of the election of the Carlyle Designees, Conexant 

5

 

Designees,
and the RFMD Designees designated by the Stockholders for election to the Board of Directors as provided in Section 2.1(b), whether or not such individual is so nominated by the
Board of Directors. 

        (f)    Vacancies.    Upon the death, disability, resignation or
removal of a Stockholder Director, the Stockholder or group of Stockholders that designated such Stockholder Director shall be entitled to designate a replacement Stockholder Director to fill such
vacancy (such designee being referred to as a "Replacement Director Designee"). Upon designation of such Replacement Director Designee, the Board of
Directors shall, appoint such Replacement Director Designee to fill the vacancy created by such death, disability, resignation or removal of the Stockholder Director in question except to the extent
that (i) the Nominating Committee, in the exercise of its fiduciary duties, shall determine that such appointment is not qualified to serve on the Board of Directors, (ii) the Board of
Directors or the Nominating Committee otherwise determines that such appointment would constitute a breach of its fiduciary duties under applicable laws, (iii) a majority of the members of the
Board of Directors other than the designees of the Stockholder that designated such Replacement Director Designee reasonably determines such Replacement Director Designee not to be acceptable as
provided in Section 2.1(b) or (iv) the operation of this Section 2.1 violates any applicable Legal Requirement. 

        (g)    Agreements to Effect Resignation.    

        (i)    In the event that the Percentage Interest of either the Carlyle Stockholders or the Conexant Stockholders is such that
there are more Carlyle Designees or Conexant Designees on the Board of Directors than the Carlyle Stockholders or the Conexant Stockholders, as the case may be, has the right to designate pursuant to
Section 2.1(b)(i) or Section 2.1(b)(ii), respectively, upon the written request of the Board of Directors, the Carlyle Stockholders or the Conexant Stockholders, as applicable,
shall cause a number of Carlyle Designees or Conexant Designees, as the case may be, to resign from their position as members of the Board of Directors to the extent necessary to cause the number of
Carlyle Designees or Conexant Designees, as the case may be, serving as members of the Board of Directors to equal the number of members of the Board of Directors that the Carlyle Stockholders or the
Conexant Stockholders, as the case may be, then are entitled to designate pursuant to Section 2.1(b)(i) or Section 2.1(b)(ii) hereof, as applicable. 

        (ii)   In the event the rights and obligations of any Stockholders or group of Stockholders under this Agreement are terminated
pursuant to Section 5.1(b) or Section 5.1(c), upon the written request of the Board of Directors, such Stockholder shall cause the resignation of the Stockholder Directors designated by
such Stockholder. 

        (h)    Exchange or Other Requirements.    If any Legal Requirements or
the rules of the principal exchange or quotation system on which the Common Stock is listed or traded requires a different composition of the Board of Directors or any committee thereof than that
provided in this Article 2 or otherwise requires modification to this Agreement, the composition of the Board of Directors or any committee thereof or the terms of this Agreement, as
applicable, will be modified to reflect such rules; provided that the members of the Board of Directors or committee, as the case may be, will be
designated, as closely as possible, so as to give effect to the provisions of this Article 2. 

        2.2    Certificate of Incorporation and By-Laws.    The Company and the Stockholders shall take or cause
to take all lawful action necessary to ensure at all times that the Certificate of Incorporation and Bylaws are not, at any time, inconsistent with the provisions of this Agreement. 

        2.3    Termination of Board Representation Agreements.    Effective as of the Effective Date, the following agreements
among the Company, Newport Fab, LLC ("Newport Fab"), Carlyle, Conexant and 

6

 

RFMD,
shall automatically terminate and cease to be of any force or effect: (i) that certain Second Amended and Restated Carlyle Board Representation Agreement dated as of October 15,
2002, by and among the Company, Newport Fab, Carlyle, Conexant and RFMD, (ii) that certain Second Amended and Restated Conexant Board Representation Agreement dated as of October 15,
2002, by and among the Company, Newport Fab, Carlyle, Conexant and RFMD and (iii) that certain RFMD Board Representation Agreement dated as of October 15, 2002, by and among the Company,
Newport Fab, Carlyle, Conexant and RFMD. 

        2.4    Intention to Act as a Group.    Each Stockholder is entering into this Agreement with the intent to act as
members of a group (within the meaning of Section 13(d) of the Exchange Act) with the other Stockholders with respect to the voting of shares of Common Stock for election of members of the
Board of Directors so long as the obligations of such Stockholder under Section 2.1(e) to this Agreement remain in effect. 

 
 

ARTICLE 3.
  CERTAIN ACCESS AND REVIEW RIGHTS OF STOCKHOLDERS    
    

        3.1    Maintenance of Books and Records.    So long as this Agreement remains in effect, the Company shall, and shall
cause its subsidiaries to, keep proper books and records and account in which full and correct entries shall be made of all financial transactions and the assets of the business of the Companies and
its subsidiaries in accordance with United States generally accepted accounting principles ("GAAP"), to the extent GAAP is applicable. 

        3.2    Access and Review Rights.    So long as this Agreement remains in effect, (i) the Company shall, and
shall cause its subsidiaries to, provide each Stockholder with reasonable access to all books and records of the Company and its subsidiaries, including, without limitation, financial data (including
projections) and operating data covering the business, operations and financial performance of the Company and its subsidiaries, and (ii) each Stockholder shall have the right to consult from
time-to-time with management of the Company and its subsidiaries at their places of business regarding operating and financial matters. Notwithstanding any provision hereof to
the contrary, the Company reserves the right to exclude any Stockholder (including any Stockholder Director designated for nomination by such Stockholder), from access to any material or information
or meeting or portion thereof if the Company believes that such exclusion is necessary or appropriate to
preserve attorney-client privilege or to protect Company Confidential Information that the Company reasonably believes may be used by such Stockholder in a manner adverse to the Company or its
Stockholders if the exercise of such right would not limit such Stockholder's rights under applicable law. 

        3.3    Confidentiality.    

        (a)   Each Stockholder agrees that, except as may be required to be disclosed pursuant to the Exchange Act or the Securities
Act (other than any disclosure required under the Exchange Act or Securities Act solely as a result of any Stockholder's trading in, or desire to trade in, any securities of the Company) and except as
permitted by Section 3.3(b) below, such Stockholder will not during the term of this Agreement or thereafter, (i) disclose, directly or indirectly, to any Person (other than to its
Affiliates, subsidiaries, employees and/or agents) or (ii) use (other than in connection with such Stockholder's proper performance of its obligations hereunder or otherwise in connection with
such Stockholder's investment in the Company), any Company Confidential Information. 

        (b)   Each Stockholder agrees to protect, and to cause its Stockholder Directors to protect, Company Confidential Information
in such Stockholder's possession subject to Section 3.3(a) to a degree and in a manner consistent with protection that it gives to its own confidential or proprietary information and to take
any and all actions reasonably necessary or appropriate to insure the continued confidentiality and protection of such information. In the event that any 

7

 

Stockholder
is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the
confidential information that it has agreed to keep confidential hereunder, (i) such Stockholder shall promptly notify the Company of such requested or required disclosure in order to permit
the Company to seek a protective order and (ii) such Stockholder shall be permitted to disclose such Company Confidential Information, provided that it will provide the Company and each other
Stockholder with prompt notice of such request so that the Company and/or any other Stockholder may seek an appropriate protective order. In the event that such protective order or other remedy is not
obtained, such Stockholder agrees that it will furnish only that portion of any confidential information that is legally required and will exercise its reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded to that portion of any confidential information being disclosed. 

 
 

ARTICLE 4.
  COMPLIANCE WITH SECURITIES LAWS    
    

        4.1    Compliance with Securities Laws.    Each Stockholder agrees not to Sell any portion of its shares of Common
Stock unless and until (i) there is then in effect a registration statement under the Securities Act covering such proposed Sale and such Sale is made in accordance with such registration
statement or (ii) such Sale is exempt from the registration requirements of the Securities Act. 

        4.2    Certain Restrictions on Transfer.    No Stockholder shall Sell any shares of Common Stock to any Affiliate of
such Stockholder unless such Affiliate shall have agreed in writing to become a party to, and be bound by, this Agreement and has executed a supplemental signature page to this Agreement in form and
substance reasonably satisfactory to the Company and the other Stockholders. 

        4.3    Legends.    Each certificate representing shares of Common Stock held of record by any Stockholder shall be
stamped or otherwise imprinted with legends substantially similar to the following (in addition to any legend required under applicable state securities laws): 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN
COMPLIANCE THEREWITH. 

The
Company shall be obligated to issue promptly certificates without the legend listed above at the request of any holder thereof if the holder shall have obtained an opinion of counsel (which
counsel may be counsel to the Company) reasonably acceptable to the Company, to the effect that the securities proposed to be Sold may lawfully be so Sold without registration, qualification or such
legend. Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt
by the Company of an order of the appropriate blue sky authority authorizing such removal. 

 
 

ARTICLE 5.
  TERMINATION    
    

        5.1    Termination.    Notwithstanding anything to the contrary contained in this Agreement: 

        (a)   This Agreement shall be terminated by mutual written consent of the Conexant Stockholders, the Carlyle Stockholders and
the RFMD Stockholders. 

        (b)   The rights and obligations of the Carlyle Stockholders under this Agreement shall automatically terminate at such time as
the Carlyle Stockholder's aggregate Percentage Interest is less than five percent (5%). The rights and obligations of the Conexant Stockholders under this Agreement shall automatically terminate at
such time as the Conexant Stockholders' aggregate 

8

 

Percentage
Interest is less than five percent (5%). The rights and obligations of the RFMD Stockholders under this Agreement shall automatically terminate at such time as the RFMD Stockholders'
aggregate Percentage Interest is less than five percent (5%). 

        (c)   Any of the Carlyle Stockholders, the Conexant Stockholders or the RFMD Stockholders, respectively, may terminate their
rights and obligations under this Agreement upon written notice to the Company and the other Stockholders during any period in which the aggregate Percentage Interest of such Carlyle Stockholders,
such Conexant Stockholders or such RFMD Stockholders, as the case may be, is less than ten percent (10%) but more than five percent (5%). 

        5.2    Effect of Termination.    

        (a)   If this Agreement is terminated pursuant to Section 5.1(a), all further obligations of the parties under this
Agreement shall terminate, except that no party shall be relieved of any obligation or other liability arising from any breach by such party of any provision of this Agreement occurring prior to the
date of such termination. 

        (b)   If the rights and obligations of any Stockholder are terminated pursuant to Section 5.1(b) or
Section 5.1(c), all references to such Stockholder in this Agreement shall be deemed to be deleted and all further obligations of such Stockholder under this Agreement shall terminate, except
that: (a) such Stockholder shall not be relieved of any obligation or other liability arising from any breach by such Stockholder of any provision of this Agreement occurring prior to the date
of such termination and (b) such Stockholder shall comply with its obligations under Section 2.1(g). 

 
 

ARTICLE 6.
  CERTAIN REPRESENTATIONS AND
  WARRANTIES OF THE STOCKHOLDERS    
    

        6.1    Mutual Representations and Warranties of the Stockholders.    As of the date hereof, each Stockholder hereby
represents, warrants and covenants to the Company and to the other Stockholders that: 

        (a)    Organization.    The Stockholder is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation with all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. 

        (b)    Enforceability.    This Agreement constitutes the legal, valid and binding obligation
of the Stockholder enforceable against such Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights generally and subject, as to enforceability, to general principles of equity. 

        (c)    Consents.    No consents or approvals are required from any Governmental Body or other
Person for the Stockholder to enter into this Agreement. All corporate action on the part of such Stockholder necessary for the authorization, execution and delivery of this Agreement and the
performance by such Stockholder of its obligations hereunder have been duly taken. 

        (d)    No Conflict.    The execution and delivery of this Agreement by the Stockholder and the
performance by such Stockholder of its obligations hereunder by the Stockholder do not conflict with or contravene the provisions of its organizational documents or any material agreement or
instrument by which it or its properties are bound or any Legal Requirement to which it or its properties are subject. 

        (e)    No Litigation.    There are no actions, suits or proceedings pending or, to the
Stockholder's knowledge, threatened, against the Stockholder before any court or governmental 

9

 

agency
that question the Stockholder's right to enter into or perform this Agreement or that question the validity of this Agreement. 

        6.2    Notices.    Any notice or other communication required or permitted to be delivered to any party under this
Agreement shall be in writing and shall be deemed properly delivered, given and received when delivered (by hand, by registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written notice
given to the other parties hereto): 

        if
to the Company: 

Jazz
Semiconductor, Inc.

4321 Jamboree Road

Newport Beach, CA 92660

Attn: Shu Li

Facsimile: (949) 435-8455 

        with
a copy to: 

Jazz
Semiconductor, Inc.

4321 Jamboree Road

Newport Beach, CA 92660

Attn: Carolyn Follis, Esq.

Facsimile: (949) 435-8455 

        if
to the Carlyle Stockholders:: 

The
Carlyle Group

101 S. Tryon Street

25th Floor

Charlotte, NC 28280

Attn: Claudius E. Watts IV

Facsimile: (704) 632-0299 

        with
a copy to: 

Latham &
Watkins

555 11th Street N.W., Suite 1000

Washington, DC 20004-1304

Attn: Daniel T. Lennon, Esq.

Facsimile: (202) 637-2201 

        if
to the Conexant Stockholders: 

Conexant
Systems, Inc.

4000 MacArthur Blvd.

Newport Beach, CA 92660

Attn: Chief Legal Officer

Facsimile: (949) 483-9576 

        with
a copy to: 

Cooley
Godward LLP

4401 Eastgate Mall

San Diego, CA 92121

Attn: Carl R. Sanchez, Esq.

Facsimile: (858) 550-6420 

10

 

        if
to the RFMD Stockholders: 

RF
Micro Devices, Inc.

7628 Thorndike Road

Greensboro, NC 27409-9421

Attn: Suzanne Rudy

Facsimile: (336) 931-7655 

        with
a copy to: 

Womble
Carlyle Sandridge & Rice, PLLC

One West Fourth Street

Winston-Salem, NC 27101

Attn: Jeffrey C. Howland, Esq.

Facsimile: (336) 733-8371 

        6.3    Governing Law.    This Agreement shall be construed in accordance with, and governed in all respects by, the
internal laws of the State of Delaware (without giving effect to principles of conflicts of laws). 

        6.4    Effective Date; Entire Agreement.    Until the Effective Date occurs, this Agreement will not be effective or
binding upon the parties hereto. Upon the occurrence of the Effective Date, this Agreement will automatically amend, restate and supersede the Second Amended Stockholder Agreement in its entirety, and
the Second Amended Stockholder Agreement shall terminate. Notwithstanding anything to the contrary contained in this Agreement, if the Effective Date does not occur by December 31, 2004, this
Agreement will automatically terminate on such date. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 

        6.5    Waiver.    

        (a)   No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay
on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. 

        (b)   No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or
remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and
any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. 

        6.6    Amendments.    

        (a)   This Agreement may be amended, modified, altered or supplemented only by means of a written instrument duly executed and
delivered on behalf of the Company, the Conexant Stockholders, the Carlyle Stockholders and the RFMD Stockholders. 

        (b)   Notwithstanding Section 6.6(a) hereof, Permitted Transferees may become parties to this Agreement, as provided for
herein, and upon compliance with the requirements set forth in the definition of "Permitted Transferee", such Permitted Transferee shall be deemed a Stockholder for all purposes hereunder. 

11

 

        6.7    Remedies Cumulative; Specific Performance.    The rights and remedies of the parties hereto shall be cumulative
(and not alternative). The parties hereto agree that: (a) in the event of any breach or threatened breach by any party of any covenant, obligation or other provision set forth in this
Agreement, the other parties shall be entitled (in addition to any other remedy that may be available to it) to (i) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision, and (ii) an injunction restraining such breach or threatened breach; and (b) such other parties shall not be
required to provide any bond or other security in connection with any such decree, order or injunction or in connection with any related action or proceeding. 

        6.8    Severability.    In the event that any provision of this Agreement, or the application of any such provision to
any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons
or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and
enforceable to the fullest extent permitted by law. 

        6.9    Successors, and Assigns.    Each and all of the covenants, terms, provisions, and agreements contained in this
Agreement shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Agreement, their respective permitted successors and assigns. Neither the Company
nor any Stockholder may assign their respective rights or obligations under this Agreement (by operation of law or otherwise) to any Person (other than to a Permitted Transferee) without the prior
written consent of the Company and the other Stockholders. This Agreement does not bind any subsequent transfer of any shares of Common Stock other than any Permitted Transferee that becomes a party
to this Agreement. 

        6.10    Counterparts.    This Agreement may be executed in several counterparts, each of which shall constitute an
original and all of which, when taken together, shall constitute one agreement. 

        6.11    Construction.    

        (a)   For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice
versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include the masculine and
feminine genders. 

        (b)   The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of this Agreement. 

        (c)   As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms
of limitation, but rather shall be deemed to be followed by the words "without limitation." 

        (d)   Except as otherwise indicated, all references in this Agreement to "Sections" and "Exhibits" are intended to refer to
Sections of this Agreement and Exhibits to this Agreement. 

[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

12

   
        IN WITNESS WHEREOF, the undersigned have executed this THIRD AMENDED AND RESTATED STOCKHOLDER
AGREEMENT as of the date first above written. 

	 	 	JAZZ SEMICONDUCTOR, INC.,

a Delaware corporation
	

 	
 	

By:	

/s/  SHU LI      
 Name: Shu Li

Title: President and Chief Executive Officer
	

 	
 	
CONEXANT SYSTEMS, INC.,

a Delaware corporation
	

 	
 	

By:	

/s/  DENNIS O'REILLY      
 Name: Dennis O'Reilly

Title: Sr. V.P., Chief Legal Officer & Secretary
	

 	
 	
CARLYLE PARTNERS III, L.P.,

a Delaware limited partnership
	

 	
 	

By:	

TC Group III, L.P.,

its General Partner
	

 	
 	

By:	

TC Group III, L.L.C.,

its General Partner
	

 	
 	

By:	

TC Group, L.L.C.,

its Managing Member
	

 	
 	

By:	

TCG Holdings, L.L.C.,

its Managing Member
	

 	
 	

 	

By:	

/s/  ALLAN M. HOLT      
 Name: Allan M. Holt

Title:

S-1

 

	

 	
 	
CP III COINVESTMENT, L.P.,

a Delaware limited partnership
	

 	
 	

By:	

TC Group III, L.P.,

its General Partner
	

 	
 	

By:	

TC Group III, L.L.C.,

its General Partner
	

 	
 	

By:	

TC Group, L.L.C.,

its Managing Member
	

 	
 	

By:	

TCG Holdings, L.L.C.,

its Managing Member
	

 	
 	

 	

By:	

/s/  ALLAN M. HOLT      
 Name: Allan M. Holt

Title:
	

 	
 	
CARLYLE HIGH YIELD PARTNERS, L.P.,

a Delaware limited partnership
	

 	
 	

By:	

TCG High Yield, L.L.C.,

its General Partner
	

 	
 	

By:	

TCG High Yield Holdings, L.L.C.,

its Managing Member
	

 	
 	

By:	

TC Group, L.L.C.,

its sole Member
	

 	
 	

By:	

TCG Holdings, L.L.C.,

its Managing Member
	

 	
 	

 	

By:	

/s/  ALLAN M. HOLT      
 Name: Allan M. Holt

Title:

S-2

 

	 	 	RF MICRO DEVICES, INC.,

a North Carolina corporation
	

 	
 	

By:	

/s/  JERRY D. NEAL      
 Name: Jerry D. Neal

Title: EVP, Marketing & Strategic Development

S-3

EXHIBIT A  

 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION  

 
 

AMENDED AND RESTATED
  CERTIFICATE OF INCORPORATION
  OF
  JAZZ SEMICONDUCTOR, INC.    
    

        Jazz Semiconductor, Inc., a corporation organized and existing under the laws of the State of Delaware (hereinafter referred to as the
"Corporation"), hereby certifies as follows: 

        1.     The
Corporation filed its original Certificate of Incorporation (the "Original Certificate of Incorporation") with the
Secretary of State of the State of Delaware (the "Delaware Secretary of State") on February 15, 2002 under the name "Jazz Semiconductor Systems, Inc." 

        2.     This
Amended and Restated Certificate of Incorporation of the Corporation (the "Amended and Restated Certificate of
Incorporation") has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware by the directors
and stockholders of the Corporation. This Amended and Restated Certificate of Incorporation restates, amends and supercedes the provisions of the Original Certificate of Incorporation and all prior
amendments and restatements of the Certificate of Incorporation. 

        3.     The
Certificate of Incorporation of the Corporation shall be amended and restated to read in its entirety as follows: 

I.  

        The name of this corporation is Jazz Semiconductor, Inc. 

II.  

        The address of the registered office of the Corporation in the State of Delaware is 9 East Loockerman Street, City of Dover, County of Kent, and the name
of the registered agent of the Corporation in the State of Delaware at such address is National Registered Agents, Inc. 

III.  

        The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State
of Delaware ("DGCL"). 

IV.  

        A.    CLASSES OF STOCK.    The Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number of shares of stock that the Corporation shall have authority to issue is One Hundred Eighty-Three Million Three Hundred
Thirty-Three Thousand Three Hundred Thirty-Three (183,333,332), of which (i) One Hundred Sixty-Six Million Six Hundred Sixty-Six Thousand Six Hundred
Sixty-Six (166,666,666) shares shall be Common Stock, $0.001 par value per share (the "Common Stock") and (ii) Sixteen Million Six
Hundred Sixty-Six Thousand Six Hundred Sixty-Six (16,666,666) shares shall be shares of Preferred Stock, $0.001 par value per share (the "Preferred
Stock"). 

        B.    PREFERRED STOCK.    Subject to the limitations and in the manner provided by law, the
Board of Directors of the Corporation (the "Board of Directors") or a duly-authorized committee of the Board of Directors, in accordance
with the laws of the State of Delaware, is hereby authorized to, from time to time, provide by resolution for the issuance of shares of Preferred Stock in one or more series and, by filing a
certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as "Preferred Stock Designation"), setting forth such
resolution, to establish the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications,
limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: (i) the designation of
the series, which may be by distinguishing number, letter or title; 

 

(ii) the
number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not
below the number of shares thereof then outstanding); provided that, in case the number of shares of any series shall be so decreased, the shares constituting such decrease shall upon the taking of
any action required by applicable law resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series as well as the number of shares
authorized for issuance in each series; (iii) the amounts or rates at which dividends will be payable on, and the preferences, if any, of shares of the series in respect of dividends, and
whether such dividends, if any, shall be cumulative or noncumulative; (iv) dates at which dividends, if any, shall be payable; (v) the redemption rights and price or prices, if any, for shares
of the series; (vi) the terms and amount of any sinking fund, if any, provided for the purchase or redemption of shares of the series; (vii) the amounts payable on, and the preferences,
if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation; (viii) whether the shares of the series
shall be convertible into, or exchangeable, or redeemable for, shares of any other class or series, or any other security, of the Corporation or any other Corporation, and, if so, the specification of
such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or
exchangeable and all other terms and conditions upon which such conversion or exchange may be made; (ix) the voting rights, if any, of the Holders of shares of the series generally or upon
specified events; (x) any other rights, powers, preferences of such shares as are permitted by law. 

V.  

        For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of
the Corporation, of its Board of Directors and of its stockholders or any class thereof, as the case may be, it is further provided that: 

        A.    BOARD OF DIRECTORS.    

        1.    POWERS; NUMBER OF DIRECTORS.    The management of the business
and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by the Board of
Directors in the manner provided in the bylaws of the Corporation. 

        2.    ELECTION OF DIRECTORS.    The Board of Directors shall be
divided into three classes, designated Class I, Class II and Class III. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the
Board of Directors such that Class I, Class II and Class III shall each consist of an equal number of Directors to the extent practicable. At the first annual meeting of
stockholders following the Effective Date, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second
annual meeting of stockholders following the Effective Date, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three
years. At the third annual meeting of stockholders following the Effective Date, the term of office of the Class III directors shall expire and Class III directors shall be elected for a
full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such
annual meeting. 

        If
the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain a number of directors in each class as nearly equal as possible,
and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but
in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his or her term expires
and until 

2

 

his
or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. 

        3.    REMOVAL OF DIRECTORS.    

        a.     Neither the Board of Directors nor any individual director may be removed without cause. 

        b.     Subject to any limitation imposed by law, any director may be removed with cause by the holders of at least 75% of the
voting power of the Corporation entitled to vote at an election of directors. 

        4.    VACANCIES.    Any vacancies on the Board of Directors resulting
from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall be filled by a majority of the
members of the Incumbent Board then in office, even though less than a quorum of the Board of Directors, and not by the stockholders. The newly created
or eliminated directorships resulting from such increase or decrease shall, if reasonably possible, be apportioned by the Board of Directors among the three classes of directors so as to ensure that
no one class has more than one director more than any other class. To the extent reasonably possible, consistent with the foregoing, any newly created directorships shall be added to those classes
whose terms of office are to expire at the latest dates following such allocation and newly eliminated directorships shall be subtracted from those classes whose terms of office are to expire at the
earliest dates following such allocation, unless otherwise provided for from time to time by resolution adopted by a majority of the members of the Incumbent Board then in office, although less than a
quorum. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board of Directors until the vacancy is
filled. Any director elected in accordance with this section shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such
director's successor shall have been elected and qualified. The "Incumbent Board" shall mean those directors of the Corporation who, as of the Effective Date, constitute the Board of Directors of the
Corporation, provided that (i) any person becoming a director subsequent to such date whose election, or nomination for election by the Corporation's stockholders, is approved by a vote of at
least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the Corporation, as such terms are used Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended) or (ii) any person appointed by the Incumbent Board to fill a vacancy, shall also be considered a member of the Incumbent Board of the Corporation. 

        B.    ACTION BY STOCKHOLDERS.    

        1.     Special meetings of the stockholders of the Corporation, for any purpose or purposes, may be called at any time by a
majority of the Board of Directors, the Chairman of the Board of Directors or the President of the Corporation. Special meetings of the stockholders of the Corporation may not be called by any other
person or persons. 

        2.     No action shall be taken by the stockholders of the Corporation except at duly called annual or special meeting of
stockholders of the Corporation. 

        3.     No action shall be taken by the stockholders by written consent in lieu of a meeting. 

        4.     Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders
before any meeting of the stockholders of the Corporation shall be given in the manner provided in the bylaws of the Corporation. 

3

 

        C.    BYLAWS    

        1.     In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors
is expressly authorized to make, adopt, alter, amend, change or repeal the bylaws of the Corporation by resolutions adopted by the affirmative vote of a majority of the entire Board of Directors,
subject to any bylaw requiring the affirmative vote of a larger percentage of the members of the Board of Directors. 

        2.     Stockholders may not make, adopt, alter, amend, change or repeal the bylaws of the Corporation except upon the affirmative
vote of at least 75% of the votes entitled to be cast by the holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class. 

VI.  

        The Corporation is to have perpetual existence. 

VII.  

        A.    The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by
paragraph (7) of subsection (b) of Section 102 of the DGCL, as the same may be amended or supplemented. 

        B.    If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. 

        C.    The Corporation shall have power, to the fullest extent permitted by Section 145 of the DGCL, as the same may be
amended or supplemented, to indemnify any person by reason of the fact that the person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. 

        D.    Indemnification conferred pursuant to this Article VII shall include the right to be paid by the Corporation the
expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition upon receipt by the Corporation of an undertaking by or on behalf of the person
receiving advancement to repay the amount advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation under this Article VII. 

        E.    Neither any amendment nor repeal of this Article VII, nor the adoption of any provision of this Corporation's
Certificate of Incorporation inconsistent with this Article VII, shall eliminate or reduce the effect of this Article VII in respect of any matter occurring, or any action or proceeding
accruing or arising or that, but for this Article VII, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision. 

VIII.  

        A.    The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated
Certificate of Incorporation, in the manner now or hereafter prescribed 

4

 

by
statute, and all rights conferred upon the stockholders herein are granted subject to this reservation. Notwithstanding the foregoing, no amendment, alteration, change or repeal may be made to
Article V or this Article VIII without the affirmative vote of the holders of at least 75% of the outstanding voting power of the Corporation, voting together as a single class. 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 

5

 

        IN
WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Shu Li, its President and Chief Executive Officer, and attested by
Mark S. Becker, its Vice President, Finance, Chief Financial Officer, Treasurer and Secretary, this    day of            , 200    . 

	 	 	 	    
 Shu Li

President and Chief Executive Officer
	

    	

 	
 	

 	

 
	

ATTEST:	
 	

 	

 
	

By:	

    
 Mark S. Becker

Vice President, Finance, Chief Financial Officer, Treasurer and Secretary	
 	

 	

 

6

EXHIBIT B  

 AMENDED AND RESTATED BYLAWS  

   

   

   

   

   

   

   

   

 
 

Amended and Restated    
    
    BYLAWS    
    
    OF    
    
    JAZZ SEMICONDUCTOR, Inc.
  (A DELAWARE CORPORATION)    
    

          

   

   

   

   

   

  

Amended and Restated  

 BYLAWS  

 OF  

 JAZZ SEMICONDUCTOR, inc.

(A DELAWARE CORPORATION)  

 
 

ARTICLE I    
    
    OFFICES    
    

        Section 1.    Registered Office.    The registered office of Jazz Semiconductor, Inc. (the
"Corporation") in the State of Delaware shall be in the City of Dover, County of Kent. 

        Section 2.    Other Offices.    The Corporation shall also have and maintain an office or principal place of
business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time
to time determine or the business of the Corporation may require. 

 
 

ARTICLE II    
    
    CORPORATE SEAL    
    

        Section 1.    Corporate Seal.    The Board of Directors may adopt a corporate seal. The corporate seal shall
consist of a die bearing the name of the Corporation, the year of its organization, and the inscription, "Corporate Seal-Delaware." Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise. 

 
 

ARTICLE III    
    
    STOCKHOLDERS' MEETINGS    
    

        Section 2.    Location of Meetings.    Meetings of stockholders shall be held at any place within or outside
the State of Delaware designated by the Board of Directors. In the absence of any such designation, stockholders' meetings shall be held at the principal executive office of the Corporation. 

        Section 3.    Notice of Stockholders' Meetings.    Whenever stockholders are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given, which notice shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes
for which the meeting is called. The written notice of any meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the
meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the Corporation. 

        Section 4.    Annual Meetings of Stockholders.    

        (a)   The annual meeting of stockholders shall be held each year on a date and a time designated by the Board of Directors. At
each annual meeting directors shall be elected and only such other business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting,
business (including the nominations of persons for election to the Board of Directors of the Corporation and any other business to be considered by the stockholders) must be (i) specified in
the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise brought before the meeting by or at 

1

 

the
direction of the Board of Directors or (iii) otherwise properly brought before the meeting by any stockholder of the Corporation. 

        (b)   For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to
clause (iii) of paragraph (a) of this Section 3, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice (a "Stockholder Notice") shall be delivered to or mailed and received at the principal executive offices of
the Corporation not later than the close of business on the ninetieth day nor earlier than the close of business on the one hundred twentieth day prior to the first anniversary of the preceding year's
annual meeting (provided, however, that in the event that the date of the annual meeting is more than thirty days before or more than seventy days after such anniversary date, the Stockholder Notice
must be so delivered not earlier than the close of business on the one hundred twentieth day prior to such annual meeting and not later than the close of business on the later of the ninetieth day
prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event shall the public announcement of
an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a Stockholder Notice as described above. Such Stockholder Notice shall set
forth: (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Rule 14a-11 thereunder (and such person's written consent to being named in the proxy statement as a nominee and to serving as a director if
elected); (ii) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the
proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of
the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the
proposal is made; and (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial owner, (B) the class and number of shares of capital stock of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner, (C) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to propose such business or nomination, (D) any material interest of the stockholder in such business and (E) a representation whether the
stockholder or the beneficial owner, if any, intends, or is part of a group which intends to: (1) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the
Corporation's outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or
(2) otherwise solicit proxies from stockholders in support of such proposal or nomination. The Corporation may require any proposed nominee to furnish such other information as it may
reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation. 

        (c)   Notwithstanding anything in the second sentence of paragraph (b) of this Section 3 to the contrary, in the
event that the number of directors to be elected to the Board of Directors of the Corporation at an annual meeting is increased and there is no public announcement by the Corporation naming all of the
nominees for director or specifying the size of the increased Board of Directors at least one hundred days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice
required by this Section 3 shall also be considered timely, but only 

2

 

with
respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of
business on the tenth day following the day on which such public announcement is first made by the Corporation. 

        (d)   For purposes of this Section 3 and Section 4, "public announcement" shall mean disclosure in a press
release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act. 

        Section 5.    Special Meetings.    

        (a)   Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may only be
called in accordance with the provisions of the Certificate of Incorporation. Business transacted at any special meeting of stockholders shall be limited to only such business brought before the
meeting pursuant to the Corporation's notice of meeting. 

        (b)   Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected (1) by or at the direction of the Board of Directors in accordance with the Certificate of Incorporation or (2) provided that the Board of Directors has
specified in its notice of meeting that directors shall be elected at such meeting, by any stockholder of the Corporation who provides a timely Stockholder Notice to the Secretary of the Corporation
that complies with the notice procedures set forth in paragraph (b) of Section 3. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or
more directors to the Board of Directors, any such stockholder of the Corporation entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to
such position(s) as specified in the Corporation's notice of meeting, if the Stockholder Notice required by this paragraph (b) of this Section 4 shall be delivered to the Secretary at
the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth day prior to such special meeting and not later than the close of business on the
later of the ninetieth day prior to such special meeting, or
the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In
no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as
described above. 

        Section 6.    Compliance with Procedures.    Only such persons who are nominated in accordance with the
procedures set forth in Section 3 or Section 4, as applicable, shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors
and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in Section 3 or
Section 4, as applicable. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to
(i) determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in
Section 3 or Section 4, as applicable and (ii) if any proposed nomination or business is not in compliance with Section 3 or Section 4, as applicable (including
whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicits (or is part of a group which solicits), or fails to so solicit (as the case may be),
proxies in support of such stockholder's proposal in compliance with such stockholder's representation as required by clause (iii)(E) of paragraph (b) of Section 3), to declare
that such defective nomination shall be disregarded or that such proposed business shall not be transacted. 

3

 

        Section 7.    Compliance with Exchange Act.    Notwithstanding the provisions of Section 3 and
Section 4, a stockholder shall also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder, with respect to the matters set forth in
Section 3 and Section 4. Nothing in either Section 3 or Section 4 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. 

        Section 8.    Quorum, Adjournment.    A majority of the stock issued and outstanding and entitled to vote at
any meeting of stockholders, the holders of which are present in person or represented by proxy, shall constitute a quorum for the transaction of business except as otherwise provided by law, by the
Certificate of Incorporation, or by these Bylaws. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum and the votes present may continue to
transact business until adjournment. If, however, such quorum shall not be present or represented at any meeting of the stockholders, a majority of the voting stock represented in person or by proxy
may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote thereat. 

        Section 9.    Vote Required.    When a quorum is present at any meeting, the vote of the holders of a majority
of voting power held by the stockholders present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of
the statutes, the Certificate of Incorporation, these Bylaws, or a contractual right, a different vote is required, in which case such express provision shall govern and control the decision of such
question. At all meetings of stockholders for the election of directors, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting
and entitled to vote on the election of directors. 

        Section 10.    Voting Procedures.    At each meeting of the stockholders, each stockholder having the right to
vote may vote in person or may authorize another person or persons to act for him by proxy appointed by an instrument in writing subscribed by such stockholder and bearing a date not more than three
years prior to said meeting, unless said instrument provides for a longer period. All proxies must be filed with the Secretary of the Corporation at the beginning of each meeting in order to be
counted in any vote at the meeting. Each stockholder shall have one vote for each share of stock having voting power, registered in his name on the books of the Corporation on the record date set by
the Board of Directors as provided in Article VII, Section 4 hereof. 

        Section 11.    Stockholders Entitled to Vote.    The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and
showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present. 

        Section 12.    No Stockholder Action by Written Consent Without a Meeting.    Effective from and after the
closing of an initial public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of common stock of the Corporation to 

4

 

the
public, no stockholder action may be taken except at a duly called annual or special meeting of stockholders of the Corporation and stockholders of the Corporation may not take any action by
written consent in lieu of a meeting. 

 
 

ARTICLE IV    
    
    DIRECTORS    
    

        Section 13.    Number.    The number of directors which shall constitute the whole Board shall be not less than
six (6) and not more than twelve (12). The exact number of directors shall be determined from time to time by resolution adopted by affirmative vote of a majority of the entire Board of
Directors. Directors need not be stockholders of the Corporation. The provisions of this Section 1 may be amended only with the approval of 75% of the members of the Board of Directors of the
Corporation. 

        Section 14.    Powers.    The powers of the Corporation shall be exercised, its business conducted and its
property controlled by the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation. 

        Section 15.    Election and Tenure.    Each director shall be elected in the manner specified in the
Certificate of Incorporation and shall hold office until such time as is set forth therein. 

        Section 16.    Vacancies.    Any vacancies on the Board of Directors shall be filled only in the manner
specified in the Certificate of Incorporation. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, disability, disqualification, removal or
resignation of any director. 

        Section 17.    Resignation.    Any director may resign at any time by delivering his or her notice in writing
or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of
Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. 

        Section 18.    Removal.    Neither the Board of Directors nor any individual director may be removed without
cause. Subject to any limitation imposed by applicable law, any director may be removed with cause by the holders of at least 75% of the voting power of the Corporation entitled to vote at an election
of directors. 

        Section 19.    Meetings.    

        (a)   Regular Meetings.    Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the
Board of Directors may be held at any time or date and at any place within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors,
either orally or in writing. The directors may have one or more offices and keep the books of the Corporation outside of the State of Delaware. 

        (b)   Special Meetings.    Unless otherwise restricted by the Certificate of Incorporation, special meetings of the
Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board, the President or a majority of the members of the Board of
Directors. 

        (c)   Meetings by Electronic Communications Equipment.    Any member of the Board of Directors, or of any committee
thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the 

5

 

meeting
can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. 

        (d)   Notice of Special Meetings.    Notice of the time and place of all special meetings of the Board of Directors
shall be given orally or in writing, by telephone, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four
(24) hours before the date and time of the meeting. If notice is sent by U.S. mail, it shall be sent by first class mail, postage prepaid at least three (3) days before the date of the
meeting. Notice of any meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the
director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. 

        (e)   Waiver of Notice.    The transaction of all business at any meeting of the Board of Directors, or any committee
thereof, however called or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the
meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the
corporate records or made a part of the minutes of the meeting. 

        Section 20.    Quorum and Voting.    

        (a)   Except as may be otherwise specifically provided by statute, the Certificate of Incorporation or these Bylaws, a quorum
of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors; provided,
however, at any meeting, whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular
meeting of the Board of Directors, without notice other than by announcement at the meeting. 

        (b)   At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by
the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws. 

        Section 21.    Action Without Meeting.    Unless otherwise restricted by the Certificate of Incorporation or
these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors
or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of
the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. 

        Section 22.    Fees and Compensation.    Directors shall be entitled to such compensation for their services as
may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special
meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any
other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor. 

        Section 23.    Committees.    The Board of Directors may, by resolution passed by a majority of the whole
Board, designate one or more committees, each such committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of the committee. 

6

 

In
the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution
of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the Bylaws of the Corporation; and, unless the resolution or the Certificate of Incorporation expressly so
provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Each committee shall keep regular minutes of its meetings and report the same
to the Board of Directors when required. 

 
 

ARTICLE V    
    
    OFFICERS    
    

        Section 24.    Officers Designated.    The officers of the Corporation shall include, if and when designated by
the Board of Directors, a President, a Secretary, and a Treasurer, all of whom shall be elected at the annual organizational meeting of the Board of Directors. The Board of Directors may also appoint
other officers as are desired, including a Chairman of the Board of Directors, a Chief Executive Officer, a Chief Financial Officer, a Controller, one or more Vice Presidents, Assistant Secretaries,
Assistant Treasurers, Assistant Controllers and such other officers and agents as may be appointed in accordance with the provisions of Section 3(h) of this Article V. The Board of
Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. In the event there are two or more Vice Presidents, then the directors may, at the time of the
election of the officers, by resolution determine the order of their rank. Any one person may hold any number of offices of the Corporation at any one time unless specifically prohibited therefrom by
law. 

        Section 25.    Compensation of Officers.    The salaries and other compensation of the officers of the
Corporation shall be fixed by or in the manner designated by the Board of Directors. 

        Section 26.    Tenure and Duties of Officers.    

        (a)   Election, Removal and Vacancies.    All officers shall hold office at the pleasure of the Board of Directors
and until their successors shall have been duly elected and qualified, unless their earlier resignation or removal. Any officer elected or appointed by the Board of Directors may be removed at any
time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors. 

        (b)   Duties of Chairman of the Board of Directors.    The Chairman of the Board of Directors, if such an officer is
elected, when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairman of the Board of Directors shall perform other duties commonly incident to the office
and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. If there is no President, then the Chairman of the Board of Directors
shall also serve as the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in paragraph (c) of this Section 3. 

        (c)   Duties of President.    The President shall preside at all meetings of the stockholders and at all meetings of
the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. The President shall be the Chief Executive Officer of the Corporation, 

7

 

unless
such officer is elected separately by the Board of Directors, and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and
officers of the Corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. 

        (d)   Duties of Vice Presidents.    In the absence or disability of the President, the Vice Presidents in order of
their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, if such officers are elected, may assume and perform the duties of the
President. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the
President shall designate from time to time. 

        (e)   Duties of Secretary.    The Secretary shall attend all meetings of the stockholders and of the Board of
Directors and shall record all acts, proceedings, and votes thereof in the minute book of the
Corporation, and shall perform like duties for the standing committees when required by the Board of Directors. The Secretary shall give notice in conformity with these Bylaws of all meetings of the
stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties
commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. The Secretary shall keep in safe
custody the seal of the Corporation, and when authorized by the Board of Directors, affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the
signature of an Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The
President may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties
commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. 

        (f)    Duties of Chief Financial Officer.    The Chief Financial Officer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys, and other valuable effects in the name and to
the credit of the Corporation, in such depositories as may be designated by the Board of Directors. The Chief Financial Officer shall disburse the funds of the Corporation as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements, and shall render to the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all
his or her transactions as Chief Financial Officer and of the financial condition of the Corporation. The Chief Financial Officer shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. 

        (g)   Duties of Treasurer.    The President may direct the Treasurer or any Assistant Treasurer, or the Controller or
any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, or if a Chief Financial Officer has not been
elected, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller shall perform other duties commonly incident to the office and shall also perform such other duties and
have such other powers as the Board of Directors or the President shall designate from time to time. 

        (h)   Duties of Subordinate Officers.    The Board of Directors may appoint such other officers and agents as it
shall deem necessary who shall hold their offices for such terms and shall exercise 

8

 

such
powers and perform such duties as shall be determined from time to time by the Board of Directors. 

        Section 27.    Delegation of Authority.    The Board of Directors may from time to time delegate the powers or
duties of any officer to any other officer or agent, notwithstanding any provision hereof. 

        Section 28.    Resignations.    Any officer may resign at any time by giving notice in writing or by electronic
transmission notice to the Board of Directors or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given,
unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation
shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract with the resigning officer. 

        Section 29.    Removal.    Any officer may be removed from office at any time, either with or without cause, by
the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of Directors. 

 
 

ARTICLE VI    
    
    EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
  OF SECURITIES OWNED BY THE CORPORATION    
    

        Section 30.    Execution of Corporate Instruments.    The Board of Directors may, in its discretion, determine
the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the Corporation any corporate instrument or document, or to sign on behalf of the
Corporation the corporate name without limitation, or to enter into contracts on behalf of the Corporation, except where otherwise provided by law or these Bylaws, and such execution or signature
shall be binding upon the Corporation. 

        All
checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be signed by such person or persons
as the Board of Directors shall authorize so to do. 

        Unless
authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation
by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount. 

        Section 31.    Voting of Securities Owned by the Corporation.    All stock and other securities of other
corporations owned or held by the Corporation for itself, or for other parties in any capacity, shall, if permitted by law, be voted, and all proxies with respect thereto shall be executed, by the
person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the President, the Chairman of the Board of Directors, if elected, or the Chief
Executive Officer, if elected. 

 
 

ARTICLE VII    
    
    SHARES OF STOCK    
    

        Section 32.    Form and Execution of Certificates.    Certificates for the shares of stock of the Corporation
shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the
name of the Corporation by the Chairman of the Board of Directors, if elected, or the President or vice-president and by the Treasurer or an assistant treasurer or the Secretary or an
assistant secretary, 

9

 

certifying
the number of shares owned by such holder in the Corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the
same effect as if he were such officer, transfer agent, or registrar at the date of issue. 

        Section 33.    Lost Certificates.    A new certificate or certificates shall be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen, or destroyed. The Corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or the owner's legal representative, to agree to indemnify the Corporation in such manner as it shall require or to give the Corporation a surety bond in such form and
amount as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed. 

        Section 34.    Transfers.    

        (a)   Transfers of record of shares of stock of the Corporation shall be made only upon its books by the holders thereof, in
person or by attorney duly authorized, and upon the surrender of a properly endorsed certificate or certificates for a like number of shares. 

        (b)   The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or
more classes of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the
Delaware General Corporation Law (the "DGCL"). 

        Section 35.    Fixing Record Dates.    In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of the stockholders, or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion, or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date which shall not be more than
sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 

        Section 36.    Registered Stockholders.    The Corporation shall be entitled to recognize the exclusive right
of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. 

 
 

ARTICLE VIII    
    
    OTHER SECURITIES OF THE CORPORATION    
    

        Section 37.    Execution of Other Securities.    All bonds, debentures and other corporate securities of the
Corporation, if any, other than stock certificates (covered in Article VII, Section 1), may be signed by the Chairman of the Board of Directors, if elected, the President, any
vice-president or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by
the signature of the Secretary, the Chief Financial Officer, if elected, the Treasurer, or such other person as may be authorized by the 

10

 

Board
of Directors; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature,
or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and
attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond,
debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer of the Corporation or such other person as may be authorized by the Board of Directors,
and bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature
shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such
bond, debenture or other corporate security nevertheless may be adopted by the Corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have
been used thereon had not ceased to be such officer of the Corporation. 

 
 

ARTICLE IX    
    
    DIVIDENDS    
    

        Section 38.    Declaration of Dividends.    Dividends upon the capital stock of the Corporation, subject to the
provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash,
in property, or in shares of capital stock, subject to the provisions of the Certificate of Incorporation and applicable law. 

        Section 39.    Dividend Reserve.    Before payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other
purpose as the Board of Directors shall think conducive to the interests of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created. 

 
 

ARTICLE X    
    
    FISCAL YEAR    
    

        Section 40.    Fiscal Year.    The fiscal year of the Corporation shall be fixed by resolution of the Board of
Directors. 

 
 

ARTICLE XI    
    
    INDEMNIFICATION    
    

        Section 41.    Indemnification.    

        (a)   The Corporation shall, to the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended (but
in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to
such amendment), indemnify any and all persons whom it shall have power to indemnify under the DGCL from and against any and all of the expenses, liabilities or other matters referred to in or covered
by the DGCL, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in such person's official capacity and as to 

11

 

action
in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person. 

        (b)   The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct
was unlawful. 

        (c)   The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem proper. 

        (d)   To the extent that a director, officer, employee or agent of the Corporation shall be successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in paragraphs (b) and (c) of this Section 1, or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. 

        (e)   Any indemnification under paragraphs (b) and (c) of this Section 1 (unless ordered by a court) shall
be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because the
person has met the applicable standard of conduct set forth in paragraphs (b) and (c) of this Section 1. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though less than a quorum or (2) by a committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. 

12

 

        (f)    Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Section 1. Such
expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board Of Directors deems appropriate. 

        (g)   The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this
Section 1 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. 

        (h)   The Board of Directors may authorize the Corporation to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power to indemnify such person against such liability under this Section 1. 

        (i)    For purposes of this Section 1, references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position
under the provisions of this Section 1 with respect to the resulting or surviving corporation as the person would have with respect to such constituent corporation if its separate existence had
continued. 

        (j)    For purposes of this Section 1, references to "other enterprises" shall include employee benefit plans; references
to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a manner the person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Section 1. 

        (k)   The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 1 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. 

        (l)    The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this Section 1 or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily
determine the Corporation's obligation to advance expenses (including attorneys' fees). 

13

 

        Section 42.    Non-Exclusivity of Rights.    The rights conferred on any person by this Bylaw shall
not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into
individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable
law. 

        Section 43.    Amendments.    Any repeal or modification of this Bylaw shall only be prospective and shall not
affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the Corporation. 

 
 

ARTICLE XII    
    
    NOTICES    
    

        Section 44.    Notices.    

        (a)   Notice to Stockholders.    Written notice to stockholders of
stockholder meetings shall be given as provided in Article III, Section 2 herein. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any
agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by United States mail or
nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means. 

        (b)   Notice to Directors.    Any notice required to be given to any
director may be given by the method stated in subsection (a), or as provided for in Article IV, Section 7 of these Bylaws. If such notice is not delivered personally, it shall be sent to
such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director. 

 
 

ARTICLE XIII    
    
    AMENDMENTS    
    

        Section 45.    Amendments.    These Bylaws may be altered, amended or repealed or new Bylaws may be adopted by
the Board of Directors or by the stockholders only in accordance with the provisions of the Certificate of Incorporation. The power to adopt, amend or repeal Bylaws conferred upon the Board of
Directors by the Certificate of Incorporation shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws as set forth therein. 

14

 
 

CERTIFICATE OF SECRETARY    
    

        I,
the undersigned, do hereby certify: 

        (1)   That
I am the duly elected and acting Secretary of Jazz Semiconductor, Inc., a Delaware corporation; and 

        (2)   That
the foregoing Amended and Restated Bylaws, comprising 17 pages, constitute the Bylaws of said corporation as duly adopted by the written consent of the Board of
Directors of said corporation as of                            , 200    . 

        IN
WITNESS WHEREOF, I have hereunto subscribed my name this    day of            , 200    . 

	 	 	    
 Mark S. Becker, Secretary

QuickLinks

Exhibit 10.28

TABLE OF CONTENTS

THIRD AMENDED AND RESTATED STOCKHOLDER AGREEMENT

RECITALS

AGREEMENT

ARTICLE 1. DEFINITIONS

ARTICLE 2. THE BOARD OF DIRECTORS

ARTICLE 3. CERTAIN ACCESS AND REVIEW RIGHTS OF STOCKHOLDERS

ARTICLE 4. COMPLIANCE WITH SECURITIES LAWS

ARTICLE 5. TERMINATION

ARTICLE 6. CERTAIN REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF JAZZ SEMICONDUCTOR, INC.

Amended and Restated BYLAWS OF JAZZ SEMICONDUCTOR, Inc. (A DELAWARE CORPORATION)

ARTICLE I OFFICES

ARTICLE II CORPORATE SEAL

ARTICLE III STOCKHOLDERS' MEETINGS

ARTICLE IV DIRECTORS

ARTICLE V OFFICERS

ARTICLE VI EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE CORPORATION

ARTICLE VII SHARES OF STOCK

ARTICLE VIII OTHER SECURITIES OF THE CORPORATION

ARTICLE IX DIVIDENDS

ARTICLE X FISCAL YEAR

ARTICLE XI INDEMNIFICATION

ARTICLE XII NOTICES

ARTICLE XIII AMENDMENTS

CERTIFICATE OF SECRETARY

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