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Exhibit 10.6    
  

EMPLOYMENT AGREEMENT  

        This Employment Agreement, dated as of March 20, 2002, is by and between Key Production Company, Inc., a Delaware corporation (the "Employer"), and
David Honeyfield (the "Employee"). 

RECITALS  

        The Employer has determined that it is in the best interests of the Employer and its stockholders to employ the Employee as Controller and Chief Accounting
Officer of the Employer, and the Employee is willing to accept such employment on the terms and conditions described below. 

AGREEMENT  

        In consideration of and subject to the agreements, terms and conditions contained herein, the parties hereto agree as follows: 

ARTICLE I

EMPLOYMENT  

        Section 1.1. Employment of the Employee. The Employer hereby employs the Employee, and the Employee hereby
accepts employment by the Employer, upon the terms and conditions hereinafter set forth. The term "Period of Employment" as used herein shall mean the period from April 15, 2002,
until the first to occur of the end of the term of this Agreement as provided in Section 1.2 or the date of the Employee's termination as provided herein. 

        Section 1.2.
Term. The term of this Agreement shall be three years. 

        Section 1.3.
Commencement of Employment. Employee shall commence employment with the Employer on April 22, 2002. 

ARTICLE II

DUTIES  

        Section 2.1. Duties. During the Period of Employment, the Employee shall, subject to the authority of the
Vice President and Chief Financial Officer of the Employer, be employed as Controller of the Employer, with such duties, responsibilities and authority as are consistent with such office, and with
such additional responsibilities and duties as may be reasonably assigned to him by the Vice President and Chief Financial Officer, which in each case he shall faithfully and diligently perform. 

        Section 2.2.
Time to be Devoted to Employment, Etc. Except for vacations, which in no event shall be less than four paid weeks each
year, and absences due to temporary illness or disability, the Employee shall devote his full time, attention and energies on a full-time basis to the business of the Employer. Nothing in
this Agreement, however, shall preclude the Employee from devoting reasonable periods to (a) engaging in charitable and community activities or (b) managing his personal investments. 

ARTICLE III

COMPENSATION  

        Section 3.1. Base Salary. The Employer shall pay to the Employee a base salary equal to
$11,666.66 monthly or $140,000.00 annually (the "Base Salary"), payable semi-monthly in arrears. The Base Salary may be adjusted as determined by the Vice President and Chief
Financial Officer, but shall not be decreased below the Base Salary in existence immediately prior to such adjustment. 

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        Section 3.2.
Annual Incentive Bonuses. The Employee shall be eligible for incentive bonuses as approved by the Employer's Board of
Directors (the "Board"). 

        Section 3.3.
Reimbursement for Expenses. The Employer shall reimburse the Employee for all reasonable and necessary travel expenses
and other reasonable disbursements made by him for or on behalf of the Employer in the performance of his duties hereunder on the Employer's business, upon presentation by the Employee to the Employer
of appropriate vouchers. 

        Section 3.4.
Incidental Benefits. The Employer shall provide life insurance coverage for the Employee in a face amount equal to two
times his annual salary and a covered parking space. 

        Section 3.5.
Employee Benefit Plans. During the Period of Employment, the Employee and his immediate family shall be entitled to
participate in employee benefit plans. The Employer has established, and the Employee shall be eligible to participate in, a health and dental plan, a long-term disability plan, a deferred
compensation plan, an income continuance plan and a 401(k) plan with an Employer matching contribution of at least four percent of the Employee's Base Salary (subject to any limitations on such
contributions imposed by the Internal Revenue Code of 1986 or the Employee Retirement Income Security Act of 1974). 

ARTICLE IV

DISABILITY OR DEATH OF THE EMPLOYEE  

        Section 4.1. Disability. If the Employee is incapacitated or disabled by accident, sickness or otherwise so
as to render him mentally or physically incapable of performing the services required to be performed by him under this Agreement for a period of 90 consecutive days or for a total of
120 days in any twelve-month period, the Employer may, at its option, if payments to the Employee have commenced under the Employer's long-term disability plan, at that time or any
time thereafter, terminate the Period of Employment immediately (provided that both such disability and payments under the Employer's long-term disability plan shall have continued to the
time of termination) upon giving him notice to that effect. Until the Employer shall have terminated the Employee's employment in accordance with the foregoing, the Employee shall be entitled to
receive his compensation, pursuant to Article III notwithstanding any such physical or mental disability. Nothing herein shall limit the Employee's right to receive any amounts to be paid to
the Employee under any disability or employee benefit plan of the Employer, if any, or under any other disability insurance policy or plan covering the Employee. 

        Section 4.2.  Death. If the Employee dies during the Period of Employment, his employment, his employment hereunder and the Period
of Employment shall terminate on the date of his death. 

ARTICLE V

TERMINATION FOR CAUSE  

        Section 5.1. Termination for Cause. The Employer may, by summary notice in writing, terminate the Period of
Employment for cause. For the purposes of this Agreement, the term "cause" shall mean: 

        (a)  a
serious breach or any continued default by the Employee in the substantial performance of his duties under this Agreement (other than resulting from his disability)
for a 30-day period after a demand for substantial performance is delivered to the Employee by the Employer, which demand specifies and identifies the manner in which the Employee has not
substantially performed his duties. 

        (b)  misconduct
by the Employee which is injurious to himself or the Employer, provided that conduct will not be deemed misconduct if it was engaged in by the Employee in
good faith in the belief that it was in, or not opposed to, the interests of the Employer, or was engaged in at the direction of the President and Chief Executive Officer or the Board; or 

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        (c)  the
intentional commission by the Employee of either: 

        (i)    a
business crime the intended purpose of which was to enrich the Employee at the expenses of the Employer; or 

        (ii)  a
felony of which the Employee is convicted or to which he pleads guilty or nolo contendere. 

ARTICLE VI

TERMINATION WITHOUT CAUSE  

        Section 6.1. Employer Termination. The Employer may terminate the Period of Employment without cause at any
time by giving the Employee 30 days prior written notice. Upon the expiration of such 30-day period, the Period of Employment shall terminate. 

        Section 6.2.  Employee Termination. For purposes of this Agreement, the Period of Employment shall be deemed to have been terminated
without cause if the Employee resigns under any of the following conditions: 

        (a)  upon
the continued default (including a material reduction in the duties, responsibilities and authority of the Employee as set forth in Article II) by the
Employer in the substantial performance of its obligations hereunder for a 30-day period after a demand for substantial performance is delivered to the Employer by the Employee, which
demand specifies and identifies the manner in which the Employer has not substantially performed its obligations; or 

        (b)  upon
the Employee being directed by the Vice President and Chief Financial Officer, the President and Chief Executive Officer or the Board to engage in any activity
which the Employee, based upon written advice of competent legal counsel, believes would constitute criminal activity, provided that the Employee gives notice to the Employer providing it with a copy
of the written advice of his legal counsel and the Employer does not, within five business days after its receipt of such notice, withdraw its request that the Employee engage in the activity
in question. 

ARTICLE VII

EFFECT OF TERMINATION OF PERIOD OF EMPLOYMENT  

        Section 7.1. Termination for Cause or Voluntarily. Upon termination of the Period of Employment pursuant to
Article V, or by the Employee (except under the conditions set forth in Section 6.2), neither the Employee nor his beneficiaries or estate shall have any further rights or claims against
the Employer under this Agreement except to receive: 

        (a)  the
unpaid portion of the Employee's Base Salary provided for in Section 3.1, computed on a pro-rata basis to the date of termination; 

        (b)  reimbursement
for any expenses for which the Employee shall not have theretofore been reimbursed as provided in Section 3.3; and 

        (c)  any
benefits, including the right to continued coverage under the Employer's health plans, which are mandated by law for terminated employees. 

        Section 7.2
Termination for Death, Disability or Without Cause. Upon the termination of the Period of Employment pursuant to
Articles IV or VI, neither the Employee nor his beneficiaries or estate shall have any further rights or claims against the Employer under this Agreement except to receive: 

        (a)  compensation
at the then applicable Base Salary rate through the term of this Agreement as provided in Section 1.2, provided that any payments described in this
paragraph (a) shall be reduced by any payments to the Employee under the Employer's long term disability plan; 

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        (b)  reimbursement
for any expenses for which the Employee shall not have theretofore been reimbursed as provided in Section 3.3; and 

        (c)  any
benefits, including the right to continued coverage under the Employer's health plans, which are mandated by law for terminated employees. 

        Section 7.3.
Other Employer Obligations. The provisions of this Article VII shall in no way limit any rights or claims which
the Employee may have by virtue of any other agreements entered into with Employer. 

ARTICLE VIII

CHANGE OF CONTROL  

        Section 8.1. Change of Control. If the Employee continues as an employee of the Employer after the term of
this Agreement, as provided in Section 1.2, and if during the period of such extended employment the Employee is terminated without cause following a "Change in Control" (as defined below), the
Employee shall be entitled to immediate payment of an amount equal to twice the Employee's annual salary at the rate in effect when the Change in Control occurs. The term "Change in Control" as used
herein means the occurrence, after the date of this Agreement, of any of the following: 

        (a)  the
acquisition by any person or group of beneficial ownership of securities (including securities convertible into or exchangeable for or options or other rights to
acquire securities) of the Employer, representing in the aggregate 25 percent or more of the combined voting power of all securities of the Employer entitled to vote in the election of
directors, without the prior approval of the acquisition resulting in such person or group acquiring such percentage by at least two-thirds of the directors of the Employer who are not
affiliates or associates of such person or group; 

        (b)  during
any period of up to 24 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 24-month
period were directors of the Employer ceasing for any reason to constitute two-thirds of the total number of directors of the Employer unless the individuals serving as new or replacement
directors were nominated by at least a majority of the directors of the Employer in office immediately prior to such period; 

        (c)  the
adoption of any plan or proposal to liquidate or dissolve the Employer; or 

        (d)  any
merger or consolidation of the Employer unless thereafter (i) directors of the Employer immediately prior thereto continue to constitute at least
two-thirds of the directors of the surviving entity or transferee or (ii) the Employer's securities continue to represent or are converted into securities that represent more than
80% of the combined voting power of the surviving entity or transferee. 

        As
applicable, all terms used in this definition of "Change of Control" shall be given their meanings as used in Section 13(d) of the Securities Exchange Act of 1934 as in
effect on the date of this Agreement or Rule 13d-3 or Rule 12b-2 issued thereunder as in effect on the date of this Agreement. 

ARTICLE IX

CONFIDENTIALITY  

        Section 9.1. Confidentiality. The Employee shall not make use of or otherwise reveal any trade secret or
confidence of the Employer, including any information about the Employer or its business which is not generally available to the public including, but not limited to, any such information involving
planning, analysis or strategy, or any investor, financial, legal, geological, geophysical or other proprietary information. Upon termination of employment, the Employee shall promptly surrender all 

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documents, maps, records, data and other information representing, reflecting or containing trade secrets or confidences. The provisions of this Article IX shall survive for a period of three
years after the end of the Period of Employment. 

ARTICLE X

ARBITRATION  

        Section 10.1. Arbitration. If a dispute arises between the Employer and the Employee as to the
interpretation of this Agreement, the Employer and the Employee agree to submit the matter to binding arbitration in accordance with the Center for Public Resources Rules for
Non-Administered
Arbitration of Business Disputes, as modified herein, by a sole arbitrator, in Denver, Colorado, selected in accordance with the provisions of Section 11.2. The arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C. ? 1-16, and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. 

        Section 10.2.
Selection of Arbitrator. The parties shall have 10 days from the date when written notice is provided to
either party by the other party of a request for arbitration to agree upon a mutually acceptable neutral person not affiliated with either of the parties to act as arbitrator. If no arbitrator has
been selected within such time, the parties agree jointly to request the Center for Public Resources or another mutually agreed-upon organization to supply within 10 days a list of
potential arbitrators with qualifications as specified by the parties in the joint request. Within five days of receipt of the list, the parties shall independently rank the proposed
candidates, shall simultaneously exchange rankings, and shall select as the arbitrator the individual receiving the highest combined ranking who is available to serve. 

        Section 10.3.
Cost of Arbitration. The costs of arbitration shall be apportioned between the Employer and the Employee as
determined by the arbitrator in such manner as the arbitrator deems reasonable taking into account the circumstances of the case, the conduct of the parties during the proceeding and the result of the
arbitration. 

ARTICLE XI

MISCELLANEOUS  

        Section 11.1. Necessary Acts. All parties to this Agreement shall perform any and all acts as well as
execute any and all documents that may be reasonably necessary to fully carry out the provisions and intent of this Agreement. 

        Section 11.2.
Notices. All notices, demands, requests or other communications required or permitted by this Agreement or by law to
be served on, given to or delivered to any party hereto by any other party to this Agreement shall be in writing and shall be deemed duly served, given, received and delivered (a) on the date
of service if served personally on the party to whom notice is given, (b) on the day of transmission if sent via facsimile transmission to the facsimile number given below, provided telephone
confirmation of receipt is obtained promptly after completion of transmission, (c) on the business day after delivery to an overnight courier service or the Express Mail service maintained by
the United States Postal Service, provided receipt of delivery has been confirmed, or (d) five days after being sent by registered or certified mail, provided receipt of delivery is
confirmed, first-class postage prepaid, properly addressed to the respective parties as follows: 

	 	 	If to the Employer:	 	707 Seventeenth Street, Suite 3300

Denver, Colorado 80202

303/295-3995
	

 	
 	

If to the Employee:	
 	

7916 S. Niagara Court

Centennial, Colorado 80112

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or
to such other address as may be designated by any such addressees by a notice given in conformity herewith. 

        Section 11.3.
Binding on Successors. This Agreement shall inure to the benefit of and be binding on the parties hereto and on each
of their respective heirs, executors, administrators, personal representatives, successors and assignees. 

        Section 11.4.  Choice of Law and Forum. This Agreement shall be construed and governed by the laws, commercial usages and customs of
the State of Colorado, without giving effect to the principles of conflict of laws thereof. In the event that any dispute, action, proceeding or litigation arises between the parties based on or
arising out of this Agreement, or any agreement or instrument delivered pursuant to this Agreement, subject to the arbitration provisions of Article X, the parties agree to submit themselves to
and irrevocably consent to the jurisdiction of the courts of the State of Colorado, and any federal court located in the State of Colorado. 

        Section 11.5.  Headings. The headings of the articles and sections of this Agreement have been inserted solely for convenience of
reference and shall in no way restrict or modify any of the terms or provisions hereof. 

        Section 11.6.
Sole and Only Agreement. This Agreement and the agreements referred to herein constitute the only agreements of the
parties hereto relating to the subject matter hereof. Any prior agreements, promises, negotiations or representations concerning the subject matter of this Agreement not expressly set forth in this
Agreement shall have no force or effect. 

        Section 11.7.  Amendment and Extension. This Agreement may not be amended or extended except by an instrument in writing signed on
behalf of each of the parties hereto. 

        Section 11.8.
Severability. Should any provision or portion of this Agreement be held unenforceable or invalid for any reason, the
remaining provisions and portions of this Agreement shall be unaffected by such holding, unless to do so would alter substantially the intended effect of this Agreement or cause a substantial hardship
for any party hereto. 

        Section 11.9.  Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same agreement. 

        The
parties have duly executed this Agreement as of the date first written above. 

	

 	
 	

EMPLOYER:
	

 	
 	

KEY PRODUCTION COMPANY, INC.
	

 	
 	

By:	
 	

/s/  F.H. MERELLI      
 F.H. Merelli, Chairman of the Board, President and Chief Executive Officer
	

 	
 	

EMPLOYEE:
	

 	
 	

By:	
 	

/s/  DAVID HONEYFIELD      
 David Honeyfield

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QuickLinks

Exhibit 10.6EXHIBIT 10.4

 

 

 

 

 

 

 

 

 

 

 

 

INTEGRATED
DEVICE TECHNOLOGY, INC.

1984 EMPLOYEE
STOCK PURCHASE PLAN

(Amended
and Restated Effective as of October 1, 2002)

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  Establishment of the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.

  	
   

  	
  Definitions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.

  	
   

  	
  Duration; Shares Authorized

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.

  	
   

  	
  Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.

  	
   

  	
  Eligibility and Participation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  Purchase Price

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.

  	
   

  	
  Employee Contributions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.

  	
   

  	
  Plan Accounts; Purchase of Shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.

  	
   

  	
  Withdrawal From the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.

  	
   

  	
  Effect of Termination of Employment or
  Death

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.

  	
   

  	
  Rights Not Transferable

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.

  	
   

  	
  Recapitalization, Etc

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.

  	
   

  	
  Limitation on Stock Ownership

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.

  	
   

  	
  No Rights as an Employee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.

  	
   

  	
  Rights as a Stockholder

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 16.

  	
   

  	
  Use of Funds

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 17.

  	
   

  	
  Amendment or Termination of the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 18.

  	
   

  	
  Governing Law

  	
   

  	
   

  

 

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INTEGRATED
DEVICE TECHNOLOGY, INC.

1984 EMPLOYEE
STOCK PURCHASE PLAN

(Amended
and Restated Effective as of October 1, 2002)

Section 1.               Establishment
of the Plan.

The Integrated Device Technology, Inc. 1984 Employee
Stock Purchase Plan (the “Plan”) is hereby amended and restated to provide for
certain changes in the duration and frequency of Participation Periods (as
defined below), to provide for Purchase Periods (as defined below) within such
Participation Periods and to provide for certain other changes.  The Plan provides Eligible Employees with an
opportunity to purchase the Company’s common stock so that they may increase
their proprietary interest in the success of the Company.  The Plan, which provides for the purchase of
stock through payroll withholding, is intended to qualify under Section 423 of
the Code.

Section 2.               Definitions.

(a)           “Board
of Directors” or “Board” means the Board of Directors of the Company.

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

(c)           “Company”
means Integrated Device Technology, Inc., a Delaware corporation.

(d)           “Compensation”
means the cash remuneration paid to a Participant during a Purchase Period that
is reported on Form W-2 for federal income tax purposes (including salary
deferrals to the Integrated Device Technology, Inc. 401(k) Savings Plan and
contributions to the Company’s Code Section 125 plan).  Compensation shall include overtime and
shift differential payments, incentive compensation, commissions, profit
sharing payments and bonuses. 
Notwithstanding the foregoing, Compensation shall exclude any special
payments (e.g., moving or auto allowances, educational reimbursements, welfare
benefits, amounts realized from the exercise, sale exchange or other
disposition of any stock option and premiums for life and disability insurance).

(e)           “Date
of Exercise” means the last day of each Purchase Period within any
Participation Period.

(f)            “Date
of Participation” means, except as provided in Section 5(d), the first day of
the earliest Participation Period with respect to which an Eligible Employee is
participating in the Plan.

(g)           “Eligible
Employee” means any Employee of a Participating Company (i) who is customarily
employed for at least twenty (20) hours per week, (ii) who is customarily
employed for more than five (5) months per calendar year, and (iii) who is an
Employee at the commencement of a Purchase Period.

 

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In the event an Eligible Employee fails to remain in
the continuous employ of a Participating Company customarily for at least
twenty (20) hours per week during a Participation Period, he or she will be
deemed to have elected to withdraw from the Plan and the payroll deductions
credited to his or her account will be returned to him or her; provided that a
Participant who goes on an unpaid leave of absence shall be permitted to remain
in the Plan during such leave of absence. 
Notwithstanding the preceding sentence, if such Participant is not
guaranteed reemployment by contract or statute and the leave of absence extends
beyond ninety (90) days, such Participant shall be deemed to have terminated
employment for purposes of the Plan on the ninety–first (91st) day of
such leave of absence.  Payroll
deductions for a Participant who has been on an unpaid leave of absence will
resume at the same rate as in effect prior to such leave upon return to work
unless changed by such Participant.  The
Date of Participation for a Participant who has been on unpaid leave of absence
shall be the same as if such Participant remained in continuous service as an
Employee of a Participating Company throughout such unpaid leave of absence.

(h)           “Employee”
means any person who renders services to a Participating Company in the status
of an employee within the meaning of Code Section 3401(c).   “Employee” shall not include any Board
member of a Participating Company who does not render services to the
Participating Company in the status of an employee within the meaning of Code
Section 3401(c).

(i)            “Fair
Market Value” of a share of Stock means the market price of Stock, determined
as follows: (i) if the Stock was traded over–the–counter on the
date in question but was not classified as a national market issue, then the
Fair Market Value shall be equal to the closing bid price quoted by the
National Association of Securities Dealers, Inc. (“NASDAQ”) for the immediately
preceding date; (ii) if the Stock is traded over–the–counter on the
date in question and was classified as a national market issue, then the Fair
Market value shall be equal to the last–transaction price quoted by the
NASDAQ system for the immediately preceding date; (iii) if the Stock is traded
on a national exchange on the date in question, then the Fair Market Value
shall be the highest closing bid price reported on such exchange for the immediately
preceding date.  If the Stock is not
traded on the date as of which the Fair Market Value is to be determined, Fair
Market Value shall be determined as of the first preceding date on which Stock
was traded.  In all cases the
determination of Fair Market Value by the Board of Directors shall be
conclusive and binding on all persons.

(j)            “Participant”
means an Eligible Employee who elects to participate in the Plan, as provided
in Section 5 hereof.

(k)           “Participating
Company” means the Company and such present or future Subsidiaries of the
Company as the Board of Directors shall from time to time designate.

(l)            “Participation
Period” means each consecutive twelve month period commencing each Company
fiscal quarter during the term of the Plan. 
The Board shall have the power to change the frequency and/or duration
of Participation Periods upon at least fifteen (15) days written notice to
then-Eligible Employees before the scheduled beginning of the Participation
Period to be affected.

 

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(m)          “Plan
Account” means the account established for each Participant pursuant to Section
8(a).

(n)           “Plan
Administrator” means the committee appointed by the Board to administer the
Plan pursuant to Section 4.

(o)           “Purchase
Period” with respect to any Participant means each consecutive Company fiscal
quarter beginning with the Date of Participation.  The Board shall have the power to change the frequency and/or
duration of Purchase Periods upon at least fifteen (15) days written notice to
then-Eligible Employees before the scheduled beginning of the Purchase Period
to be affected.

(p)           “Purchase
Price” means the price at which Participants may purchase Stock under Section 8
of the Plan, as determined pursuant to Section 6.

(q)           “Stock”
means the common stock, par value $0.001, of the Company.

(r)            “Stock
Administrator” means the Company’s Stock Administration Department.

(s)           “Subsidiary,”
means a subsidiary corporation as defined in Section 424(f) of the Code.

Section 3.               Duration;
Shares Authorized.

The Plan shall terminate on the last day of the
Company’s 2008–2009 fiscal year, unless terminated earlier by the Board
of Directors.  The maximum aggregate
number of shares which may be offered under the Plan shall be 8,500,000 shares
of Stock, subject to adjustment as provided in Section 12 hereof.

Section 4.               Administration.

(a)           Except
as otherwise provided herein, the Plan shall be administered by the Board or by
a committee (the “Plan Administrator”) appointed by the Board of Directors
which shall consist of not less than two members of the Board.  References in this Plan to the “Plan
Administrator” shall mean the Board if no Plan Administrator has been
appointed.  The interpretation and
construction by the Plan Administrator of any provision of the Plan or of any
right to purchase stock qualified hereunder shall be conclusive and binding on
all persons.

(b)           No
member of the Board or the Plan Administrator shall be liable for any action or
determination made in good faith with respect to the Plan or the right to
purchase Stock hereunder.  The Plan
Administrator shall be indemnified by the Company against the reasonable
expenses, including attorney’s fees actually and necessarily incurred in connection
with the defense of any action, suit or proceeding, or in connection with any
appeal therein, to which it may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any stock purchased
thereunder, and against all amounts paid by it in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by it in satisfaction of a judgment in any such action, suit
or proceeding, except in relation

 

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to matters as to which it shall be adjudged in such
action, suit or proceeding that the Plan Administrator is liable for negligence
or misconduct in the performance of its duties; provided that within sixty (60)
days after institution of any such action, suit or proceeding, the Plan
Administrator shall in writing offer the Company the opportunity, at its own
expense, to handle and defend the same.

(c)           All
costs and expenses incurred in administering the Plan shall be paid by the
Company.  The Board or the Plan
Administrator may request advice for assistance or employ such other persons as
are necessary for proper administration of the Plan.

Section 5.               Eligibility
and Participation.

(a)           Any
person who qualifies or will qualify as an Eligible Employee on the Date of
Participation with respect to a Participation Period may elect to participate
in the Plan for such Participation Period. 
An Eligible Employee may elect to participate by executing the
participation agreement prescribed for such purpose by the Stock
Administrator.  The participation
agreement shall be filed with the Stock Administrator no later than the filing
deadline imposed and communicated to Eligible Employees with respect to the
Participation Period for which such participation agreement is intended to be
effective by the Stock Administrator, and if none is so imposed and/or
communicated, then no later than five (5) days before the Participation Period
for which such participation agreement is intended to be effective.  The Eligible Employee shall designate on the
participation agreement the percentage of his or her Compensation which he or
she elects to have withheld for the purchase of Stock, which may be any whole
percentage from 1 to 10% of the Participant’s Compensation.

(b)           By
enrolling in the Plan, a Participant shall be deemed to have been granted an
option on his or her Date of Participation to purchase the maximum number of
whole shares of Stock which can be purchased with the amount of the
Participant’s Compensation which is withheld during each Purchase Period within
the Participation Period for which the Participation is enrolled.  However, with respect to any Purchase
Period, no Participant shall be eligible to purchase more than two thousand
five hundred (2,500) shares of Stock provided that such amount shall not result
in the limitations set forth in Section 13 being exceeded.  Notwithstanding the foregoing, effective as
of October 1, 2002, the Plan Administrator, or a committee appointed by the
Plan Administrator, which committee may be comprised solely of employees of the
Company, shall have the right to amend the limit set forth in this Section 5(b)
with respect to Purchase Periods commencing after the date of such amendment;
provided, however, that in no event shall the limit exceed two thousand five
hundred (2,500) shares of Stock per Purchase Period or the limitations set
forth in Section 13.

(c)           Once
enrolled, a Participant will continue to participate in the Plan for each
succeeding Purchase Period and each succeeding Participation Period until he or
she terminates participation or ceases to qualify as an Eligible Employee.  A Participant who withdraws from the Plan in
accordance with Section 9 may again become a Participant in a subsequent
Participation Period, if he or she then is an Eligible Employee, by following
the procedure described in Section 5(a).

 

4

 

(d)           If
the Fair Market Value of a share of Stock on the Date of Participation for the
current Participation Period in which a Participant is enrolled is higher than
the Fair Market Value of a share of Stock on the first day of any subsequent
Participation Period, the Company will (after the Purchase Period), terminate
the current Participation Period, and the Participant’s Date of Participation
shall be the first day of such subsequent Participation Period until changed in
accordance with the terms of this Plan.

Section 6.               Purchase
Price.

The Purchase Price for each share of Stock shall be
the lesser of (i) eighty–five percent (85%) of the Fair Market Value of
such share on the Date of Participation or (ii) eighty–five percent (85%)
of the Fair Market Value of such share on the Date of Exercise, for an
applicable Participation Period.

Section 7.               Employee
Contributions.

A Participant may purchase shares of Stock solely by
means of payroll deductions.  Payroll
deductions, as designated by the Participant pursuant to Section 5(a), shall
commence with the first paycheck issued during the Purchase Period and shall be
deducted from each subsequent paycheck throughout the Purchase Period;
provided, however, that, with respect to a Participant, the Company shall be
entitled to discontinue payroll deductions for such Participant during a
Purchase Period to the extent that the Company determines that the payroll
deductions for such Participant during such Purchase Period will cause the
Participant to exceed the limitations set forth in Sections 5 or 13; provided,
further, that the Company will recommence payroll deductions for such Participant
on the first day of the next Purchase Period to the extent the limitation set
forth in Section 13 has not been exceeded. 
If a Participant desires to decrease the rate of payroll withholding
during the Purchase Period, he or she may do so one time during a Purchase
Period by filing a new participation agreement with the Stock
Administrator.  Such decrease will be
effective no later than the first day of the second payroll period which begins
following the receipt of the new participation agreement.  If a Participant desires to increase or
decrease the rate of payroll withholding, he or she may do so effective for the
next Purchase Period by filing a new participation agreement with the Stock
Administrator on or before the date imposed and communicated to Eligible
Employees by the Stock Administrator, and if none is so imposed and/or
communicated, then no later than five (5) days before the Purchase Period for
which such change is to be effective.

Section 8.               Plan
Accounts; Purchase of Shares.

(a)           The
Company will maintain a Plan Account on its books in the name of each
Participant.  At the close of each pay
period, the amount deducted from the Participant’s Compensation will be
credited to the Participant’s Plan Account.

(b)           As
of each Date of Exercise, the amount then in the Participant’s Plan Account
will be divided by the Purchase Price, and the number of whole shares which
results (subject to the limitations described in Sections 5(b), 8(c) and 13)
shall be purchased from the Company with the funds in the Participant’s Plan
Account.  The number of shares of Stock
so purchased shall be delivered to a brokerage account designated by the Plan
Administrator and

 

5

 

kept in such account pursuant to a participation
agreement (which shall be uniform) between each Participant and the Company and
subject to the conditions described therein (which may include, without
limitation, restrictions on transferability of the shares of Stock so
purchased).

(c)           In
the event that the aggregate number of shares which all Participants elect to
purchase during a Purchase Period shall exceed the number of shares remaining
available for issuance under the Plan, then the number of shares to which each
Participant shall become entitled shall be determined by multiplying the number
of shares available for issuance by a fraction the numerator of which is the
sum of the number of shares the Participant has elected to purchase pursuant to
Section 5, and the denominator of which is the sum of the number of shares
which all employees have elected to purchase pursuant to Section 5.  Any cash amount remaining in the
Participant’s Plan Account under these circumstances shall be refunded to the
Participant.

(d)           Any
amount remaining in the Participant’s Plan Account caused by a surplus due to
fractional shares after deducting the amount of the Purchase Price for the
number of whole shares issued to the Participant shall be carried over in the
Participant’s Plan Account for the succeeding Purchase Period, without
interest.  Any amount remaining in the
Participant’s Plan Account caused by anything other than a surplus due to
fractional shares shall be refunded to the Participant in cash, without
interest.

(e)           As
soon as practicable following the end of each Purchase Period, the Company
shall deliver to each Participant a Plan Account statement setting forth the
amount of payroll deductions, the Purchase Price, the number of shares
purchased and the remaining cash balance, if any.

Section 9.               Withdrawal
From the Plan.

A Participant may elect to withdraw from participation
under the Plan at any time up to the last day of a Purchase Period by filing
the prescribed form with the Stock Administrator.  As soon as practicable after a withdrawal, payroll deductions
shall cease and all amounts credited to the Participant’s Plan Account will be
refunded in cash, without interest.  A
Participant who has withdrawn from the Plan shall not be a Participant in
future Participation Periods, unless he or she again enrolls in accordance with
the provisions of Section 5.

Section 10.             Effect
of Termination of Employment or Death.

(a)           Termination
of employment as an Eligible Employee for any reason, including death, shall be
treated as an automatic withdrawal from the Plan under Section 9.  A transfer from one Participating Company to
another shall not be treated as a termination of employment.

(b)           A
Participant may file a written designation of a beneficiary who is to receive
any shares and cash, if any, from the Participant’s Account under the Plan in
the event of such Participant’s death subsequent to the purchase of shares but
prior to delivery to him or her of such shares and cash.  In addition, a Participant may file a
written designation of a beneficiary

 

6

 

who is to receive any cash from the Participant’s
Account under the Plan in the event of such Participant’s death prior to the
last day of a Purchase Period.

(c)           Such
designation of beneficiary may be changed by the Participant at any time by
written notice.  In the event of the
death of a Participant in the absence of a valid designation of a beneficiary
who is living at the time of such Participant’s death, the Company shall deliver
such shares and/or cash in accordance with the Participant’s designation of
beneficiaries under the Integrated Device Technology, Inc. 401(k) Savings Plan;
or, in the absence of such designation, to the executor or administrator of the
estate of the Participant; or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of the Participant; or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

Section 11.             Rights
Not Transferable.

The rights or interests of any Participant in the
Plan, or in any Stock or moneys to which he or she may be entitled under the
Plan, shall not be transferable by voluntary or involuntary assignment or by
operation of law, or by any other manner other than as permitted by the Code or
by will or the laws of descent and distribution.  If a Participant in any manner attempts to transfer, assign or otherwise
encumber his or her rights or interest under the Plan, other than as permitted
by the Code or by will or the laws of descent and distribution, such act shall
be treated as an automatic withdrawal under Section 9.

Section 12.             Recapitalization,
Etc.

(a)           The
aggregate number of shares of Stock offered under the Plan, the number and
price of shares which any Participant has elected to purchase pursuant to
Section 5 and the maximum number of shares which a Participant may elect to
purchase under the Plan in any Purchase Period shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Stock
resulting from a subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend, or other increase or decrease in
such shares affected without receipt of consideration by the Company.

(b)           In
the event of a dissolution or liquidation of the Company, or a merger or
consolidation to which the Company is a constituent corporation, this Plan shall
terminate, unless the plan of merger, consolidation or reorganization provides
otherwise, and all amounts which each Participant has paid towards the Purchase
Price of Stock hereunder shall be refunded, without interest.

(c)           The
Plan shall in no event be construed to restrict in any way the Company’s right
to undertake a dissolution, liquidation, merger, consolidation or other
reorganization.

Section 13.             Limitation
on Stock Ownership.

Notwithstanding any provision herein to the contrary,
no Participant shall be permitted to elect to participate in the Plan (i) if
such Participant, immediately after his or her

 

7

 

election to participate, would own stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or any parent or Subsidiary of the Company, or
(ii) if under the terms of the Plan the rights of the Employee to purchase
Stock under this Plan and all other qualified employee stock purchase plans of
the Company or its Subsidiaries would accrue at a rate which exceeds twenty–five
thousand dollars ($25,000) of the Fair Market Value of such Stock (determined
at the time such right is granted) for each calendar year for which such right
is outstanding at any time.  Nothing in
this Section shall cause a Participant’s Date of Participation to be other than
as would be determined pursuant to the Plan without regard to the limitations
set forth in this Section.  For purposes
of this Section, ownership of stock shall be determined by the attribution
rules of Section 425(d) of the Code, and Participants shall be considered to
own any stock which they have a right to purchase under this or any other stock
plan.

Section 14.             No
Rights as an Employee.

Nothing in the Plan shall be construed to give any
person the right to remain in the employ of a Participating Company.  Each Participating Company reserves the
right to terminate the employment of any person at any time and for any reason.

Section 15.             Rights
as a Stockholder.

A Participant shall have no rights as a stockholder
with respect to any shares he or she may have a right to purchase under the
Plan until the date of issuance to the brokerage account designated by the Plan
Administrator the shares of Stock issued pursuant to the Plan.

Section 16.             Use
of Funds.

All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions in separate
accounts.

Section 17.             Amendment
or Termination of the Plan.

Except as otherwise provided herein, the Board of
Directors shall have the right to amend, modify or terminate the Plan at any
time without notice.  An amendment of
the Plan shall be subject to shareholder approval only to the extent required
by applicable laws, regulations or rules.

Section 18.             Governing
Law.

The Plan shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Delaware.

 

8

 

To record the adoption of
this amended and restated Plan, the Company has caused its authorized officer
to execute the same this            day
of                   , 2002.

Integrated Device
Technology, Inc.

 

 

	
   

  	
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9

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