Document:

Exhibit 10.3 Performance-Based Stock Option Award Agreement

    Exhibit
      10.3

    

    PERFORMANCE-BASED
      STOCK OPTION AWARD AGREEMENT

    UNDER
      THE

    M/I
      HOMES, INC. 

    1993
      STOCK INCENTIVE PLAN

    AS
      AMENDED

    

    This
      Performance-Based Stock Option Award Agreement (this “Agreement”) is made as of
      _______________, 2007, by and between M/I Homes, Inc., an Ohio corporation
      (the
“Company”), and ____________________ (the “Employee”).

    

    WHEREAS,
      on November 17, 1998, the Board of Directors of the Company adopted, and on
      April 22, 1999, the shareholders approved, the M/I Homes, Inc. 1993 Stock
      Incentive Plan as Amended (the “Plan”), pursuant to which awards of restricted
      stock, options and stock appreciation rights may be granted to the Company’s
      employees, officers, directors, consultants and advisors; and 

    

    WHEREAS,
      in recognition of the valuable services provided by and to be provided by the
      Employee, the Company has determined that its interests will be advanced by
      providing an incentive to the Employee to acquire a proprietary interest in
      the
      Company and, as a shareholder, to share in its success and thereby have added
      incentive to work effectively for and in the interests of the Company and its
      affiliates; and

    

    WHEREAS,
      the Employee has acquired and/or shall acquire during his/her employment a
      considerable amount of confidential and proprietary information with respect
      to
      the business of the Company and its affiliates, which confidential and
      proprietary information is very valuable to the Company and would be extremely
      detrimental to the Company if disclosed or used by the Employee, other than
      in
      the performance of his/her duties as an employee of the Company and/or its
      affiliates; and

    

    WHEREAS,
      the Employee desires to participate in the Plan.

    

    NOW,
      THEREFORE, in consideration of the mutual promises and of the covenants and
      agreements hereinafter set forth and for other good and valuable consideration,
      the parties hereby agree as follows:

    

    Section
      1. Award

    

    The
      Company hereby grants to the Employee, and the Employee hereby accepts from
      the
      Company, the right, privilege and option (the “Option”) to purchase
      _______________ shares of the Company’s common stock, $.01 par value (“Shares”),
      subject to the terms and conditions set forth in the Plan and this
      Agreement.

    

    Section
      2. Status
      of Option

    

    (a) Subject
      to Plan.
      The
      Option and the manner of and the conditions placed upon its exercise shall
      be
      subject to all of the terms and conditions of this Agreement and of the Plan,
      as
      interpreted and administered by the Committee. In the event of a conflict
      between the terms of this Agreement and the terms of the Plan, the terms of
      the
      Plan shall govern. All capitalized terms that are used in this Agreement but
      are
      not defined in this Agreement shall have the meanings ascribed to such terms
      in
      the Plan. 

    

    (b) Intended
      Tax Status.
      It is
      the intention of the Company that the Option shall not be treated as an
“incentive stock option” in accordance with Section 422 of the Internal Revenue
      Code of 1986, as amended.

    

    Section
      3. Exercise
      Price of Shares

    

    The
      purchase price of the Shares subject to the Option shall be $_______ per Share
      (the “Exercise Price”).

    

    Section
      4. Time
      of Exercise of Option

    

    (a) Subject
      to the provisions of Sections 6 and 7, the Option shall vest and become
      exercisable in accordance with the following provisions:

    

    (i) As
      soon
      as reasonably practical after the conclusion of the fiscal year of the Company
      ending on December 31, 2007, the Committee shall determine the extent to which
      the performance measures described in Exhibit A attached hereto and made a
      part
      of this Agreement (the “Performance Measures”) are satisfied. Based upon this
      determination, a percentage (between 0% and 100% as set forth in Exhibit A)
      of
      the Shares subject to the Option shall remain eligible to vest and be purchased
      through the exercise of the Option pursuant to the provisions of Section
      4(a)(ii) below (the “Available Option Shares”). The portion of the Option
      attributable to Shares, if any, that do not become Available Option Shares
      pursuant to the preceding provisions of this Section 4(a)(i) shall be deemed
      to
      have lapsed and to have been forfeited as of December 31, 2007.

    

    (ii) The
      Available Option Shares (as determined pursuant to the provisions of Section
      4(a)(i) above and the provisions of Exhibit A), if any, shall vest and become
      available for purchase through the exercise of the Option in accordance with
      the
      following schedule: 

    

    
      	
              Percentage
                of Available Option

              Shares
                that Vest and Become Available for Purchase

              Upon
                Exercise of Option

            	
               

               

              Vesting
                Date

            
	 	 
	
              20%
                of the Available Option Shares

            	
              12/31/2007

            
	 	 
	
              An
                additional 20% of the Available Option Shares

            	
              12/31/2008

            
	 	 
	
              An
                additional 20% of the Available Option Shares

            	
              12/31/2009

            
	 	 
	
              An
                additional 20% of the Available Option Shares

            	
              12/31/2010

            
	 	 
	
              An
                additional 20% of the Available Option Shares

            	
              12/31/2011

            

    

    

    provided,
      however,
      that
      the Employee must remain continuously employed by the Company or any of its
      affiliates from the date of this Agreement until the applicable Vesting Date
      in
      order for the Available Option Shares scheduled to vest and become available
      for
      purchase on that Vesting Date to actually vest and become available for
      purchase.

    

    (b)(i) In
      the
      event that, prior to January 1, 2008, a Change of Control occurs or the Employee
      dies or suffers a disability (as defined in the Plan), the Option shall vest
      and
      become immediately exercisable with respect to all Shares described in Section
      1. 

    

    (ii) In
      the
      event that, on or after January 1, 2008, a “Change of Control” occurs or the
      Employee dies or suffers a disability, the Option shall vest and become
      immediately exercisable with respect to all Available Option Shares, if any,
      which have not previously been purchased by the Employee. 

    

    (iii) Subject
      to Section 4(b)(i), the Employee hereby acknowledges that he/she (or, in the
      case of the Employee’s death, his/her beneficiary) may not exercise the Option
      prior to the Committee’s determination of the extent to which the Performance
      Measures have been satisfied and the number of the Available Option Shares
      in
      accordance with Section 4(a)(i) and Exhibit A. 

    

    (c) The
      Option shall lapse and be forfeited to the extent not exercised on or before
      its
      termination in accordance with Section 7.

    

    Section
      5. Method
      of Exercise of Option

    

    (a) Subject
      to the relevant provisions of the Plan, the Employee shall exercise the Option
      with respect to all or any number of full Available Option Shares then subject
      to exercise by written notice to the Committee in the form attached hereto.
      Such
      notice shall either be accompanied by (i) a certified check, bank draft, postal
      or express money order, personal check (if approved by the Committee), or Shares
      previously acquired by the Employee in full payment of the Exercise Price of
      the
      Available Option Shares to be purchased; or (ii) a statement, in substantially
      the form attached hereto directing that (A) the certificates for the Available
      Option Shares for which the Option is exercised be delivered to a licensed
      broker acceptable to the Company as the agent for the individual exercising
      the
      Option and (B) at the time such certificate or certificates are delivered,
      the
      broker shall tender to the Company cash (or cash equivalents acceptable to
      the
      Company) equal to the Exercise Price for the Available Option Shares purchased
      pursuant to the exercise of the Option plus the amount (if any) of federal
      and/or other taxes which the Company may in its judgment, be required to
      withhold with respect to the exercise of the Option.

    

    (b) If
      the
      Option is being exercised by the Employee’s Beneficiary, the Beneficiary’s
      notice of exercise to the Committee shall be accompanied by proof satisfactory
      to the Committee of the right of such Beneficiary to exercise the Option under
      this Agreement, the Plan and all applicable laws and regulations.

    

    Section
      6. Conditions
      on Exercise

    

    Notwithstanding
      any provision to the contrary in this Agreement:

    

    (a) The
      exercise of any portion of the Option or the Company’s obligation to deliver
      Shares upon the exercise of the Option is subject to the satisfaction, in the
      Committee’s sole and absolute discretion, of the following
      conditions:

    

    (i) any
      withholding liabilities;

    

    (ii) any
      restrictions imposed by any securities exchange or under federal or state law
      with respect to the listing, registration or qualification of any Shares to
      be
      delivered; and

    

    (iii) any
      consent or approval of any regulatory body, the Board of Directors of the
      Company or the Company’s shareholders.

    

    (b) The
      Company’s obligation to deliver Shares upon the exercise of any portion of the
      Option is further subject to the conditions that:

    

    (i) the
      Employee is not, at the time of exercise, in material breach of any of his
      or
      her obligations under this Agreement, or under any other agreement with the
      Company;

    

    (ii) no
      preliminary or permanent injunction or other order against the delivery of
      the
      Shares issued by any federal or state court of competent jurisdiction in the
      United States shall be in effect;

    

    (iii) there
      shall not be in effect any federal or state law, rule or regulation which
      prevents or delays delivery of the Shares or payment, as appropriate;
      and

    

    (iv) the
      Employee or Beneficiary exercising the Option shall confirm any factual matters
      reasonably requested by the Committee, the Company or counsel for the
      Company.

    

    Section
      7. Termination
      of Option

    

    The
      Option granted hereunder, to the extent not theretofore exercised, shall
      terminate upon the first to occur of the following dates:

    

    (a) December
      31, 2007, with respect to Shares that do not become Available Option Shares
      pursuant to the provisions of Section 4(a)(i) and Exhibit A;

    

    (b) the
      expiration of thirty (30) days after the date on which the Employee’s employment
      by the Company or any of its affiliates terminates for any reason other than
      the
      retirement (as defined in the Plan), death or disability of the
      Employee;

    

    (c) the
      expiration of one (1) year after the date of the Employee’s retirement, death or
      disability;

    

    (d) the
      expiration of fifteen (15) days after the occurrence of a Change of Control;
      or

    

    (e) the
      tenth
      anniversary of the date of this Agreement.

    

    Section
      8. Rights
      of Shareholder

    

    Neither
      the Employee nor his or her Beneficiary, executor, administrator, heirs or
      legatees shall have any rights of a shareholder in the Company with respect
      to
      the Shares covered by the Option unless and until a certificate representing
      such Shares has been duly issued and delivered to him or her pursuant to this
      Agreement. Nothing in this Agreement shall be deemed to confer on the Employee
      any right to continue in the employ of the Company or any of its affiliates
      or
      to interfere in any way with the right of the Company or, if applicable, its
      affiliates to terminate his or her employment at any time.

    

    Section
      9. Option
      Nontransferable

    

    The
      Option shall not be assignable or transferable, or subject to any disposition,
      including hypothecation, by the Employee otherwise than by will and the laws
      of
      descent and distribution. Any such transfer, disposition, pledge or
      hypothecation shall be null and void. The Option shall not be subject to
      execution, attachment or similar process except with the express consent of
      the
      Company. During the lifetime of the Employee, the Option shall be exercisable
      only by him or her.

    

    Section
      10. Employee
      Covenants

    

    In
      consideration for the granting of the Option, the Employee hereby covenants
      and
      agrees as follows:

    

    (a) The
      Employee shall not at any time, directly or indirectly, disclose to any other
      person, corporation, partnership, proprietorship or other business enterprise,
      or otherwise use any “Data of a Confidential Nature” except in the performance
      of his/her duties as an employee of the Company and/or an affiliate with respect
      to the business of the Company and its affiliates. Employee agrees that all
      Company materials evidencing, reflecting or containing “Data of a Confidential
      Nature” are and shall remain the sole and exclusive property of the Company and
      that upon termination of the Employee’s employment with the Company and its
      affiliates, all such materials, including but not limited to, records, drawings,
      blueprints, manuals, brochures, pamphlets and all other materials will be
      returned to the Company. As used herein “Data of a Confidential Nature”
includes, but is not limited to cost, price and customer data, any information
      on land acquisition programs, information on the Company’s (or any affiliate’s)
      plans to acquire new properties or business, information on the Company’s (or
      any affiliate’s) compensation programs, information regarding relocations of
      existing facilities, new properties or business, major changes in organization,
      competitive bid information, prices paid or received for goods or services,
      processes, plans, methods of doing business, special needs of customers, or
      any
      other information or data which if published, released, or otherwise
      disseminated might be used to the detriment of the Company, its affiliates
      or
      their management or affect their ability to transact business.

    

    (b) The
      Employee shall not, at any time, directly or indirectly, or in concert with
      any
      other person, corporation, partnership, proprietorship or other business
      enterprise:

    

    (i) induce
      or
      attempt to induce any employee or agent of the Company or any of its affiliates
      to leave the employ of the Company or any of its affiliates; or

    

    (ii) employ
      (or engage to act, directly or indirectly, as an independent contractor or
      agent) any employee or agent of the Company or any of its affiliates within
      six
      (6) months following termination of such employee’s employment or of such
      agent’s agency with the Company or any of its affiliates.

    

    (c) In
      the
      event that any covenant set forth in subparagraph (b) shall be determined by
      a
      court of competent jurisdiction to be unenforceable because it extends over
      too
      great a period of time, or for any other reason, such covenant shall be
      interpreted to extend only over the maximum time period or to the maximum extent
      to which they may be enforceable.

    

    (d) The
      covenants set forth in subparagraphs (a) and (b) shall remain in effect
      regardless of whether the Employee exercises the Option in whole or in
      part.

    

    The
      Employee acknowledges that a breach of the covenants set forth in this Section
      10 may cause irreparable damage to the Company and its affiliates, the extent
      of
      which may be difficult to ascertain, and that the award of damages may not
      be
      adequate relief. The Employee agrees that, in the event of a breach or
      threatened breach of the covenants contained in this Section 10, the Company
      may
      institute an action to compel the specific performance of such covenants, and
      that such remedy shall be cumulative, not exclusive, and shall be in addition
      to
      any other available remedies.

    

    The
      Employee recognizes and understands that the Employee has acquired and/or shall
      acquire during his or her employment with the Company and/or its affiliates
      a
      considerable amount of confidential and proprietary information with respect
      to
      the business of the Company and its affiliates, which confidential and
      proprietary information is very valuable to the Company and would be extremely
      detrimental to the Company if disclosed or used by the Employee other than
      in
      the performance of his or her duties as an employee of the Company and/or its
      affiliates. The Employee further acknowledges that the employees of the Company
      and its affiliates are an integral part of the Company’s business and, thus, it
      is important for the Company and its affiliates to use their maximum efforts
      to
      prevent the loss of such employees.

    

    Section
      11. Miscellaneous

    

    (a) No
      provision of this Agreement may be modified, waived or discharged unless such
      modification, waiver or discharge is agreed to in a writing signed by the
      parties to this Agreement.

    

    (b) No
      fractional Shares or other securities shall be issued or delivered pursuant
      to
      this Agreement, and the Committee in its sole discretion shall determine (except
      as otherwise provided in the Plan) whether cash, other securities, or other
      property shall be paid or transferred in lieu of any fractional Shares or other
      securities, or whether such fractional Shares or other securities or any rights
      thereto shall be canceled, terminated, or otherwise eliminated.

    

    (c) No
      agreement or representations, express or implied, with respect to the subject
      matter hereof have been made by either party which are not set forth expressly
      in this Agreement or the Plan.

    

    (d) This
      Agreement shall be construed and enforced in accordance with and governed by
      the
      laws of the State of Ohio. Any action brought relating to this Agreement must
      be
      forumed and venued in a court of appropriate jurisdiction located within
      Franklin County, Ohio. The Employee hereby consents to the jurisdiction of
      the
      courts of Franklin County, Ohio with respect to any action brought against
      the
      Employee by the Company under this Agreement.

    

    (e) To
      the
      extent that the exercise of the Option results in income to the Employee for
      any
      federal or state income tax purposes, no later than the date as of which such
      tax withholding is first required, the Employee shall pay to the Company, or
      make arrangements satisfactory to the Company regarding the payment of, any
      federal or state income tax required to be withheld with respect to such amount.
      If the Employee fails to do so, then the Company is authorized to withhold
      from
      any cash remuneration then or thereafter payable to the Employee any tax
      required to be withheld by reason of such resulting compensation income.

    

    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed and
      made
      effective the day and year first above written.

    

    EMPLOYEE:                          COMPANY:

    

                    
M/I
      Homes, Inc.

    

    

    
      	 	 	 	
              By:

            	 
	 	 	 	 	 
	
              Date:

            	 	 	
              Title:

            	 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBIT
      A

    TO

    PERFORMANCE-BASED
      STOCK OPTION AWARD AGREEMENT

    UNDER
      THE

    M/I
      HOMES, INC.

    1993
      STOCK INCENTIVE PLAN

    AS
      AMENDED

    

    The
      Performance Measures to be satisfied as of December 31, 2007 for purposes of
      Section 4(a) of the Agreement will be based (1) 60% on the Company’s actual net
      income in 2007, (2) 20% on homebuyer satisfaction ratings in 2007 and (3) 20%
      on
      the Company’s return on beginning equity (“ROE”) in 2007 as
      follows:

    

    1. Actual
      Net Income

    
      	
               

              %
                of 2007 Budgeted Net Income

            	
              %
                of Shares

              Becoming
                Available Option Shares

            
	
              Less
                than 40%

            	
              0%

            
	
              40%

            	
              3%

            
	
              100%

            	
              22%

            
	
              150%

            	
              31%

            
	
              200%

            	
              44%

            
	
              900%

            	
              60%

            

    

    

    The
      percentage of Shares becoming Available Option Shares will increase
      proportionately between the percentage levels of 2007 Budgeted Net
      Income.

    

    2. Homebuyer
      Satisfaction Rating

    
      	
               

              %
                of Positive Ratings in 2007

            	
              %
                of Shares

              Becoming
                Available Option Shares

            
	
              Less
                than 79%

            	
              0%

            
	
              79%

            	
              2%

            
	
              88%

            	
              20%

            

    

    

    The
      percentage of Shares becoming Available Option Shares will increase
      proportionately between the percentage levels of Positive Ratings in 2007;
      provided,
      however, that, if the Company’s actual net income in 2007 is less than the
      Company’s 2007 budgeted net income, the percentage of Shares becoming Available
      Option Shares (as determined by the above table) will be reduced, on a pro-rata
      basis, based on the percentage of the 2007 budgeted net income achieved by
      the
      Company. For purposes of this Section 2, “% of Positive Ratings in 2007” means
      the percentage of the respondents to the Company’s homeowner survey who
      responded “yes” to the question “Would you recommend M/I homes to a friend or
      relative?”

    

    3. ROE

    
      	
               

              ROE
                %

            	
              %
                of Shares

              Becoming
                Available Option Shares

            
	
              Less
                than 10%

            	
              0%

            
	
              10%

            	
              10%

            
	
              20%

            	
              20%

            

    

    

    The
      percentage of Shares becoming Available Option Shares will increase
      proportionately between the percentage levels of ROE in
      2007.Exhibit 4.1

    

      EXHIBIT
        4.1

      

      MICROCHIP
        TECHNOLOGY INCORPORATED

      INTERNATIONAL
        EMPLOYEE STOCK PURCHASE PLAN

      AS
        AMENDED THROUGH MAY 1, 2006

       

      
        	
                I.

              	
                PURPOSE

              

      

      

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

      

      
        	
                II.

              	
                DEFINITIONS

              

      

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

      
        
          
          

        

        
          
          

          
            

          

        

         

      

      
        	
                III.

              	
                ADMINISTRATION

              

      

      

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

      

      
        	
                IV.

              	
                PURCHASE
                  PERIODS

              

      

       

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

        

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

        

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

        

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

        

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

        
          	
                  V.

                	
                  ELIGIBILITY
                    AND
                    PARTICIPATION

                

        

      

      

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

      

      
        
          
          

        

        
          2

          
            

          

        

         

      

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

       

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

      

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

        

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

      

       

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

       

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

      

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

      

        
          	
                  VI.

                	
                  STOCK
                    SUBJECT TO PLAN

                

        

      

       

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

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        market.
          The total number of shares reserved under the Plan is 348,5931 shares
          plus
          beginning January 1, 2007, and each January 1 thereafter during the term
          of the
          Plan, an automatic annual increase in shares reserved of one tenth of one
          percent (0.1%)of the then outstanding shares of Microchip Common
          Stock.
          The
          total number of shares which may be issued under the Plan shall not exceed
          the
          number reserved.

        

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

         

        
          	
                  VII.

                	
                  PURCHASE
                    RIGHTS

                

        

        
           

        

      

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

      

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

      

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

      

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

      __________________

       

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

      
        
          
          

        

        
          4

          
            

          

        

         

      

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

      

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

      

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

      

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

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

      

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

      
        
          
          

        

        
          5

          
            

          

        

         

      

       

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

      

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

       

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

      

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

      

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

      

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

      

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

      
        
          
          

        

        
          6

          
            

          

        

         

      

       

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

      

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

      

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

       

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

       

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

       

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

      

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

      

        
          	
                  VIII.

                	
                  AMENDMENT
                    AND TERMINATION

                

        

      

       

      The
        Plan
        has been established voluntarily by Microchip. The Microchip Board of Directors
        may alter, amend, suspend or discontinue the Plan with respect to one or
        more
        Foreign Subsidiaries following the end of any purchase period. The Microchip
        Board may also terminate the Plan in its entirety

      
        
          
          

        

        
          7

          
            

          

        

         

      

      immediately
        following the end of any purchase period. In such event, no further purchase
        rights shall thereafter be granted or exercised, and no further payroll
        deductions shall thereafter be collected, under the Plan. 

      

        
          	
                  IX.

                	
                  GENERAL
                    PROVISIONS

                

        

      

      

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

        

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

        

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

        

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

        

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

        

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

        

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

      

       

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

      
         

        
          8

          
            

          

        

         

      

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

      

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

      

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

      

      

        

        
 

      

      
        
          
          

        

        
          9

          
            

          

        

         

      

      SCHEDULE
        A

      

      LIST
        OF FOREIGN SUBSIDIARIES

      PARTICIPATING
        IN THE 

      INTERNATIONAL
        EMPLOYEE STOCK PURCHASE PLAN

      AS
        OF MAY 1, 2006

      

       

      Australia
        - Microchip
        Technology Australia PTY Ltd.

      

      Austria
        -
        Microchip Technology Austria GmbH

      

      Canada
        -
        Microchip Technology Canada Inc. and Microchip Technology Canada

      

      Denmark
        -
        Microchip Technology Nordic ApS (Denmark)

      

      France
        -
        Microchip Technology Sarl

      

      Germany
        -
        Microchip Technology GmbH

      

      Hong
        Kong
        -
        Microchip Technology Hong Kong Ltd.

      

      India
        -
        Microchip Technology Designs (India) Private Limited

      

      Ireland
        -
        Microchip Technology Ireland Limited

      

      Italy
        -
        Microchip Technology SRL

      

      Japan
        -
        Microchip Technology Japan K.K.

      

      Korea
        -
        Microchip Technology Korea Ltd.

      

      Malaysia
        -
        Arizona Microchip Technology (Malaysia) Sdn Bhd

      

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

      

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

      

      Philippines
        -
        Microchip Technology (Philippines) Corporation

      

      Romania
        -
        Microchip Technology SRL

      

      Singapore
        -
        Microchip Technology Singapore Pte Ltd.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (Cont’d)
        

      LIST
        OF FOREIGN SUBSIDIARIES

      PARTICIPATING
        IN THE 

      INTERNATIONAL
        EMPLOYEE STOCK PURCHASE PLAN

      AS
        OF MAY 1, 2006

      

      

      Spain
        -
        Microchip Technology S.L.

      

      Switzerland
        -
        Microchip Technology Switzerland S.A.

      

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

      

      Thailand
        -
        Arizona Microchip Technology (Thailand) Ltd.

      

      United
        Kingdom
        -
        Microchip Limited

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