Document:

exhibit4.7PNCAMENDMENTNO4_S4

EXHIBIT 4.7

AMENDMENT NO. 4 TO 
REVOLVING CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 4 (this "Amendment") is entered into as of December 31, 2013, by and among TECUMSEH PRODUCTS COMPANY, a corporation organized under the laws of the State of Michigan (“Tecumseh Products”), TECUMSEH COMPRESSOR COMPANY, a corporation organized under the laws of the State of Delaware (“Tecumseh Compressor”), TECUMSEH PRODUCTS OF CANADA, LIMITED, a Canadian corporation (“Tecumseh Products Canada”), and EVERGY, INC., a corporation organized under the laws of the State of Delaware (“Evergy”) (Tecumseh Products, Tecumseh Compressor, Tecumseh Products Canada, and Evergy are each a “Borrower”, and collectively “Borrowers”), PNC BANK, NATIONAL ASSOCIATION ("PNC"), the various financial institutions named therein or which hereafter become a party thereto (together with PNC, collectively, "Lenders") and PNC, as agent for the Lenders (in such capacity, "Agent").
BACKGROUND
A.    Borrowers, Agent and Lenders are parties to a Revolving Credit and Security Agreement dated as of April 21, 2011, as amended by Amendment No. 1 to Revolving Credit and Security Agreement dated December 30, 2011, as amended by Amendment No. 2 to Revolving Credit and Security Agreement dated November 6, 2013, and as amended by Amendment No. 3 to Revolving Credit and Security Agreement dated as of December 11, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement") pursuant to which Agent and Lenders provide Borrowers with certain financial accommodations; and 
B.    Borrowers have requested that Agent and Lenders, to the extent required under the Loan Agreement, consent to certain actions taken and to be taken with respect to Borrowers’ non-Borrower Subsidiaries and associated intercompany loans; and
D.    Tecumseh Products and Evergy (individually, collectively, and in all combinations, the “Paris, TN Stamping Assets Seller”) desires to (the following described transactions are collectively called the “Paris, TN Stamping Asset Sale”, and the date on which the Paris, TN Stamping Asset Sale closes is called the “Paris, TN Stamping Asset Sale Closing Date”): 
(i)    sell all of its Equipment and Inventory relating exclusively to the stamping business (the “Paris, TN Stamping Business”) conducted by the Paris, TN Stamping Assets Seller at the Real Property commonly known as 2700 West Wood Street, Paris, Tennessee (the “Paris, TN Real Property”) as of the date of this Amendment (the “Paris, TN Stamping Assets”) to Euro Group S.P.A. (“Paris, TN Stamping Assets Buyer”); 
(ii)    lease the portion of the Paris, TN Real Property utilized for the Paris, TN Stamping Business as of the date of this Amendment to the Paris, TN Stamping Assets Buyer for a term of five years, with annual rent of $183,889, payable monthly at a rate of $15,324, together with 50% of the electricity costs, 80% of the natural gas costs, and 50% of water 

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EXHIBIT 4.7

costs for the Paris, TN Real Property (such lease, the “Paris, TN Stamping Assets Buyer Lease”); 
(iii)    grant the Paris, TN Stamping Assets Buyer an option to purchase the entire Paris, TN Real Property during the five-year period beginning with the Paris, TN Stamping Assets Sale Closing Date, with the option purchase price being $1,925,000 less the aggregate amount of rent paid, if the option is exercised within two years of the Paris, TN Stamping Assets Sale Closing Date, and if exercised in the third through fifth years after the Paris, TN Stamping Assets Sale Closing Date, the Fair Market Value of the Paris, TN Real Property as reflected in an appraisal obtained after the Paris, TN Stamping Assets Buyer elects to exercise its option (such option, the “Paris, TN Real Property Option”); and 
(iv) enter into a five-year supply agreement with the Paris, TN Stamping Assets Buyer under which the Paris, TN Stamping Assets Buyer will continue to supply the Paris, TN Stamping Assets Seller with the products produced by the Paris, TN Stamping Business; and 
E.    The Paris, TN Stamping Assets Seller has advised Agent and Lenders that if the Paris, TN Stamping Assets Seller sells the Paris, TN Real Property to the Paris, TN Stamping Assets Buyer as a result of the Paris, TN Stamping Assets Buyer exercising the Paris, TN Real Property Option (the “Paris, TN Real Property Option Sale”), the Paris, TN Stamping Assets Seller intends to lease from the Paris, TN Stamping Assets Buyer a portion of the Paris, TN Real Property to maintain Collateral for use in its winding business and to continue to conduct its winding business at the Paris, TN Real Property (such lease, the “Paris, TN Stamping Assets Seller Lease”).
F.    In connection with the foregoing, Borrowers have requested that Agent and Lenders amend certain provisions of the Loan Agreement, and Agent and Lenders are willing to do so on the terms and conditions in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.Definitions.  All capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan Agreement.
2.    Amendment to Loan Agreement.  
(a)    Section 1.2 of the Loan Agreement is amended to add the following new defined terms in appropriate alphabetical order:
"Amendment No. 4" means Amendment No. 4 to Revolving Credit and Security Agreement among Agent, Lenders, and Borrowers dated as of December 31, 2013.  
“Paris, TN Stamping Asset Sale” has the meaning given in Amendment No. 4.  

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EXHIBIT 4.7

“Paris, TN Stamping Asset Sale Closing Date” has the meaning given in Amendment No. 4.
“Paris, TN Stamping Assets Seller” has the meaning given in Amendment No. 4.
“Paris, TN Stamping Assets Seller Lease” has the meaning given in Amendment No. 4.
“Paris, TN Real Property” has the meaning given in Amendment No. 4.
“Paris, TN Real Property Option” has the meaning given in Amendment No. 4. 
“Paris, TN Real Property Option Sale” has the meaning given in Amendment No. 4. 
“Paris, TN Real Property Option Sale Paydown Amount” has the meaning given in the definition of “Specified Paris, TN Real Property Option Sale Conditions”. 
“Paris, TN Real Property Option Sale Proceeds” has the meaning given in the definition of “Specified Paris, TN Real Property Option Sale Conditions”. 
“Paris, TN Stamping Assets” has the meaning given in Amendment No. 4.
“Paris, TN Stamping Assets Buyer” has the meaning given in Amendment No. 4. 
“Paris, TN Stamping Assets Buyer Lease” has the meaning given in Amendment No. 4.
“Paris, TN Stamping Assets Sale Term Loan Paydown Amount” has the meaning given in definition of “Specified Paris, TN Stamping Assets Sale Conditions”. 
“Specified Paris, TN Real Property Option Sale Conditions” means the satisfaction of all of the following conditions with respect to the Paris, TN Real Property Option Sale: (i) no Default or Event of Default exists or would result from the Paris, TN Real Property Option Sale; (ii) the purchase price is (a) $1,925,000 if the Paris, TN Real Property Option Sale occurs within two years of the Paris, TN Stamping Assets Sale Closing Date, or (b) the Fair Market Value of the Paris, TN Real Property reflected in an appraisal conducted after the Paris, TN Stamping Assets Sale Buyer advises the Paris, TN Stamping Assets Seller of its election to exercise the Paris, TN Real Property Option (the “Updated Fair Market Value”) if the Paris, TN Real Property Option Sale occurs within the third through fifth years following the Paris, TN Stamping Assets Sale Closing Date; (iii) to the extent any Collateral will remain at the Paris, TN Real Property after the Paris, TN Real Property Option Sale, the Paris, TN Stamping Assets Buyer has executed a Lien Waiver Agreement with respect to the Paris, TN Real Property, in form satisfactory to Agent, and which has been delivered to Agent; (iv) the net proceeds of the Paris, TN Real Property Option Sale (i.e., gross proceeds less the reasonable costs of such sales or other 

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dispositions) (the “Paris, TN Real Property Option Sale Proceeds”) are immediately delivered to Agent for application to the Advances in accordance with Section 2.21; (v) the amount delivered to Agent for application to the Advances in accordance with Section 2.21, is equal to the greater of $1,925,000 and, if applicable, the Updated Fair Market Value of the Paris, TN Real Property (in other words, Borrowers may be required to deliver additional funds to Agent for application to the Advances if the Paris, TN Real Property Option Sale Proceeds are less than the minimum amount described in this clause (v)) (the “Paris, TN Real Property Option Sale Paydown Amount”); and (vi) all documents and agreements with respect to the foregoing are reasonably satisfactory to Agent.
“Specified Paris, TN Stamping Assets Sale Conditions” means the simultaneous satisfaction of all of the following conditions with respect to the Paris, TN Stamping Assets Sale: (i) no Default or Event of Default exists or would result from the closing of the Paris, TN Stamping Assets Sale; (ii) the purchase price is not less than $4,300,000 plus the value of the Paris, TN Stamping Assets consisting of Inventory calculated in accordance with the methods detailed on Exhibit B to Amendment No. 4; (iii) the net proceeds of the Paris, TN Stamping Assets Sale (i.e., gross proceeds less the reasonable costs of such sales or other dispositions) (the “Paris, TN Stamping Assets Sale Proceeds”) are immediately delivered to Agent for application to the Advances in accordance with Section 2.21; (iv) the portion of the Paris, TN Stamping Assets Sale Proceeds equal to 80% of the Net Orderly Liquidation Value of the Eligible Equipment being sold in the Paris, TN Stamping Assets Sale is delivered to Agent for application to the Term Loan (the “Paris, TN Stamping Assets Sale Term Loan Paydown Amount”); (v) the Paris, TN Assets Sale Buyer has executed and delivered a subordination agreement in favor of Agent, in recordable form, and otherwise in form satisfactory to Agent in its sole discretion exercised in good faith, subordinating the Paris, TN Real Property Option and the Paris, TN Stamping Assets Buyer Lease to the Mortgage on the Paris, TN Real Property (the “Paris, TN Real Property Option and Lease Subordination”); (vi) the Paris, TN Assets Sale closes by March 31, 2014; and (vii) all documents and agreements with respect to the foregoing are reasonably satisfactory to Agent.
“Term Loan Paydown Amounts” means the Paris, TN Real Property Option Sale Paydown Amount and the Paris, TN Stamping Assets Sale Term Loan Paydown Amount.  
“Updated Fair Market Value” has the meaning given in the definition of “Specified Paris, TN Real Property Option Sale Conditions”. 
(b)    Clause (j) of the defined term “Permitted Encumbrances” is amended to read as follows:
(j)    the Paris, TN Real Property Option in connection with the closing of the Paris, TN Stamping Assets Sale provided the Specified Paris, TN Stamping 

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Assets Sale Conditions were satisfied and the Paris, TN Real Property Option and Lease Subordination is in effect; and

(c)    Section 2.21 of the Loan Agreement is amended to read as follows:
2.21.    Mandatory Prepayments.  Subject to Section 4.3, when any Borrower sells or otherwise disposes of any Collateral other than Inventory in the Ordinary Course of Business, Borrowers shall repay the Advances in an amount equal to the net proceeds of such sale (i.e., gross proceeds less the reasonable costs of such sales or other dispositions), such repayments to be made promptly but in no event more than one (1) Business Day following receipt of such net proceeds, and until the date of payment, such proceeds shall be held in trust for Agent; provided, however, that with respect to the Paris, TN Stamping Assets Sale and the Paris, TN Real Property Option Sale, such repayments must be made simultaneous with the closing of such transactions.  The foregoing shall not be deemed to be implied consent to any such sale otherwise prohibited by the terms and conditions hereof.  Such repayments: (i) from the net proceeds of Equipment sales or Real Property sales shall be first applied to the outstanding principal installments of the Term Loan (in the inverse order of the maturities thereof) until it is paid in full and then to the other Obligations in such order as Agent may determine in its sole discretion, and (ii) from the net proceeds of sales of Collateral other than Equipment or Real Property (other than the sale of Inventory in the Ordinary Course of Business) shall be applied to the Obligations in such order as Agent may determine in its sole discretion; and in each case, subject, if applied to the Revolving Advances, to Borrowers’ ability to reborrow Revolving Advances in accordance with the terms hereof.  Notwithstanding anything to the contrary in the preceding sentence, with respect to the Paris, TN Stamping Assets Sale and the Paris, TN Real Property Option Sale, the repayments comprising the Term Loan Paydown Amounts shall be first applied to the outstanding principal installments of the Term Loan (in the inverse order of the maturities thereof) until it is paid in full and then to the other Obligations in such order as Agent may determine in its sole discretion, and the remainder of the Paris, TN Stamping Assets Sale Proceeds in excess of the  Paris, TN Stamping Assets Sale Term Loan Paydown Amount shall be applied to the Revolving Advances. 

(d)    Section 4.3 of the Loan Agreement is amended to read as follows:
4.3.    Disposition of Collateral.  Each Borrower will safeguard and protect all Collateral for Agent’s general account and make no disposition thereof whether by sale, lease or otherwise except: (a) the sale of Inventory in the Ordinary Course of Business; (b) the disposition or transfer of obsolete and worn-out Equipment in the Ordinary Course of Business during any fiscal year, to the extent that (i) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Agent’s first priority security interest or (ii) the proceeds of which are remitted to Agent to be applied pursuant to Section 2.21 (to the extent that Obligations are outstanding at the time of such sale); (c) the sale of the Paris, TN Stamping Assets 

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in the Paris, TN Stamping Assets Sale and the Paris, TN Stamping Assets Buyer Lease, if the Specified Paris, TN Stamping Assets Sale Conditions are satisfied; and (d) the sale of the Paris, TN Real Property under the Paris, TN Real Property Option and the Paris, TN Stamping Assets Seller Lease, if the Specified Paris, TN Real Property Option Conditions are satisfied.   Agent agrees that if the Specified Paris, TN Stamping Assets Sale Conditions are satisfied in connection with the Paris, TN Stamping Assets Sale, Agent shall take such steps as are necessary to release its Liens on the Paris, TN Stamping Assets.  Agent agrees that if the Specified Paris, TN Real Property Option Sale Conditions are satisfied, Agent shall take such steps as are necessary to release its Liens on the Paris, TN Real Property.

(e)    Section 7.1 of the Loan Agreement is amended to read as follows:
7.1.    Merger, Consolidation, Acquisition and Sale of Assets.

(a)    Enter into any merger, consolidation or other reorganization with or into any other Person or acquire all or a substantial portion of the assets or Equity Interests of any Person or permit any other Person to consolidate with or merge with it.

(b)    Sell, lease, transfer or otherwise dispose of any of its properties or assets, except (i) dispositions of Inventory and Equipment to the extent expressly permitted by Section 4.3, (ii) the Paris, TN Stamping Assets Sale provided the Specified Paris, TN Stamping Assets Sale Conditions are satisfied, (iii) the Paris, TN Real Property Option Sale provided the Specified Paris, TN Real Property Option Sale Conditions are satisfied, (iv) transfers of Equity Interests in Excluded Foreign Subsidiaries to other Excluded Foreign Subsidiaries and the dissolution of non-Borrower Subsidiaries to the extent reflected on Schedule 5.2(b) to this Agreement, and (v) any other sales or dispositions expressly permitted by this Agreement.

(f)    Section 7.5 of the Loan Agreement is amended to read as follows:
7.5.    Loans and Payments on Affiliate Loans.  Make advances, loans or extensions of credit to any Person, including any Parent, Subsidiary or Affiliate except with respect to (a) the extension of commercial trade credit in connection with the sale of Inventory in the Ordinary Course of Business, (b) loans to its employees in the Ordinary Course of Business not to exceed the aggregate amount of $25,000 at any time outstanding, (c) existing and contemplated intercompany loans listed on Schedule 7.5, and (d) loans to Excluded Foreign Subsidiaries and other non-Borrower Subsidiaries as long as (A) no Default or Event of Default is in existence prior to the making thereof or would otherwise arise as a result thereof and (B) Borrowers demonstrate to Agent’s reasonable satisfaction that after giving effect to each such loans, Average Undrawn Availability was greater than $10,000,000 for the immediately preceding 60 days and that on a pro forma basis Average Undrawn Availability for the immediately succeeding 60 day period will not be less than 

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$10,000,000.  In determining whether the Average Undrawn Availability test set forth in this Section 7.5(d) and in Section 7.4(f) has been met, the test will be applied giving consideration to both loans made pursuant to this Section 7.5(d) and investments made pursuant to Section 7.4(f).  Furthermore, no Borrower may make any payment to any Affiliate on any loan or other extension of credit from any Affiliate, except to another Borrower, unless Borrowers would be permitted at that time under this Section to make a loan to an Excluded Foreign Subsidiary or other non-Borrower Subsidiary.

(g)    Section 7.10 of the Loan Agreement is amended to read as follows:
7.10.    Transactions with Affiliates.  Directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or otherwise enter into any transaction or deal with, any Affiliate, except transactions disclosed to the Agent, which are in the Ordinary Course of Business, on an arm’s-length basis on terms and conditions no less favorable than terms and conditions which would have been obtainable from a Person other than an Affiliate.  Notwithstanding anything to the contrary contained in this Section 7.10: (a) if under Section 7.5 Borrowers are allowed to make loans to Excluded Foreign Subsidiaries and other non-Borrower Subsidiaries, then Borrowers may make, or allow to remain outstanding, trade terms and loan terms between any Borrower and its Affiliate that are not on an arms-length basis; and (b) Borrowers may transfer or have transferred Equity Interests in Excluded Foreign Subsidiaries to other Excluded Foreign Subsidiaries to the extent reflected on Schedule 5.2(b) to this Agreement.

3.    Schedules to Loan Agreement.  Attached as Exhibit A are updated Schedules to the Loan Agreement with respect to only Schedule 5.2(b), Schedule 7.4, and Schedule 7.5 (the “Specified Updated Schedules”).  Upon the satisfaction of each Amendment No. 4 Conditions Precedent, such Specified Updated Schedules amend the existing corresponding Schedules to the Loan Agreement for all purposes.
4.    Conditions of Effectiveness of Amendment.  This Amendment is not effective until each of the following conditions precedent (the "Amendment No. 4 Conditions Precedent") have been satisfied to Agent's satisfaction:
(a)    Agent has received fully executed originals of this Amendment.
(b)    All loan documents, including notes, security agreements, guarantees, subordination agreements, landlord waivers, financial statements, legal opinions, evidence of insurance, and other documents, are satisfactory in form and substance to Agent and its legal counsel.
5.    Representations and Warranties.  The parties hereto represent and warrant that this Amendment and the Loan Agreement, as amended hereby, constitute legal, valid and binding obligations of the parties hereto and are enforceable against such parties in accordance with their respective terms.

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6.    Effect on the Agreement.
(a)    Upon the effectiveness of Section 2 hereof, each reference in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like import shall mean and be a reference to the Loan Agreement as amended hereby.
(b)    Except as specifically amended herein, the Loan Agreement, and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.
(c)    The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or Lenders, nor constitute a waiver of any provision of the Loan Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith.
7.    Governing Law.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to any conflicts of laws principles thereto that would call for the application of the laws of another jurisdiction.
8.    Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
9.    Counterparts; Facsimile and PDF.  This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission or electronic transmission in PDF format shall be deemed to be an original signature hereto.
[Remainder of Page Intentionally Left Blank – Signature Page Follows]

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EXHIBIT 4.7

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first written above.
PNC BANK, NATIONAL ASSOCIATION, 
as Lender and as Agent
By: /s/ Todd Milenius                                     
     Todd Milenius, Vice President

ACKNOWLEDGED AND AGREED:
TECUMSEH PRODUCTS COMPANY 
TECUMSEH COMPRESSOR COMPANY 
TECUMSEH PRODUCTS OF CANADA, LIMITED 
EVERGY, INC.
By: /s/ Janice E. Stipp                                                        
Janice E. Stipp, Chief Financial Officer and Treasurer

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EXHIBIT 4.7

EXHIBIT A
SPECIFIED UPDATED SCHEDULES

See Attached.

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EXHIBIT 4.7

EXHIBIT B
INVENTORY CALCULATION METHOD

The price for the Inventory will be as follows:
1)    Finished Goods – in the case of external finished goods at a purchase price equal to the external purchase price most recently used by the Paris, Tennessee Stamping Assets Seller for the external sale of such Inventory item, in the ordinary course of business consistent with its past practice; and in the case of internal finished goods, at a purchase price equal to the cost of material plus the cost of conversion for such inventory item.
2)    Raw Materials – at the purchase price equal to the purchase price most recently paid by Paris, Tennessee Stamping Assets Seller to a supplier of such raw material, in the ordinary course of business consistent with past practice.
3)    Work in Process – at a purchase price equal to the finished goods price of such Inventory item in accordance with paragraph 1 minus 50% of (x) the finished goods price of such Inventory item, as calculated in accordance with paragraph 1 minus (y) the aggregate raw material cost of such Inventory item calculated in accordance with paragraph 2.

11EX10.1 FORM OF PERFORMANCE STOCK AWARD AGREEMENT

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

	
			
	Name of Grantee:
	 

	Total Target Number of Stock Units Subject to this Grant:
	 

	 
	Target Number of EPS Stock Units Subject to this Grant1:
	 

	 
	Target Number of Revenue Stock Units Subject to this Grant1:
	 

	Date of Grant:   
	 

This Notice evidences that you have been granted an award of stock units (the “Stock Units”) of Microsemi Corporation (the “Corporation”) as to the “total target” number set forth above.  Between zero percent (0%) and two hundred fifty percent (250%) of the “total target” number of Stock Units will vest and become nonforfeitable in accordance with the performance-based vesting requirements set forth in the Terms (as defined below). 

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

    
MICROSEMI CORPORATION    ACCEPTED AND AGREED BY GRANTEE

	
						
	By:
	 
	 
	By:
	 

	Name:
	 
	 
	Name:
	 

	Title:
	 
	 
	 
	 

    

 1 Subject to adjustment under Section 7.1 of the Plan.

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

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

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

Except as otherwise expressly provided below in this Section 3, if the Grantee ceases to be employed by or ceases to provide services to the Corporation or one of its Subsidiaries (the date of such termination of employment or services is referred to as the Grantee’s “Severance Date”), the Grantee’s Stock Units shall terminate to the extent such units have not become vested pursuant to Section 2 or Section 8.2 hereof as of the Severance Date (regardless of the reason for such termination of employment or services, whether with or without cause, voluntarily or involuntarily).  
		
	•
	If, however, the Grantee’s employment with the Corporation and its Subsidiaries terminates due to the Grantee’s death or Disability prior to the last day of the FY14-FY16 Performance Period, the Stock Units shall accelerate to such extent that the Total Target Number of Stock Units (as set forth in the Grant Notice) subject to the Award (including any Stock Units that may have vested prior to the date of such event pursuant to Section 2 hereof with respect to the FY14 Performance Period or the FY14-FY15 Performance Period) shall be fully vested as of the date of such 

    

event and any remaining unvested Stock Units subject to the Award (after giving effect to such acceleration, if required) shall terminate as of such event.
		
	•
	If, however, the Grantee’s employment with the Corporation or one of its Subsidiaries terminates prior to the last day of the FY14-FY16 Performance Period (other than due to Grantee’s death or Disability) and, in connection with the Grantee’s Severance Date, the Grantee is entitled to accelerated vesting of his or her outstanding equity awards pursuant to the terms of any written employment, severance or similar agreement with the Corporation in effect at the time of such termination, the Performance Periods then in effect with respect to the Award shall be deemed to end as of the last day of the fiscal quarter of the Corporation in which the Severance Date occurs (subject to the provisions of Section 8.2 below should a Change in Control Event occur before the end of such shortened period), the performance goals set forth in Section 2 shall be adjusted by the Administrator based on the portion of the applicable scheduled Performance Period actually completed during such shortened period of time using the performance goals for that period of time as considered by the Administrator in approving the Award and on which the goals set forth in Section 2 were based, and the Award will vest as of the end of such shortened period as to a number of Stock Units determined in accordance with Section 2 with performance measured for such shortened period.

		
	•
	If, however, the Grantee’s employment with the Corporation or one of its Subsidiaries terminates prior to the last day of the FY14-FY16 Performance Period (other than due to Grantee’s death or Disability, and other than a termination described in the preceding bullet point) and such termination qualifies as a Retirement, the Performance Periods then in effect with respect to the Award shall be deemed to end as of the last day of the fiscal quarter of the Corporation in which the Severance Date occurs (subject to the provisions of Section 8.2 below should a Change in Control Event occur before the end of such shortened period), each of the Target Number of EPS Stock Units and the Target Number of Revenue Stock Units subject to the Award will be pro-rated as described below, the performance goals set forth in Section 2 shall be adjusted by the Administrator based on the portion of the applicable scheduled Performance Period actually completed during such shortened period of time using the performance goals for that period of time as considered by the Administrator in approving the Award and on which the goals set forth in Section 2 were based, and the Award will vest as of the end of such shortened period as to a number of Stock Units determined in accordance with Section 2 with performance measured for such shortened period.  In the event of such a Retirement, each of the Target Number of EPS Stock Units and the Target Number of Revenue Stock Units subject to the Award will be pro-rated as of the Grantee’s Severance Date by multiplying such Target Number of Stock Units otherwise subject to the Award by a fraction, the numerator of which is the total number of calendar days in the FY14-FY16 Performance Period that the Grantee was employed by the Corporation or one of its Subsidiaries and the denominator of which is the total number of calendar days in the FY14-FY16 Performance Period.  If such a Retirement occurs after the FY14 Performance Period, the offset to any pro-rated Stock Units payable with respect to the shortened Performance Period will be based on the actual (not pro-rated) Stock Units paid or payable for any Performance Period ended prior to such Retirement.

    

		
	•
	If the Grantee’s employment with the Corporation and its Subsidiaries terminates on or after the last day of the FY14-FY16 Performance Period due to (i) the Grantee’s death or Disability, (ii) a termination in connection with which the Grantee is entitled to accelerated vesting of his or her outstanding equity awards pursuant to the terms of any written employment, severance or similar agreement with the Corporation in effect at the time of such termination, or (iii) the Grantee’s Retirement, the Grantee will be treated for purposes of the Award as though no such termination of employment had occurred.

With respect to a termination of employment referred to in either of the preceding two bullet points, any remaining unvested Stock Units subject to the Award at the end of the shortened Performance Period shall terminate as of the end of such shortened period.  
For the purposes of the Award, “Disability” has the meaning given to such term in Treas. Reg. Section 1.409A-3(i)(4).  For purposes of the Award, “Retirement” means the Grantee’s Severance Date occurs more than ninety (90) days after the Date of Grant of the Award and, on the Severance Date, the Grantee has attained at least age 65 and has at least 10 years of service to the Corporation and/or its Subsidiaries.
If any unvested Stock Units are terminated pursuant to this Agreement, such Stock Units shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Grantee, or the Grantee’s beneficiary or personal representative, as the case may be.
		
	4.
	Continuance of Employment/Service Required; No Employment Commitment.  

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

On or as soon as administratively practical (and in all events not later than two and one-half months) following the last day of each Performance Period or any Change in Control Event (as such term is defined in Section 8.2), the Corporation shall deliver to the Grantee a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion) 

    

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

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

    

crediting of Stock Units shall be made pursuant to this Section 6.2 with respect to any Stock Units which, as of such record date, have either been paid pursuant to Section 5 or terminated pursuant to the terms hereof.  
		
	7.
	Non-Transferability.  

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

8.1    Adjustments.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan (including, without limitation, an extraordinary cash dividend on such stock), the Administrator shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award.  No such adjustment shall be made with respect to any ordinary cash dividend for which dividend equivalents are credited pursuant to Section 6.2.  For purposes of clarity, Sections A.2 and A.3 of Exhibit A control as to any adjustment of the performance goals, criteria or metrics.
8.2    Change in Control.  If, at any time after the Award Date and before the last day of the FY14-FY16 Performance Period (or, in the case of a “shortened” performance period provided in Section 3, before the last day of such shortened period), a Change in Control Event occurs, the Award shall accelerate to such extent that the greater of the following (after giving effect to and including any Stock Units that may have vested prior to the date of such event pursuant to Section 2 hereof) shall be fully vested as of the date of such event:
		
	•
	the Total Target Number of Stock Units (as set forth in the Grant Notice) subject to the Award; or

		
	•
	the number of Stock Units that would be payable to the Grantee if the FY14-FY16 Performance Period ended as of the last day of the fiscal quarter of the Corporation coinciding with or last preceding the date on which such Change in Control Event occurred, the performance goals set forth in Section 2 shall be adjusted based on the portion of the applicable scheduled Performance Period actually completed during such shortened period of time using the performance goals for that period of time as considered by the Administrator in approving the Award and on which the goals set forth in Section 2 were based, and the Award vested as of the end of such shortened period in accordance with Section 2 with performance measured for such shortened period;

provided, however, that the accelerated vesting otherwise provided for above in this Section 8.2 shall not apply if the Stock Units terminated or were accelerated pursuant to Section 3 prior to the occurrence of such event.  For purposes of the Agreement, “Change in Control Event” means a “change in the ownership” of the Corporation, a “change in effective control” of the Corporation, or a “change in the ownership of a substantial portion of the assets” of the Corporation, within the meaning of Section 409A of the Code. 

    

		
	9.
	Tax Withholding.  

Upon or in connection with the vesting of the Stock Units, the payment of dividend equivalents and/or the distribution of shares of Common Stock in respect of the Stock Units, the Corporation (or the Subsidiary last employing the Grantee) shall have the right at its option to (a) require the Grantee to pay or provide for payment in cash of the amount of any taxes that the Corporation or the Subsidiary may be required to withhold with respect to such vesting, payment and/or distribution, or (b) deduct from any amount payable to the Participant the amount of any taxes which the Corporation or the Subsidiary may be required to withhold with respect to such vesting, payment and/or distribution.  In any case where a tax is required to be withheld in connection with the delivery of shares of Common Stock under the Award Agreement, the Administrator may, in its sole discretion, direct the Corporation or the Subsidiary to reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares or to require the sale of shares of Common Stock in respect to the Stock Units, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy such withholding obligation at the minimum applicable withholding rates. 

		
	10.
	Notices.  

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

The Award and all rights of the Grantee under this Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference.  The Grantee agrees to be bound by the terms of the Plan and this Agreement.  The Grantee acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Agreement.  Unless otherwise expressly provided in other sections of this Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and shall not be deemed to) create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.
		
	12.
	Entire Agreement.  

This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof.  The Plan may be amended pursuant to Section 8.6 of the Plan.  This Agreement may be amended by the Administrator from time to time.  Any such amendment 

    

must be in writing and signed by the Corporation.  Any such amendment that materially and adversely affects the Grantee’s rights under this Agreement requires the consent of the Grantee in order to be effective with respect to the Award.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.
		
	13.
	Limitation on Grantee’s Rights.  

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

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

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

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

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

* * * * *

    

EXHIBIT A
VESTING TERMS AND CONDITIONS
Subject to Sections 3 and 8.2 of the Terms, the percentage of the Total Target Number of Stock Units (as set forth in the Grant Notice) subject to the Award that vest will range from zero percent (0%) to two hundred fifty percent (250%) and will be determined based on the Corporation’s Adjusted EPS, Revenue and Relative TSR Ranking (as such terms are defined below) for the Corporation’s 2014, 2015 and 2016 fiscal years as set forth below in this Exhibit A.  (As set forth in the Grant Notice, sixty percent (60%) of the Total Target Number of Stock Units are referred to as the “Target Number of EPS Stock Units,” and forty percent (40%) of the Total Target Number of Stock Units are referred to as the “Target Number of Revenue Stock Units.”)  The percentage of the Target Number of EPS Stock Units subject to the Award that vest will be determined based on the Corporation’s Adjusted EPS, and the percentage of the Target Number of Revenue Stock Units subject to the Award that vest will be determined based on the Corporation’s Revenue, in each case subject to the effect of a Relative TSR Ranking adjustment for the FY14-FY16 Performance Period.
A.1    Performance-Based Vesting.  
FY14 Performance Period.  Thirty percent (30%) of the Target Number of EPS Stock Units subject to the Award and thirty percent (30%) of the Target Number of Revenue Stock Units subject to the Award will be eligible to vest based on the Corporation’s Adjusted EPS Growth Performance Ranking and Revenue Growth Performance Ranking for the FY14 Performance Period in accordance with the following tables: 
	
		
	Adjusted EPS Growth Performance Ranking for the FY14 Performance Period
	Applicable Percentage

	Less than 20th Percentile
	0%

	20th Percentile
	25%

	50th Percentile or Higher
	100%

	
		
	Revenue Growth Performance Ranking for the FY14 Performance Period
	Applicable Percentage

	Less than 20th Percentile
	0%

	20th Percentile
	25%

	50th Percentile or Higher
	100%

 
    The percentage of the Target Number of EPS Stock Units subject to the Award that vest for the FY14 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Adjusted EPS Growth Performance Ranking for the FY14 Performance Period, multiplied by thirty percent (30%) of the Target Number of EPS Stock Units subject to the Award.  The percentage of the Target Number of Revenue Stock Units subject to the Award that vest for the FY14 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Revenue Growth Performance Ranking for the FY14 Performance Period, multiplied by thirty percent (30%) of the Target Number of Revenue Stock Units subject to the Award.

    

FY14-FY15 Performance Period.  Ninety percent (90%) of the Target Number of EPS Stock Units subject to the Award and ninety percent (90%) of the Target Number of Revenue Stock Units subject to the Award will be eligible to vest based on the Corporation’s Adjusted EPS Growth Performance Ranking and Revenue Growth Performance Ranking for the FY14-FY15 Performance Period in accordance with the following tables: 
	
		
	Adjusted EPS Growth Performance Ranking for the FY14-FY15 Performance Period
	Applicable Percentage

	Less than 20th Percentile
	0%

	20th Percentile
	25%

	50th Percentile or Higher
	100%

	
		
	Revenue Growth Performance Ranking for the FY14 Performance Period
	Applicable Percentage

	Less than 20th Percentile
	0%

	20th Percentile
	25%

	50th Percentile or Higher
	100%

 
    The percentage of the Target Number of EPS Stock Units subject to the Award that vest for the FY14-FY15 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Adjusted EPS Growth Performance Ranking for the FY14-FY15 Performance Period, multiplied by ninety percent (90%) of the Target Number of EPS Stock Units subject to the Award.  The percentage of the Target Number of Revenue Stock Units subject to the Award that vest for the FY14-FY15 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Revenue Growth Performance Ranking for the FY14-FY15 Performance Period, multiplied by ninety percent (90%) of the Target Number of Revenue Stock Units subject to the Award.  Notwithstanding the previous two sentences, the Stock Units subject to the Award that vest for the FY14-FY15 Performance Period will be the number determined pursuant to the preceding two sentences but reduced (but not below zero) by the number of Stock Units subject to the Award that vested for the FY14 Performance Period.
FY14-FY16 Performance Period.  The Target Number of EPS Stock Units subject to the Award and the Target Number of Revenue Stock Units subject to the Award will be eligible to vest based on the Corporation’s Adjusted EPS Growth Performance Ranking, Revenue Growth Performance Ranking and Actual TSR Percentile for the FY14-FY16 Performance Period in accordance with the following tables: 
	
		
	Adjusted EPS Growth Performance Ranking for the FY14-FY16 Performance Period
	Applicable Percentage

	Less than 20th Percentile
	0%

	20th Percentile
	25%

	50th Percentile
	100%

	75th Percentile or Higher
	200%

    

	
		
	Revenue Growth Performance Ranking for the FY14-FY16 Performance Period
	Applicable Percentage

	Less than 20th Percentile
	0%

	20th Percentile
	25%

	50th Percentile
	100%

	75th Percentile or Higher
	200%

 
    The percentage of the Target Number of EPS Stock Units subject to the Award that vest for the FY14-FY16 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Adjusted EPS Growth Performance Ranking for the FY14-FY16 Performance Period, multiplied by the Target Number of EPS Stock Units subject to the Award, subject to the Actual TSR Percentile adjustment described below.  The percentage of the Target Number of Revenue Stock Units subject to the Award that vest for the FY14-FY16 Performance Period will equal the Applicable Percentage determined above based on the Corporation’s Revenue Growth Performance Ranking for the FY14-FY16 Performance Period, multiplied by the Target Number of Revenue Stock Units subject to the Award, subject to the Actual TSR Percentile adjustment described below.  
If the Corporation’s Actual TSR Percentile for the FY14-FY16 Performance Period is in the top quartile of the Company Peer Group, then the Applicable Percentages otherwise determined for the FY14-FY16 Performance Period shall be multiplied by a factor of 1.25.  (For example, an Applicable Percentage otherwise determined as above for the FY14-FY16 Performance Period to be 150% would, after giving effect to such adjustment, if required, become an Applicable Percentage of 187.5%.)  If the Corporation’s Actual TSR Percentile for the FY14-FY16 Performance Period is in the bottom quartile of the Company Peer Group, then the Applicable Percentages otherwise determined for the FY14-FY16 Performance Period shall be multiplied by a factor of 0.75.  (For example, an Applicable Percentage otherwise determined for the FY14-FY16 Performance Period to be 150% would, after giving effect to such adjustment, if required, become a vesting percentage of 112.5%.)  If the Corporation’s Actual TSR Percentile for the FY14-FY16 Performance Period is in the second or the third quartile of the Company Peer Group, then no adjustment shall be made to the Applicable Percentages otherwise determined for the FY14-FY16 Performance Period.
Notwithstanding the prior two paragraphs, the Stock Units subject to the Award that vest for the FY14-FY16 Performance Period will be the number determined pursuant to the preceding two paragraphs but reduced (but not below zero) by the aggregate number of Stock Units subject to the Award that vested for the FY14 Performance Period and the FY14-FY15 Performance Period.  
General.  For each of the tables above, the applicable vesting percentage will be interpolated on a linear basis between the levels stated in the applicable table and fractional shares shall be rounded to the nearest whole share.
Any Stock Units that do not vest based on the performance requirements set forth in this Exhibit A (and which have not previously vested or terminated pursuant to the terms of this Agreement) will automatically terminate as of the last day of the FY14-FY16 Performance Period.  The number of Stock Units that vest based on performance as of the end of the 

    

applicable Performance Period will be determined by the Administrator following the end of the applicable Performance Period, and payment of vested Stock Units will be made as provided in Section 5 of the Terms.  Any such determination by the Administrator shall be final and binding.
A.2    Defined Terms.
For purposes of the Award, the following definitions will apply: 
“Actual TSR Percentile” means the percentile ranking of the Corporation’s TSR among the TSRs for the Company Peer Group members for the FY14-FY16 Performance Period.
“Adjusted EPS” means, as to the Corporation and any other Company Peer Group member for a particular Performance Period, the reported earnings per share of that entity for that particular Performance Period (using the calculation, whether in accordance with Generally Accepted Accounting Principles (“GAAP”) or non-GAAP, principally used by that entity to publicly report its earnings per share for that period), subject to the adjustments described below.
“Adjusted EPS Growth Performance Ranking” means, as to a particular Performance Period, the ranking of the Corporation’s Adjusted EPS growth for that Performance Period relative to the Adjusted EPS growth levels for that Performance Period for the companies (including the Corporation) comprising the Company Peer Group.  The Adjusted EPS Growth Performance Ranking for any particular entity within the Company Peer Group shall be determined based on the Company Peer Group member’s Adjusted EPS for the fiscal quarters of such entity that end during the applicable Performance Period, when compared with the Company Peer Group member’s Adjusted EPS for the four consecutive fiscal quarters of such entity that ended immediately prior to the applicable Performance Period, all as determined by the Administrator based on information publicly available to the Administrator at the time it makes such determination.
“Applicable Percentage” means, as to a particular Performance Period, a percentage determined based on the Corporation’s Adjusted EPS Growth Performance Ranking or Revenue Growth Performance Ranking, as applicable, for that Performance Period.
“Beginning Price” means, with respect to the Corporation and any other Company Peer Group member, the closing stock price of such company’s common stock on the principal exchange on which such stock is traded for the last trading day immediately preceding the start of the applicable Performance Period.
“Company Peer Group” means the Corporation and each of the following companies:

    

	
		
	Aeroflex Holding Corporation
	M/A-COM Technology Solutions Inc. 

	Amkor Technology, Inc.
	Maxim Integrated Products, Inc.

	Atmel Corporation
	Mercury Systems, Inc.

	AVX Corporation
	Micrel, Inc.

	Cypress Semiconductor Corporation
	Microchip Technology, Inc.

	Diodes, Inc.
	MKS Instruments

	Fairchild Semiconductor International, Inc.
	ON Semiconductor Corporation

	Freescale Semiconductor Ltd.
	PMC Sierra, Inc.

	Hittite Microwave Corporation 
	Power Integrations, Inc.

	Integrated Device Technology, Inc.
	Silicon Laboratories, Inc.

	International Rectifier Corporation
	Skyworks Solutions, Inc.

	Intersil Corporation
	TriQuint Semiconductor Inc

	Linear Technology Corporation
	Vishay Intertechnology, Inc.

	LSI Corporation
	

The Company Peer Group shall be subject to adjustment by the Administrator for changes that occur prior to the end of the applicable Performance Period as follows:  In the event of a merger or other business combination of two Company Peer Group members (including, without limitation, the acquisition of one Company Peer Group member, or all or substantially all of its assets, by another Company Peer Group member), the surviving, resulting or successor entity, as the case may be, shall continue to be treated as a member of the Company Peer Group, provided that the common stock (or similar equity security) of such entity is listed or traded on a national securities exchange as of the end of the FY14-FY16 Performance Period.  In the event that the common stock (or similar equity security) of a Company Peer Group member is otherwise not listed or traded on a national securities exchange at the end of the FY13-FY15 Performance Period, such entity shall be excluded from the Company Peer Group.
“Ending Price” means, with respect to the Corporation and any other Company Peer Group member, closing stock price of such company’s common stock on the principal exchange on which such stock is traded for the last trading day occurring in the applicable Performance Period. 
“FY14 Performance Period” means the Corporation’s 2014 fiscal year.
“FY14-FY15 Performance Period” means the Corporation’s 2014 and 2015 fiscal years.
“FY14-FY16 Performance Period” means the Corporation’s 2014, 2015 and 2016 fiscal years.
“Performance Period” means either the FY14 Performance Period, the FY14-FY15 Performance Period, or the FY14-FY16 Performance Period, as applicable.
“Revenue” means, as to the Corporation and any other Company Peer Group member for a particular Performance Period, the reported revenue of that entity for that particular Performance Period (using the calculation, whether in accordance with GAAP or non-GAAP, principally used by the Corporation to publicly report its revenue for that period).
“Revenue Growth Performance Ranking” means, as to a particular Performance Period, the ranking of the Corporation’s Revenue growth for that Performance Period relative to 

    

the Revenue growth levels for that Performance Period for the companies (including the Corporation) comprising the Company Peer Group.  The Revenue Growth Performance Ranking for any particular entity within the Company Peer Group shall be determined based on the Company Peer Group member’s Revenue for the fiscal quarters of such entity that end during the applicable Performance Period, when compared with the Company Peer Group member’s Revenue for the four consecutive fiscal quarters of such entity that ended immediately prior to the applicable Performance Period, all as determined by the Administrator based on information publicly available to the Administrator at the time it makes such determination.
“TSR” means total shareholder return and shall be determined with respect to the Corporation and any other Company Peer Group member by dividing: (a) the sum of (i) the difference obtained by subtracting the Beginning Price from the Ending Price plus (ii) all dividends and other distributions for which the ex-dividend date (or similar date in the case of a distribution other than a dividend) related to such dividend or other distribution occurs during the FY14-FY16 Performance Period by (b) the Beginning Price.  Any non-cash distributions shall be ascribed such dollar value as may be determined by or at the direction of the Administrator.
A.3    Adjustments.  For purposes of the Award, the Administrator shall adjust the Adjusted EPS and Revenue (in each case, of the Corporation and any Company Peer Group member, as applicable) to the extent (if any) it determines that the adjustment is necessary or advisable to preserve the intended incentives and benefits to reflect (1) any material corporate transaction (such as a reorganization, combination, separation, merger, acquisition, or any combination of the foregoing), or any complete or partial liquidation of the Corporation, (2) any change in accounting policies or practices, or (3) the effects of any special charges to the Company’s earnings.  In addition, the Administrator shall make adjustments to the Ending Price and/or TSR and Adjusted EPS (in each case, of the Corporation and any Company Peer Group member, as applicable) to eliminate (to the extent necessary and without duplication) the impact of any stock splits, reverse stock splits, and stock dividends.  The Administrator’s determination of Adjusted EPS, Revenue, TSR, Adjusted EPS Growth Performance Ranking and Revenue Growth Performance Ranking, and Actual TSR Percentile for each Performance Period and whether, and the extent to which, any such adjustment is necessary shall be final and binding.  
* * * * *

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