Document:

Exhibit

MICROSEMI CORPORATION 
FISCAL 2016 EXECUTIVE NON-EQUITY INCENTIVE PLAN
		
	1.
	Purpose.

The purpose of this Microsemi Corporation Fiscal 2016 Executive Non-Equity Incentive Plan (this “Plan”) is to promote the success of Microsemi Corporation, a Delaware corporation, (the “Company”) by (i) compensating and rewarding participating executives with bonuses for the achievement of pre-established performance goals and (ii) motivating such executives by giving them opportunities to receive bonuses directly related to such performance.  This Plan is intended to provide bonuses that qualify as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code.  This Plan is adopted under Section 5.2 of the Company’s 2008 Performance Incentive Plan, as amended (the “Performance Incentive Plan”). 
		
	2.
	Definitions. 

“Adjusted EPS” means, as to the Company and any other Company Peer Group member, the reported earnings per share of that entity for the applicable 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 in Section 4.7 below.
“Adjusted EPS Growth Performance Ranking” means the ranking of the Company’s Adjusted EPS growth for the FY16 Performance Period relative to the Adjusted EPS growth levels for the FY16 Performance Period for the companies (including the Company) 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 FY16 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 FY16 Performance Period, all as determined by the Committee based on information publicly available to the Committee at the time it makes such determination.
“Adjusted Net Cash Flow From Operations” means, as to the Company and any other Company Peer Group member, the reported net cash flow from operations of that entity for the applicable Performance Period (using the calculation, whether in accordance with GAAP or non-GAAP, principally used by that entity to publicly report its earnings per share for that period), subject to the adjustments described in Section 4.7 below.
“Adjusted Net Cash Flow From Operations Growth Performance Ranking” means the ranking of the Company’s Adjusted Net Cash Flow From Operations growth for the FY16 Performance Period relative to the Adjusted Net Cash Flow From Operations growth levels for the FY16 Performance Period for the companies (including the Company) comprising the Company Peer Group.  The Adjusted Net Cash Flow From Operations Growth Performance Ranking for any particular entity within the Company Peer Group shall be determined based on the Company Peer Group member’s Adjusted Net Cash Flow From Operations for the fiscal quarters of such entity that end during the FY16 Performance Period, when compared with the Company Peer Group member’s Adjusted Net Cash Flow From Operations for the four consecutive fiscal quarters of such entity that ended immediately prior to the FY16 Performance Period, all as determined by the Committee based on information publicly available to the Committee at the time it makes such determination.
“Applicable EPS Percentage” means, as to a particular Performance Period, a percentage determined as provided in Exhibit A based on the Company’s Adjusted EPS for that Performance Period. 

    

“Applicable Cash Flow Percentage” means, as to a particular Performance Period, a percentage determined as provided in Exhibit A based on the Company’s Adjusted Net Cash Flow From Operations for that Performance Period.
“Applicable Revenue Percentage” means, as to a particular Performance Period, a percentage determined as provided in Exhibit A based on the Company’s Revenue for that Performance Period.
“Award” means an award of an opportunity to receive a Bonus under this Plan, subject to the terms and conditions of this Plan.
“Base Salary” means the annualized rate of base salary paid to a Participant by the Company and its Subsidiaries as in effect at the end of the applicable Performance Period (exclusive of any commissions or other actual or imputed income from any benefits or perquisites provided by the Company or a Subsidiary, but prior to any reductions for salary deferred pursuant to any deferred compensation plan or for contributions to a plan qualifying under Section 401(k) of the Code or contributions to a cafeteria plan under Section 125 of the Code).
“Board” means the Board of Directors of the Company.
“Bonus” means the right of a Participant to receive a payment under this Plan.  
“Change in Control Event” means a “change in the ownership” of the Company, a “change in effective control” of the Company, or a “change in the ownership of a substantial portion of the assets” of the Company, within the meaning of Section 409A of the Code. 
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Committee” means the Compensation Committee of the Board.
“Company” means Microsemi Corporation, a Delaware corporation.
“Company Peer Group” means the Company and each of the following companies:  

	
	
	Amkor Technology, Inc.

	Analog Devices, Inc.

	Avago Technologies, Ltd.

	AVX Corporation

	Cobham plc

	Cypress Semiconductor Corporation

	Diodes, Inc.

	Fairchild Semiconductor International, Inc.

	Infineon Technologies AG

	Integrated Device Technology, Inc.

	Intersil Corporation

	Linear Technology Corporation

	M/A-COM Technology Solutions Inc.

	Marvell Technology Group Ltd.

	Maxim Integrated Products, Inc.

	MaxLinear, Inc.

	Mercury Systems, Inc.

	Microchip Technology, Inc.

	MKS Instruments

	ON Semiconductor Corporation

	Power Integrations, Inc.

	QLogic Corp.

	RF Micro Devices, Inc.

	Semtech Corporation

	Silicon Laboratories, Inc.

	Skyworks Solutions, Inc.

	Vishay Intertechnology, Inc.

	Xilinx, Inc.

The Company Peer Group shall be subject to adjustment by the Committee for changes that occur prior to the end of the FY16 Performance Period as follows:  In the event of a merger or other business combination of two Company Peer Group members (including, without limitation, the acquisition of one Company Peer Group member, or all or substantially all of its assets, by another Company Peer Group member), the surviving, resulting or successor entity, as the case may be, shall continue to be treated as a member of the Company Peer Group, provided that the common stock (or similar equity security) of such entity is listed or traded on a national securities exchange as of the end of the FY16 Performance Period.  In the event that the common stock (or similar equity security) of a Company Peer Group member is otherwise not listed or traded on a national securities exchange at the end of the FY16 Performance Period, such entity shall be excluded from the Company Peer Group.
“First Half Performance Period” means the first two fiscal quarters of the Company’s 2016 fiscal year.
“First Half Target Bonus” means, as to a particular Award, fifty percent (50%) of the Target Bonus for that Award.
“FY16 Performance Period” means the Company’s 2016 fiscal year.
“Participant” means a key employee (including any officer) of the Company or one of its Subsidiaries selected to participate in this Plan by the Committee.

“Payment Date” means, as to a particular Performance Period, a date as soon as practicable following the certification of the Committee’s findings under Section 4.9 for that Performance Period (and in all events not later than two and one-half months after the end of the Company’s fiscal year in which the Performance Period ends).
“Performance Goals” means the target levels of Adjusted EPS, Adjusted Net Cash Flow From Operations and Revenue established by the Committee for each Performance Period used to determine the amount of Bonuses payable under this Plan.
“Performance Incentive Plan” means the Company’s 2008 Performance Incentive Plan, as amended from time to time.
“Performance Period” means either the First Half Performance Period or the FY16 Performance Period, as applicable.
“Plan” means this Microsemi Corporation Fiscal 2016 Executive Non-Equity Incentive Plan, as amended from time to time.  
“Revenue” means, as to the Company and any other Company Peer Group member, the reported revenue if that entity for the applicable Performance Period (using the calculation, whether in accordance with GAAP or non-GAAP, principally used by that entity to publicly report its earnings per share for that period), subject to the adjustments described in Section 4.7 below.
“Revenue Growth Performance Ranking” means the ranking of the Company’s Revenue growth for the FY16 Performance Period relative to the Revenue growth levels for the FY16 Performance Period for the companies (including the Company) 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 FY16 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 FY16 Performance Period, all as determined by the Committee based on information publicly available to the Committee at the time it makes such determination.
“Section 162(m)” means Section 162(m) of the Code, and the regulations promulgated thereunder, all as amended from time to time.
“Subsidiary” has the meaning ascribed to such term in the Performance Incentive Plan.  
“Target Bonus” with respect to an Award means the amount obtained by multiplying (i) the Participant’s Base Salary, by (ii) the Target Bonus Percentage for that Award.
“Target Bonus Percentage” means the target percentage established by the Committee for an Award, as updated from time to time.
		
	3.
	Administration of the Plan.

		
	3.1
	The Committee.  This Plan shall be administered by the Committee, which shall consist solely of two or more members of the Board who are “outside directors” within the meaning of Section 162(m).  Action of the Committee with respect to the administration of this Plan shall be taken pursuant to a majority vote or by the unanimous written consent of its members.

		
	3.2
	Powers of the Committee.  Subject to the express provisions of this Plan, the Committee shall have sole responsibility for the administration of this Plan in accordance with its terms, including 

without limitation the authority to (i) determine eligibility to participate in this Plan and, from those executives determined to be eligible, the particular executives who will receive an Award under this Plan, and (ii) establish the terms and conditions applicable to each Award.  The Committee shall have the authority to construe and interpret this Plan and any agreements or other documents relating to Awards under the Plan, may adopt rules and regulations relating to the administration of this Plan, and shall exercise all other duties and powers conferred on it by this Plan.  
		
	4.
	Bonus Provisions.  The Bonuses (if any) payable with respect to an Award granted under this Plan shall be calculated in accordance with this Section 4.

		
	4.1
	Award Terms.  The Committee shall select the Participants who will participate in this Plan and the Target Bonus Percentage for each Participant.  The Committee shall also establish the Applicable EPS Percentages, Applicable Cash Flow Percentages and the Applicable Revenue Percentages that relate to different levels of Adjusted EPS, Adjusted Net Cash Flow From Operations and Revenue for each Performance Period.  Participants will be eligible to receive a Bonus based on the Company’s Adjusted EPS, Adjusted Net Cash Flow From Operations and Revenue for the First Half Performance Period as provided in Section 4.2 below.  Participants will be eligible to receive a Bonus based on the Company’s Adjusted EPS, Adjusted Net Cash Flow From Operations and Revenue for the FY16 Performance Period as provided in Section 4.3 below.  For each Performance Period, each Participant’s Target Bonus (or First Half Target Bonus, as the case may be) for that Performance Period will be allocated one -third (1⁄3) to the Company’s Adjusted EPS for the Performance Period, one-third (1⁄3) to the Company’s Adjusted Net Cash Flow From Operations for the Performance Period, and one-third (1⁄3) to the Company’s Revenue for the Performance Period.  

		
	4.2
	Determination of Bonus Amounts for First Half Performance Period.  Each Participant will be eligible to receive a Bonus based on the Company’s Adjusted EPS, Adjusted Net Cash Flow From Operations and Revenue for the First Half Performance Period.  At the end of the First Half Performance Period, a Bonus will be calculated for each Participant equal to the sum of (a) the portion of the Participant’s First Half Target Bonus allocated to the Adjusted EPS Performance Goal multiplied by the Applicable EPS Percentage for the First Half Performance Period, (b) the portion of the Participant’s First Half Target Bonus allocated to the Adjusted Net Cash Flow From Operations Performance Goal multiplied by the Applicable Cash Flow Percentage for the First Half Performance Period, and (c) the portion of the Participant’s First Half Target Bonus allocated to the Revenue Performance Goal multiplied by the Applicable Revenue Percentage for the First Half Performance Period.

		
	4.3
	Determination of Bonus Amounts for FY16 Performance Period.  Each Participant will be eligible to receive a Bonus based on the Company’s Adjusted EPS, Adjusted Net Cash Flow From Operations and Revenue for the FY16 Performance Period.  At the end of the FY16 Performance Period, a Bonus will be calculated for each Participant in an amount (not less than zero) equal to (a) the sum of (i) the portion of the Participant’s Target Bonus allocated to the Adjusted EPS Performance Goal multiplied by the Applicable EPS Percentage for the FY16 Performance Period, (ii) the portion of the Participant’s Target Bonus allocated to the Adjusted Net Cash Flow From Operations Performance Goal multiplied by the Applicable Cash Flow Percentage for the FY16 Performance Period, and (iii) the portion of the Participant’s Target Bonus allocated to the Revenue Performance Goal multiplied by the Applicable Revenue Percentage for the FY16 Performance Period, less (b) the amount of any Bonus paid or payable to the Participant based on the Company’s performance for the First Half Performance Period pursuant to Section 4.2.  In each case, the Applicable Percentage for each performance metric is subject to adjustment based on the Company’s Performance Ranking for that metric as provided in Exhibit A. 

		
	4.4
	Committee Discretion to Reduce Bonuses.  Notwithstanding the foregoing provisions, the Committee shall retain discretion to reduce (but not increase) the amount of any Bonus otherwise payable pursuant to Section 4.2 or Section 4.3 above. 

		
	4.5
	Maximum Bonus.  Notwithstanding any other provision of this Plan, the maximum aggregate amount that may be paid pursuant to an Award granted under this Plan to a Participant for the Performance Periods shall be the lesser of (a) two hundred percent (200%) of the Participant’s Target Bonus and (b) as provided in Section 5.2.3 of the Performance Incentive Plan, five million dollars ($5,000,000).

		
	4.6
	Termination of Employment.  In the event that a Participant’s employment with the Company and its Subsidiaries terminates (regardless of the reason for such termination of employment, whether voluntarily or involuntarily, with or without cause, or due to the Participant’s death or disability) at any time prior to the Payment Date for a particular Performance Period, the Participant’s Award shall immediately terminate upon such termination of employment as to that Performance Period, and the Participant shall not be entitled to any Bonus payment in respect of such Award, unless otherwise expressly provided under a written employment, severance or similar contract between the Participant and the Company.  

		
	4.7
	Adjustments; Early Termination.  

		
	(a)
	Adjustments.  The Committee shall adjust the Adjusted EPS, Adjusted Net Cash Flow From Operations, and Revenue (in each case, of the Company 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 Company, (2) any change in accounting policies or practices, or (3) the effects of any special charges to the Company’s earnings.  In addition, the Committee shall make adjustments to the Adjusted EPS (of the Company 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 Committee’s determination of the Adjusted EPS, Adjusted Net Cash Flow From Operations, Revenue, Adjusted EPS Growth Performance Ranking, Adjusted Net Cash Flow From Operations Growth Performance Ranking, and Revenue Growth Performance Ranking for each Performance Period and whether, and the extent to which, any such adjustment is necessary shall be final and binding.  

		
	(b)
	Change in Control Events.  Notwithstanding any other provision herein, if, at any time during the FY16 Performance Period, a Change in Control Event occurs, this Plan shall terminate upon such event subject to the next sentence.  In such circumstances, each Participant who, immediately prior to the Change in Control Event, is employed by the Company or one of its Subsidiaries shall be entitled to a Bonus for the FY16 Performance Period, with such Bonus to equal the greater of the following:

		
	•
	the Participant’s Target Bonus (less the amount, if any, of any Bonus paid or payable to the Participant based on the Company’s performance for the First Half Performance Period pursuant to Section 4.2); or

		
	•
	the Bonus the Participant would receive for the FY16 Performance Period, as determined pursuant to Section 4.3 (including the offset for any Bonus paid or payable to the Participant based on the Company’s performance for the First Half Performance Period), but assuming that the FY16 Performance Period 

ended as of the last day of the fiscal quarter of the Company coinciding with or last preceding the date on which such Change in Control Event occurs, pro-rating each of the Adjusted EPS Performance Goal, Adjusted Net Cash Flow From Operations Performance Goal, and Revenue Performance Goal for the portion of the FY16 Performance Period actually completed during such shortened period of time and using the performance goals for that period of time as considered by the Committee in approving this Plan and on which the goals set forth in Exhibit A were derived, and comparing actual Company performance for such shortened period of time against such adjusted goals.
As to any Participant entitled to such Bonus, Section 4.6 shall no longer apply upon and following the Change in Control Event and the Bonus shall be paid on or promptly after (and in no event more than one month after) the date of the Change in Control Event.
		
	4.8
	Committee Determination of Bonuses.  The Committee has the sole discretion to determine the Performance Goals for each Award (in accordance with this Section 4), the extent to which such Performance Goals have been achieved and whether all or any portion of an Award will be paid, subject in all cases to the terms, conditions and limits of this Plan and of any other written commitment authorized by the Committee. 

		
	4.9
	Committee Certification; Payment.  No Participant shall receive any payment under this Plan unless and until the Committee has certified, by resolution or other appropriate action in writing, that the amount thereof has been accurately determined in accordance with the terms, conditions and limits of this Plan and that the applicable Performance Goals applicable to the Award were in fact satisfied.  Bonus payments shall be made in cash; provided, however, that the Committee may provide (at the time of grant of an Award or at any time on or before the Payment Date for that Award) that all or a specified portion of a Bonus payment for that Award will be made in shares of Company common stock of equivalent fair market value as of the applicable Payment Date.  Any shares of Company common stock issued or delivered in payment of an Award shall be charged against the applicable share limits of the Performance Incentive Plan.  Any fractional share shall be settled in cash.  Any Bonus payment for a Performance Period shall be made on the Payment Date for that Performance Period.

		
	5.
	General Provisions.

		
	5.1
	Rights of Participants.

		
	(a)
	No Right to Awards or Continued Employment.  Neither the establishment of this Plan nor the provision for or payment of any amounts hereunder nor any action of the Company, the Board or the Committee in respect of this Plan shall be held or construed to confer upon any person any legal right to receive, an Award or any other benefit under the Plan.  Nothing contained in this Plan (or in any other documents evidencing any Award under this Plan) shall confer upon any Participant any right to continue in the employ of the Company or any Subsidiary, constitute any contract or agreement of employment, nor shall interfere in any way with the right of the Company or any Subsidiary to change any person’s compensation or other benefits, or to terminate his or her employment, with or without cause.  Nothing in this Section 5.1(a), however, is intended to adversely affect any express independent right of such person under a separate employment contract.

		
	(b)
	Plan Not Funded.  Awards payable under this Plan shall be payable from the general assets of the Company, and no special or separate reserve, fund or deposit shall be made to assure payment of such Awards.  No Participant or other person shall have 

any right, title or interest in any fund or in any specific asset of the Company by reason of any Award hereunder.  Neither the provisions of this Plan (nor of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any Participant or other person.  To the extent that a Participant or other person acquires a right to receive payment pursuant to any Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.
		
	5.2
	Non-Transferability of Benefits and Interests.  Except as expressly provided by the Committee in accordance with the provisions of Section 162(m), all Awards are non-transferable, and no benefit payable under this Plan shall be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge.  This Section 5.2 shall not apply to an assignment of a contingency or payment due (a) after the death of a Participant to the deceased Participant’s legal representative or beneficiary or (b) after the disability of a Participant to the disabled Participant’s personal representative.  

		
	5.3
	Discretion of Company, Board and Committee.   Any decision made or action taken by, or inaction of, the Company, the Board or the Committee arising out of or in connection with the creation, amendment, construction, administration, interpretation and effect of the Plan that is within its authority hereunder or applicable law shall be within the absolute discretion of such entity and shall be conclusive and binding upon all persons.  Neither the Board nor the Committee, nor any person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan (or any Award made under this Plan).

		
	5.4
	Governing Law.  All questions pertaining to the construction, regulation, validity and effect of the provisions of this Plan shall be determined in accordance with the laws of the State of Delaware.

		
	5.5
	Construction.  It is the intent of the Company that, to the maximum extent possible and other than for any Bonus paid pursuant to Section 4.7(b), this Plan, Awards, and Bonuses paid hereunder will qualify as performance-based compensation or will otherwise be exempt from deductibility limitations under Section 162(m).  This Plan shall be construed and interpreted consistent with such intent.  This Plan shall also be construed and interpreted to satisfy, and avoid any tax, penalty or interest under, Section 409A of the Code.

		
	5.6
	Tax Withholding.  Upon the payment of any Bonus, the Company shall have the right to deduct the amount of any federal, state or local taxes that the Company or any Subsidiary may be required to withhold with respect to such payment. In the case of a payment in shares of Company common stock, the Company will reduce the number of shares to be delivered with respect to the Award by the appropriate number of shares, valued at their fair market value on the applicable Payment Date, to satisfy any such withholding requirements with respect to the portion of the Award payable in shares.  Any remaining fractional share shall be settled in cash.

		
	5.7
	Amendments, Suspension or Termination of Plan.  The Board or the Committee may at any time terminate, amend, modify or suspend this Plan, in whole or in part.  Notwithstanding the foregoing, no amendment may be effective without Board and/or stockholder approval if such approval is necessary to comply with the applicable rules of Section 162(m).

		
	5.8
	Captions.  Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.

		
	5.9
	Non-Exclusivity of Plan.  Subject to compliance with Section 162(m), nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Committee to grant awards or authorize any other compensation under any other plan or authority.

		
	5.10
	Clawback Policy.  Bonuses paid or payable under this Plan are subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of any payments received with respect to Awards granted under this Plan. 

* * * * *

EXHIBIT A
Following are the Participants, Target Bonus Percentages and Performance Goals established by the Committee for purposes of the Fiscal 2016 Executive Non-Equity Incentive Plan.
		
	1.
	List of Participants and Target Bonus Percentages.

The following table sets forth the list of Participants selected by the Committee to participate in this Plan and the Target Bonus Percentages for each such Participant.
	
		
	Participant
	Target Bonus Percentage

	James Peterson
	110%

	Paul Pickle
	75%

	John Hohener
	70%

	Steven Litchfield
	65%

	David Goren
	60%

		
	2.
	Performance Goals for First Half Performance Period.

The following tables set forth the Performance Goals to be used to calculate the Applicable EPS Percentage, the Applicable Cash Flow Percentage, and the Applicable Revenue Percentage in order to determine Bonuses for the First Half Performance Period in accordance with Section 4.2 of this Plan.
	
		
	Adjusted EPS
	Applicable EPS Percentage

	Less than $1.32
	0%

	$1.32
	50%

	$1.36
	100%

	$1.40
	125%

	$1.43
	175%

	$1.49 or more
	200%

	
		
	Adjusted Net Cash Flow 
From Operations
	Applicable Cash Flow Percentage

	Less than $143,003,000
	0%

	$143,003,000
	50%

	$145,322,000
	100%

	$147,692,000
	125%

	$149,428,000
	175%

	$150,987,000 or more
	200%

	
		
	Revenue
	Applicable Revenue Percentage

	Less than $631,526,000
	0%

	$631,526,000
	50%

	$640,382,000
	100%

	$649,000,000
	125%

	$654,875,000
	175%

	$664,580,000 or more
	200%

		
	3.
	Performance Goals for FY16 Performance Period.

The following tables set forth the Performance Goals to be used to calculate the Applicable EPS Percentage, the Applicable Cash Flow Percentage, and the Applicable Revenue Percentage in order to determine Bonuses for the FY16 Performance Period in accordance with Section 4.3 of this Plan.
	
		
	Adjusted EPS
	Applicable EPS Percentage

	Less than $2.77
	0%

	$2.77
	50%

	$2.84
	100%

	$3.13
	125%

	$3.22
	175%

	$3.33 or more
	200%

Notwithstanding the above chart: (1) if the Company’s Adjusted EPS Growth Performance Ranking for the FY16 Performance Period is at the 70th percentile or higher, and the Applicable EPS Percentage otherwise determined pursuant to the chart above is less than 100%, the Applicable EPS Percentage shall be 100%; and (2) if the Company’s Adjusted EPS Growth Performance Ranking for the FY16 Performance Period is at the 20thpercentile or lower, the Applicable EPS Percentage otherwise determined pursuant to the chart above shall be multiplied by a factor of 0.8 (for example, if the Applicable EPS Percentage otherwise determined pursuant to the chart above is 120%, the Applicable EPS Percentage shall be shall be 96% (0.8 multiplied by 120%).

	
		
	Adjusted Net Cash Flow 
From Operations
	Applicable Cash Flow Percentage

	Less than $288,855,000
	0%

	$288,855,000
	50%

	$298,947,000
	100%

	$305,757,000
	125%

	$309,708,000
	175%

	$312,624,000 or more
	200%

Notwithstanding the above chart: (1) if the Company’s Adjusted Net Cash Flow From Operations Growth Performance Ranking for the FY16 Performance Period is at the 70th percentile or higher, and the Applicable Cash Flow Percentage otherwise determined pursuant to the chart above is less than 100%, the Applicable Cash Flow Percentage shall be 100%; and (2) if the Company’s Adjusted EPS Growth Performance Ranking for the FY16 Performance Period is at the 20th percentile or lower, the Applicable Cash Flow Percentage otherwise determined pursuant to the chart above shall be multiplied by a factor of 0.8 (for example, 

if the Applicable Cash Flow Percentage otherwise determined pursuant to the chart above is 120%, the Applicable Cash Flow Percentage shall be shall be 96% (0.8 multiplied by 120%).

	
		
	Revenue
	Applicable Revenue Percentage

	Less than $1,269,912,000
	0%

	$1,269,912,000
	50%

	$1,295,149,000
	100%

	$1,350,000,000
	125%

	$1,366,658,000
	175%

	$1,383,090,000 or more
	200%

Notwithstanding the above chart: (1) if the Company’s Revenue Growth Performance Ranking for the FY16 Performance Period is at the 70th percentile or higher, and the Applicable Revenue Percentage otherwise determined pursuant to the chart above is less than 100%, the Applicable Revenue Percentage shall be 100%; and (2) if the Company’s Revenue Growth Performance Ranking for the FY16 Performance Period is at the 20th percentile or lower, the Applicable Revenue Percentage otherwise determined pursuant to the chart above shall be multiplied by a factor of 0.8 (for example, if the Applicable Revenue Percentage otherwise determined pursuant to the chart above is 120%, the Applicable Revenue Percentage shall be shall be 96% (0.8 multiplied by 120%).

		
	4.
	Linear Interpolation Between Performance Levels.

For each of the tables under paragraphs 2 and 3 above, the Applicable EPS Percentage, Applicable Cash Flow Percentage or the Applicable Revenue Percentage, as the case may be and as determined pursuant to such table, will be interpolated on a linear basis between the levels stated in the applicable table.
* * * * *Exhibit

MICROSEMI CORPORATION
DIRECTORS’ COMPENSATION POLICY
As Amended Effective November 7, 2016
Directors of Microsemi Corporation, a Delaware corporation (the “Company”), who are not employed by the Company or one of its subsidiaries (“non-employee directors”) are entitled to the compensation set forth below for their service as a member of the Board of Directors (the “Board”) of the Company.  This policy is effective as of November 7, 2016 and supersedes all prior policies concerning compensation of the Company’s non-employee directors as to their service (and, as to non-employee director equity awards, equity awards granted) on or after that date.  The Board has the right to amend this policy from time to time.
	
				
	Cash Compensation
	 

	Annual Retainer
	

	$60,000
	

	Additional Independent Chair/Lead Independent Director Retainer
	

	$60,000
	

	Additional Committee Member Retainers
	 

	Audit Committee
	

	$12,000
	

	Compensation Committee
	

	$10,000
	

	Governance and Nominating Committee
	

	$7,500
	

	Additional Committee Chair Retainers
	 

	Audit Committee Chair
	

	$15,000
	

	Compensation Committee Chair
	

	$10,000
	

	Governance and Nominating Committee Chair
	

	$7,500
	

	Meeting Fee (per meeting)
	1,500
	

	 
	 

	Equity Compensation
	 

	Annual Equity Award
	

	$195,000
	

	New Director Award
	

	$145,000
	

Cash Compensation
Each non-employee director will be entitled to a cash retainer while serving on the Board in the amount set forth above (the “Annual Retainer”).  A non-employee director who serves as the Chair of the Board (or Lead Independent Director, if applicable) will be entitled to an additional cash retainer while serving in that position in the amount set forth above (the “Additional Independent Chair/Lead Independent Director Retainer”).  A non-employee director who serves as a member of the Audit Committee, the Compensation Committee or the Governance and Nominating Committee of the Board (including, for purposes of clarity, the Chair of each such Committee) will be entitled to an additional cash retainer while serving in that position in the applicable amount set forth above (an “Additional Committee Member Retainer”).  A non-employee director who serves as the Chair of the Audit Committee, the Compensation Committee or the Governance and Nominating Committee of the Board will be entitled to an additional cash retainer while serving in that position in the applicable amount set forth above (an “Additional Committee Chair Retainer”).  To the extent a non-employee director attends more than eight (8) meetings of the Board, or of the Audit Committee, the Compensation Committee or the Governance and Nominating Committee of the Board, during a particular fiscal year of the Company, and regardless of whether such attendance is in person or telephonic and regardless of length (in the case of committee meetings, only if the non-employee director is a member of such committee), the non-employee director will be entitled to a fee for attendance at each meeting of the Board or particular committee, as the case may be, by the non-employee director in excess of eight (8) during that fiscal year in the applicable amount set forth above (a “Meeting Fee”).
The amounts of the Annual Retainer, Additional Independent Chair/Lead Independent Director Retainer, Additional Committee Member Retainer and Additional Committee Chair Retainers reflected above are expressed as annualized amounts.  These retainers will be paid on a quarterly basis, at the end of each quarter in arrears, and will be pro-rated if a non-employee director serves (or serves in the corresponding position, as the case may be) for only a portion of the quarter (with the proration based on the number of calendar days in the quarter that the director served as a non-employee director or held the particular position, as the case may be).  Meeting fees for attendance at one or more meetings that occur in a particular quarter will be paid at the end of that quarter.
Equity Awards
Annual Equity Awards for Continuing Board Members 
On each date set forth below, each non-employee director continuing in office after that date will automatically be granted an award of Company common stock determined by dividing the Annual Equity Award grant value set forth above by the Average Closing Price as of that date (rounded down to the nearest whole share).  For purposes of this policy, “Average Closing Price” as of a particular date means the average of the last/closing market prices (in regular trading on the principal exchange or market on which the Company’s common stock is then listed or admitted to trade) for a share of the Company’s common stock over the period of twenty consecutive trading days ending with the date in question (or on the immediately preceding trading day if that day is not a trading day).  In determining the Average Closing Price, the last/closing prices of a share of Company common stock taken into account will be equitably adjusted to account for (and mitigate the effect of) any split or reverse split of the Company’s common stock, or any dividend of Company common stock, that occur during the relevant twenty trading day period, and may (if and to the extent provided by the Board before the date of grant of the particular award) be adjusted to account for any other recapitalization, reorganization or other material transaction of or with the Company.
Such annual equity award grants will be made on the date of each annual meeting of the Company’s stockholders; provided that if more than one such meeting occurs during a particular calendar year, the grants will be made only in connection with the first such meeting to occur in that year.
Initial Equity Awards
For each new non-employee director appointed or elected to the Board, on the date that the new non-employee director first becomes a member of the Board, the new non-employee director will automatically be granted an award of Company common stock determined by dividing (1) the sum of the New Director Award grant value set forth above plus a pro-rata portion of the Annual Equity Award value by (2) the Average Closing Price as of that date (rounded down to the nearest whole share).  The pro-rata portion of the Annual Equity Award value for purposes of the applicable initial equity award will equal the Annual Equity Award value multiplied by a fraction (not greater than one), the numerator of which is 365 minus the number of calendar days that as of the particular grant date had elapsed since the date of the Company’s last annual meeting at which annual equity awards were granted to non-employee directors and the denominator of which is 365.  For purposes of clarity, if a non-employee director is first elected to the Board at an annual meeting of the Company’s stockholders, the non-employee director will be eligible for an Annual Equity Award and an initial equity award pursuant to this Policy, but in calculating the non-employee director’s initial equity award only the new director award value set forth above will be taken into account.
An employee or former employee of the Company or one of its subsidiaries who ceases or has ceased to be so employed and becomes a non-employee director will not be eligible for an initial equity award grant, but will be eligible for cash compensation and annual equity awards on the same basis as other non-employee directors.
Provisions Applicable to All Non-Employee Director Equity Awards
Each award will be made under and subject to the terms and conditions of the Company’s 2008 Performance Incentive Plan or any successor equity compensation plan approved by the Company’s stockholders and in effect at the time of grant.  Each award will be fully vested at grant.
Expense Reimbursement
All non-employee directors will be entitled to reimbursement from the Company for their reasonable travel (including airfare and ground transportation), lodging and meal expenses incident to meetings of the Board or committees thereof or in connection with other Board related business.  The Company will make reimbursement to a non-employee director within a reasonable amount of time following submission by the non-employee director of reasonable written substantiation for the expenses, and in all cases not later than the end of the calendar year following the calendar year in which the related expense was incurred.

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