Document:

FULL AND COMPLETE RELEASE

EXHIBIT 10.12

EMPLOYMENT AND SUCCESSION AGREEMENT

AND

FULL AND COMPLETE RELEASE

This Employment and Succession Agreement and Full and Complete Release ("Agreement") is entered into between Maureen D. Richards ("Executive") and Internet Security Systems, Inc., a Delaware corporation (together with its subsidiary companies, the "Company").

Whereas, the Company and Executive desire to agree upon a fixed term of employment of Executive by the Company and provide for the successful transition of duties and separation of Executive from the Company effective April 15, 2006; and 

Whereas, the Company and Executive have previously entered into an Indemnity Agreement dated 19 March 2001, and a Confidentiality, Ownership and Non-Competition Agreement dated 23 December 1997 (the "Preexisting Agreements"). 

Whereas, the Executive has been advised to consult with an attorney and has relied upon the advice of her attorney in signing this Agreement. 

Now, therefore, in consideration for payments and benefits provided by the Company as set forth in this Agreement, the sufficiency of which is hereby acknowledged, Executive and the Company agree as follows: 

	Fixed Term Employment. 

	In order to assure retention of Executive through February 28, 2006, the Company will continue Executive's full-time employment through February 28, 2006. When a new Controller begins employment with the Company, the title and responsibilities of Controller and principal accounting officer will transition from Executive to the new Controller in a manner that allows the transition to coincide in a reasonable manner with a reporting period. Part-time employment of Executive will begin on March 1, 2006 and continue through April 15, 2006. Executive and the Company will execute releases in substantially the same form as contained in this Agreement upon conclusion of full-time status, and again upon conclusion of part-time employment (excluding the Indemnity Agreement and the Confidentiality, Ownership and Non-Competition Agreement).
	During full-time employment, Executive's compensation will continue on current compensation terms, including salary and incentive compensation, benefits and expense reimbursement according to policy. For the avoidance of doubt, Executive will be eligible for her Q1 2006 quarterly bonus at the rate in her current compensation plan for 2005, subject to attainment of applicable performance targets.
	Executive will devote full-time and best efforts to the business of the Company during the period of full-time employment, including continuing current responsibilities. Executive will assist with preparation of and will sign quarterly and annual reports and certifications that are required during the period of employment.
	During part-time employment, Executive's compensation will continue at the rate of $4,000 per month. Medical benefits will also continue during this period.  Other employee benefits will apply only as provided in the Company's benefits plans for part-time employees. The Company will reimburse reasonable out-of-pocket expenses incurred according to the Company's policy during part-time employment. After April 15, 2006, Executive will not be entitled to any further compensation or benefits or severance payments.
	During part-time employment until April 15, 2006, Executive will be available for an aggregate of 48 hours, as needed, using best efforts to fulfill reasonably requested tasks. 
	Equity incentives, such as stock options and restricted stock, will continue to vest according to the Company's incentive stock plan during full-time and part-time employment, except as provided in Section 1(i). 
	During full-time and part-time employment, Executive may be terminated by the Company only for cause. "Cause" means the commission of any act of fraud, embezzlement or dishonesty, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Company or any affiliated company, or any other intentional violation of the Company's Code of Conduct by Executive adversely affecting the business or affairs of the Company or any parent or subsidiary corporation in a material manner.
	Executive will report to the Chief Financial Officer during full-time and part-time employment. Executive will perform such responsibilities and duties as may be assigned consistent with her current areas of responsibility, in the Chief Financial Officer's judgment, so that the succession of the new Controller is efficient, effective and successful. Employment with others will not be entered into during full-time or part-time employment. If Executive elects to leave the Company voluntarily before conclusion of employment, then employment will terminate, compensation and benefits will cease, and equity incentives such as stock options and restricted stock will cease vesting. This Agreement is for the personal services of Executive. Executive shall receive all payments and other benefits to which Executive is entitled under this Agreement through April 15, 2006, unless Executive's employment terminates prior to such date for Cause, due to death or disability, or as otherwise provided in this Agreement, in which event compensation and benefits will cease upon employment termination.
	Provided Executive's part-time employment status continues to April 15, 2006 and for Executive's covenant not to compete with the Company, as provided in this paragraph, the Company agrees to pay Executive $60,000, subject to withholding, according to standard payroll practices. Executive covenants and agrees that from the date of this Agreement until April 15, 2007, Executive will not (whether on her own behalf or on behalf of any person or entity other than the Company) engage in or become involved in a business that directly competes with the Company in any line of business in which it is engaged as of the date of this Agreement. A list of currently competing entities has been furnished by the Company to Executive contemporaneously with the execution and delivery of this Agreement. The parties acknowledge that other businesses may have incidental activities that may compete with a business line of the Company and this covenant is not intended to prohibit employment with a business (not identified on the list) who's primary business is not competitive with the business of the Company, provided that Executive is not actively involved or directly responsible for the incidental activity that competes. This covenant does not prohibit investment (whether directly or through public or private investment funds) in securities of any entity that may compete with the Company, provided such investment does not exceed 5% of the equity securities of such entity and provided Executive is not involved in the management or operations of such competing entity. Executive acknowledges that the Company's business is global and that she has been involved with its business globally, so this restriction will apply throughout the world. Executive acknowledges that these restrictions are reasonably necessary to protect the Company's legitimate business interests, are not overbroad, overlong, or unfair (including in duration and scope), and are not the result of overreaching, duress, or coercion of any kind.  Executive confirms that her observance of the covenants will not cause her any undue financial hardship, and that the enforcement of the covenants will not impair her ability to gain employment commensurate with her abilities and on terms fully acceptable to her or otherwise to receive sufficient income to support her and her family and to satisfy her debt obligations.  Executive acknowledges that any violation of these covenants would cause the Company irreparable injury or loss.  Executive agrees that, for any breach or threatened breach of the covenants of this provision, the Company will be entitled to immediate injunctive relief and that a restraining order and/or an injunction may issue against Executive to prevent or restrain any such breach or threatened breach, in addition to any other rights or remedies at law that the Company may have.

	Full and Complete Release. 

Executive, for herself and her heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release and forever discharge the Company and its affiliates, joint ventures, joint venture partners, and benefit plans, and their respective current and former directors, officers, administrators, trustees, employees, agents, and other representatives, from all debts, claims, actions, causes of action (including without limitation those arising under the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Sec. 201 et seq.; the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq.; the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C. Sec. 2101 et seq.; and those federal, state, local, and foreign laws prohibiting employment discrimination based on age, sex, race, color, national origin, religion, disability, veteran or marital status, sexual orientation, or any other protected trait or characteristic, or retaliation for engaging in any protected activity, including without limitation the Age Discrimination in Employment Act of 1967, 29 U.S.C. Sec. 621 et seq., as amended by the Older Workers Benefit Protection Act, P.L. 101-433; the Equal Pay Act of 1963, 9 U.S.C. Sec. 206, et seq.; Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. Sec. 2000e et seq.; the Civil Rights Act of 1866, 42 U.S.C. Sec. 1981; the Civil Rights Act of 1991, 42 U.S.C. Sec. 1981a; the Americans with Disabilities Act, 42 U.S.C. Sec. 12101 et seq.; the Rehabilitation Act of 1973, 29 U.S.C. Sec. 791 et seq.; the Family and Medical Leave Act of 1993, 28 U.S.C. Secs. 2601 and 2611 et seq.; and comparable state, local, and foreign causes of action, whether statutory or common law), suits, dues, sums of money, accounts, reckonings, covenants, contracts, claims for costs or attorneys' fees, controversies, agreements, promises, and all liabilities of any kind or nature whatsoever, at law, in equity, or otherwise, KNOWN OR UNKNOWN, fixed or contingent, which she ever had, now has, or may have, or which she, her heirs, executors, administrators or assigns hereafter can, shall, or may have, from the beginning of time through the date on which she signs this Agreement, including without limitation those arising out of or related to her employment or separation from employment with the Company (collectively the "Released Claims"), provided nothing herein releases the Company from its obligations under this Agreement or the Preexisting Agreements, or releases any vested and accrued benefits to which Executive is entitled, or any rights which by law cannot be released. 

Executive fully understands and agrees that: 

	no rights or claims are released or waived that may arise after the date Executive signs this Agreement; 
	Executive is advised to consult with an attorney before signing this Agreement; 
	Executive has 21 days from receipt of this Agreement within which to consider whether to sign it; 
	Executive has seven days following her execution of this Agreement to revoke the Agreement; and 
	this Agreement shall be effective on the date executed by Executive, but Executive shall not have the right to enforce this Agreement until the revocation period of seven days has expired without any such revocation. 

Executive acknowledges that some of the payments and benefits given to Executive under this Agreement are in addition to those to which she is otherwise entitled to as a matter of Company policy. 

	Release of Claims Against Executive. 

The Company, for itself and its successors and assigns, does hereby knowingly and voluntarily release and forever discharge the Executive and her personal and legal representatives, executors, administrators, heirs, distributees, devisees, legatees and successors from all debts, claims, actions, causes of action, suits, dues, sums of money, accounts, reckonings, covenants, contracts, claims for costs or attorneys' fees, controversies, agreements, promises, and all liabilities of any kind or nature whatsoever, at law, in equity, or otherwise, KNOWN OR UNKNOWN, fixed or contingent, which it ever had, now has, or may have, or which it, its successors or assigns hereafter can, shall, or may have, from the beginning of time through the date on which it signs this Agreement, including without limitation those arising out of or related to Executive's employment or separation from employment with the Company, provided nothing herein precludes the Company from enforcing its rights under this Agreement or the Preexisting Agreements, or its rights related to taxes, advances or reimbursement of expenses arising in the course of Executive's employment relationship with the Company. 

	Future Cooperation. 

Executive covenants and agrees that she shall reasonably cooperate with the Company, so long as such cooperation does not unreasonably interfere with Executive's then current employment or business activities, in any pending or future matters, including without limitation any litigation, investigation, or other dispute, in which he, by virtue of her employment with the Company, has relevant knowledge or information, including, but not limited to (i) meeting with representatives of the Company to provide truthful information regarding her knowledge, (ii) acting as the Company's representative, and (iii) providing, in any jurisdiction in which the Company requests, truthful testimony relevant to said matter. The Company shall reimburse Executive for all of Executive's reasonable out-of-pocket expenses associated with such assistance, including travel expenses and attorneys' fees. If such cooperation occurs after April 15, 2006 and results in devotion of Executive's time exceeding three business days, the Company will compensate Executive for her time at an hourly rate based upon her current base salary.

	Indemnification. 

Nothing in this Agreement shall affect any rights Executive may have to indemnification or advancement of expenses under Article XI of the Company's by-laws in effect as of the date of this Agreement, any written agreement between the Company and Executive, including the Indemnity Agreement, or under applicable law. 

	Nondisparagement. 

Executive will not disparage the Company, its customers or suppliers or the Company's directors, officers, or employees ("Representatives"). The Company and its Representatives will not disparage Executive. "Disparagement" means a negative oral or written statement that can be accurately demonstrated in fact to be attributable to (i) Executive or (ii) the Company or its Representatives (as applicable). Notwithstanding the foregoing, (i) no statement made by either party in the context of any legal or regulatory proceeding shall be deemed to violate the foregoing provisions, and (ii) subject to (i), all communication relating to the termination of Executive's employment with the Company shall be consistent with the Company's Current Report on Form 8-K filed with respect to this matter. 

	Complete Agreement. 

This Agreement is the complete understanding between Executive and the Company in respect of the subject matter of this Agreement and, with the exception of the Preexisting Agreements, supersedes all prior agreements relating to the same subject matter. In signing this Agreement, Executive has not relied upon any representations, promises or agreements of any kind except those set forth herein. 

	Severability. 

In the event that any provision of this Agreement should be held to be invalid or unenforceable, each and all of the other provisions of this Agreement shall remain in full force and effect. If any provision of this Agreement is found to be invalid or unenforceable, such provision shall be modified as necessary to permit this Agreement to be upheld and enforced to the maximum extent permitted by law. 

	Governing Law. 

This Agreement is to be governed and enforced under the laws of the State of Georgia (without regard to Georgia's conflicts of law rules that might call for the application of the law of another jurisdiction). 

	Successors and Assigns. 

This Agreement is binding upon and inures to the benefit of the Company and its successors and assigns. 

	Amendment/Waiver. 

No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by each of the parties hereto. 

	Acknowledgment. 

Executive has carefully read this Agreement, fully understands each of its terms and conditions, and intends to abide by this Agreement in every respect. As such, Executive knowingly and voluntarily signs this Agreement. 

	

 
	

 
	

 
	

 
	

Executive

	

 
	

 
	

 
	

 
	

 

/s/ Maureen D. Richards

Maureen D. Richards

	

Date:
	

 
	

	

 
	

 November 1, 2005

	

 
	

 
	

 
	

 
	

Internet Security Systems, Inc.

	

 
	

 
	

 
	

 
	

 

/s/ Sean Bowen

Sean Bowen

Vice President and General Counsel

	

Date:
	

 
	

	

 
	

 November 1, 2005SIRENZA MICRODEVICES, INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

As amended on October 27, 2005

The following constitute the provisions of the 2000 Employee Stock Purchase Plan of Sirenza Microdevices, Inc.

	Purpose.  The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions.  It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended.  The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code.

	Definitions.

	"Board" shall mean the Board of Directors of the Company or any committee thereof designated by the Board of Directors of the Company in accordance with Section 14 of the Plan.
	"Code" shall mean the Internal Revenue Code of 1986, as amended.
	"Common Stock" shall mean the common stock of the Company.
	"Company" shall mean Sirenza Microdevices, Inc. and any Designated Subsidiary of the Company.
	"Compensation" shall mean all base straight time gross earnings and overtime, but exclusive of payments for shift premium, incentive compensation, incentive payments, bonuses, commissions and other compensation.
	"Designated Subsidiary" shall mean any Subsidiary that has been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.
	"Employee" shall mean any individual who is an Employee of the Company for tax purposes whose customary employment with the Company is at least twenty (20) hours per week and more than five (5) months in any calendar year.  For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company.  Where the period of leave exceeds 90 days and the individual's right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave. 
	"Enrollment Date" shall mean the first Trading Day of each Offering Period.
	"Exercise Date" shall mean the first Trading Day on or after May 15 and November 15 of each year.
	"Fair Market Value" shall mean, as of any date, the value of Common Stock determined as follows:

	If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable;
	If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the Common Stock for the last market trading day prior to the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable;
	In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board; or
	For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value shall be the initial price to the public as set forth in the final prospectus included within the registration statement in Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company's Common Stock (the "Registration Statement").

	"Offering Periods" shall mean (i) for all periods commencing prior to November 15, 2004, the periods of approximately twenty-four (24) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 15 and November 15 of each year and terminating on the first Trading Day on or after the May 15 or November 15 Offering Period commencement date approximately twenty-four months later; provided, however, that the first Offering Period under the Plan shall commence on May 24, 2000 and end on the first Trading Day on or after May 15, 2002 and the second Offering Period under the Plan shall commence on the first Trading Day on or after November 15, 2000; (ii) for all periods commencing on or after November 15, 2004 and prior to November 15, 2005, the periods of approximately twelve (12) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 15 and November 15 of each year and terminating on the first Trading Day on or after the May 15 or November 15 Offering Period commencement date approximately twelve months later, or (iii) for all periods commencing on the first Trading Day on or after November 15, 2005, the periods of approximately six (6) months during which an option granted pursuant to the Plan may be exercised, (A) commencing on the first Trading Day on or after May 15 of each year and terminating on the first Trading Day on or following November 15 of the same year, and (B) commencing on the first Trading Day on or after November 15 of each year and terminating on the first Trading Day on or following May 15 of the immediately following year.  The duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan.
	"Plan" shall mean this 2000 Employee Stock Purchase Plan.
	"Purchase Period" shall mean the approximately six month period commencing on one Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of any Offering Period shall commence on the Enrollment Date and end with the next Exercise Date.
	"Purchase Price" shall mean, (A) for Offering Periods commencing before November 15, 2005, 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower, and (B) for Offering Periods commencing on or after November 15, 2005, 95% of the Fair Market Value of a share of Common Stock on the Exercise Date; provided however, that in any case the Purchase Price may be adjusted by the Board pursuant to Section 20.
	"Reserves" shall mean the number of shares of Common Stock covered by each option under the Plan which have not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option.
	"Subsidiary" shall mean a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary.
	"Trading Day" shall mean a day on which national stock exchanges and the Nasdaq System are open for trading.

	Eligibility.

	Any Employee who shall be employed by the Company on a given Enrollment Date shall be eligible to participate in the Plan.
	Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its subsidiaries accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the fair market value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time.

	Offering Periods.  The Plan shall be implemented by consecutive and sometimes overlapping Offering Periods with a new Offering Period commencing on the first Trading Day on or after May 15 and November 15 each year, or on such other date as the Board shall determine, and continuing thereafter until terminated in accordance with Section 20 hereof.  The Board shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected thereafter.

	Participation.

	An eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of Exhibit A to this Plan and filing it with the Company's payroll office prior to the applicable Enrollment Date.
	Payroll deductions for a participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof.

	Payroll Deductions.

	At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation which he or she receives on each pay day during the Offering Period.  
	All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only.  A participant may not make any additional payments into such account.
	A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof, or may increase or decrease the rate of his or her payroll deductions during the Offering Period by completing or filing with the Company a new subscription agreement authorizing a change in payroll deduction rate.  The Board may, in its discretion, limit the number of participation rate changes during any Offering Period.  The change in rate shall be effective with the first full payroll period following five (5) business days after the Company's receipt of the new subscription agreement unless the Company elects to process a given change in participation more quickly.  A participant's subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
	Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's payroll deductions may be decreased to zero percent (0%) at any time during a Purchase Period (or, beginning on and after November 15, 2005, Offering Period).  Payroll deductions shall recommence at the rate provided in such participant's subscription agreement at the beginning of the first Purchase Period (or, beginning on and after November 15, 2005, Offering Period), which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof.
	At the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock.  At any time, the Company may, but shall not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Employee. 

	Grant of Option.  On the Enrollment Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company's Common Stock determined by dividing such Employee's payroll deductions accumulated prior to such Exercise Date and retained in the Participant's account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall an Employee be permitted to purchase during each Purchase Period (or, beginning on and after November 15, 2005, Offering Period) more than 10,000 shares of the Company's Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12 hereof.  The Board may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of the Company's Common Stock an Employee may purchase during each Purchase Period of such Offering Period (or, beginning on and after November 15, 2005, Offering Period).  Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof.  The option shall expire on the last day of the Offering Period. 

	Exercise of Option.  

	Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account.  No fractional shares shall be purchased; any payroll deductions accumulated in a participant's account which are not sufficient to purchase a full share shall be retained in the participant's account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 hereof.  Any other monies left over in a participant's account after the Exercise Date shall be returned to the participant.  During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or her.
	If the Board determines that, on a given Exercise Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Exercise Date, the Board may in its sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro rata allocation of the shares available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 hereof.  The Company may make pro rata allocation of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the Company's shareholders subsequent to such Enrollment Date.

	Delivery.  As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to each participant, as appropriate, of a certificate representing the shares purchased upon exercise of his or her option.

	Withdrawal.

	A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company in the form of Exhibit B to this Plan.  All of the participant's payroll deductions credited to his or her account shall be paid to such participant promptly after receipt of notice of withdrawal and such participant's option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period.  If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new subscription agreement.
	A participant's withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.

	Termination of Employment.

Upon a participant's ceasing to be an Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant's account during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 hereof, and such participant's option shall be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant's customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice.

	Interest.  No interest shall accrue on the payroll deductions of a participant in the Plan.

	Stock.

	Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of the Company's Common Stock which shall be made available for sale under the Plan shall be 300,000 shares plus an annual increase to be added on the first day of the Company's fiscal year beginning in 2001, equal to the lesser of (i) 350,000 shares, (ii) 1% of the outstanding shares on such date or (iii) a lesser amount determined by the Board.  
	The participant shall have no interest or voting right in shares covered by his option until such option has been exercised.
	Shares to be delivered to a participant under the Plan shall be registered in the name of the participant or in the name of the participant and his or her spouse.

	Administration.  The Plan shall be administered by the Board or a committee of members of the Board appointed by the Board.  The Board or its committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan.  Every finding, decision and determination made by the Board or its committee shall, to the full extent permitted by law, be final and binding upon all parties.

	Designation of Beneficiary.

	A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant's account under the Plan in the event of such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash.  In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option.  If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.
	Such designation of beneficiary may be changed by the participant at any time by written notice.  In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

	Transferability.  Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant.  Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.

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

	Reports.  Individual accounts shall be maintained for each participant in the Plan.  Statements of account shall be given to participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.

 

	Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.

	Changes in Capitalization.  Subject to any required action by the shareholders of the Company, the Reserves, the maximum number of shares each participant may purchase each Purchase Period (or, beginning on and after November 15, 2005, Offering Period) (pursuant to Section 7), as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration."  Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.

	Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board.  The New Exercise Date shall be before the date of the Company's proposed dissolution or liquidation.  The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.  

	Merger or Asset Sale.  In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the option, any Purchase Periods (or, beginning on and after November 15, 2005, Offering Periods) then in progress shall be shortened by setting a new Exercise Date (the "New Exercise Date") and any Offering Periods then in progress shall end on the New Exercise Date.  The New Exercise Date shall be before the date of the Company's proposed sale or merger.  The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

	
	Amendment or Termination.

	The Board of Directors of the Company may at any time and for any reason terminate or amend the Plan.  Except as provided in Section 19 hereof, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Board of Directors on any Exercise Date if the Board determines that the termination of the Offering Period or the Plan is in the best interests of the Company and its shareholders.  Except as provided in Section 19 and this Section 20 hereof, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant.  To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company shall obtain shareholder approval in such a manner and to such a degree as required.
	Without shareholder consent and without regard to whether any participant rights may be considered to have been "adversely affected," the Board (or its committee) shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its sole discretion advisable which are consistent with the Plan.
	In the event the Board determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:

	altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;
	shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and
	allocating shares.

Such modifications or amendments shall not require stockholder approval or the consent of any Plan participants.

	Notices.  All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

	Conditions Upon Issuance of Shares.  Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.

	Term of Plan.  The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company.  It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 20 hereof.

EXHIBIT A

SIRENZA MICRODEVICES, INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

 

_____ Original ApplicationEnrollment Date:___________

_____ Change in Payroll Deduction RateOffering Period:  ________________________

_____ Change of Beneficiary(ies) 
1.___________________________ (PRINT NAME) hereby elects to participate in the Sirenza Microdevices, Inc. Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and subscribes to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Employee Stock Purchase Plan.

2.I hereby authorize payroll deductions from each paycheck in the amount of ____% of my Compensation on each payday (from 0 to 15%) during the Offering Period in accordance with the Employee Stock Purchase Plan.  (Please note that no fractional percentages are permitted.)

3.I understand that said payroll deductions shall be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Employee Stock Purchase Plan.  I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option.

4.I have received a copy of the complete Employee Stock Purchase Plan.  I understand that my participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the Plan.  I understand that my ability to exercise the option under this Subscription Agreement is subject to shareholder approval of the Employee Stock Purchase Plan.

5.Shares purchased for me under the Employee Stock Purchase Plan should be issued in the name(s) of (Employee or Employee and Spouse only).

6.I understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Enrollment Date (the first day of the Offering Period during which I purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares.  I hereby agree to notify the Company in writing within 30 days after the date of any disposition of my shares and I will make adequate provision for Federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Common Stock.  The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by me.  If I dispose of such shares at any time after the expiration of the 2-year and 1-year holding periods, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 5% of the fair market value of the shares on the first day of the Offering Period.  The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.

7.I hereby agree to be bound by the terms of the Employee Stock Purchase Plan.  The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Employee Stock Purchase Plan.

8.In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Employee Stock Purchase Plan:

BENEFICIARY NAME:  (Please print)

_______________________________________________________________________

(First)(Middle)(Last)

_________________________

Relationship

(Address)

 

 

 

 

 

 

 

 

 

Employee's Social

Security Number:____________________________________

Employee's Address:____________________________________

____________________________________

____________________________________

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:_________________________

Signature of Employee

Spouse's Signature (If beneficiary other than spouse)

EXHIBIT B

SIRENZA MICRODEVICES, INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

 

The undersigned participant in the Offering Period of the Sirenza Microdevices, Inc. Employee Stock Purchase Plan which began on ____________, ______ (the "Enrollment Date") hereby notifies the Company that he or she hereby withdraws from the Offering Period.  He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period.  The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated.  The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.
Name and Address of Participant:

________________________________

________________________________

________________________________

Signature:

________________________________

Date:____________________________

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