2004 STOCK INCENTIVE PLAN

(Amendment and Restatement approved by the Company’s Board of Directors on

January 24, 2005)

(Amendment and Restatement approved by the Company’s Board of Directors on October 14, 2008

and by the Company’s shareholders on December 11, 2008)

1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel, to provide additional incentives to Employees, Directors and Consultants and to promote the success of the Company’s business.

2. Definitions. The following definitions shall apply as used herein and in the individual Award Agreements except as defined otherwise in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supercede the definition contained in this Section 2.

(a) “Administrator” means the Board or any of the Committees appointed to administer the Plan.

(b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

(c) “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein.

(d) “Assumed” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company or (ii) the contractual obligations represented by the Award are expressly assumed (and not simply by operation of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number and type of securities of the successor entity or its Parent subject to the Award and the exercise or purchase price thereof which at least preserves the compensation element of the Award existing at the time of the Corporate Transaction as determined in accordance with the instruments evidencing the agreement to assume the Award.

(e) “Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock Unit or other right or benefit under the Plan granted to a Grantee pursuant to this Plan.

(f) “Award Agreement” means the written agreement, contract, or other instrument or document, including through an electronic medium, evidencing the grant, including the terms and conditions, of an Award, including any amendments thereto.

(g) “Board” means the Board of Directors of the Company.

(h) “Cause” means, with respect to the termination by the Company or a Related Entity of the Grantee’s Continuous Service, that such termination is for “Cause” as such term is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the

A-1

determination of the Administrator, the Grantee’s: (i) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person.

(i) “Change in Control” means a change in ownership or control of the Company effected through either of the following transactions:

(i) the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s shareholders, which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such shareholders accept, or

(ii) a change in the composition of the Board over a period of thirty-six (36) months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors.

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

(k) “Committee” means any committee composed of members of the Board appointed to administer the Plan in accordance with Section 4 hereof.

(l) “Common Stock” means the common stock of the Company.

(m) “Company” means Pericom Semiconductor Corporation, a California corporation, or any successor entity that adopts the Plan in connection with a Corporate Transaction.

(n) “Consultant” means any natural person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render bona fide consulting or advisory services to the Company or such Related Entity, whose services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.

(o) “Continuing Directors” means members of the Board who either (i) have been Board members continuously for a period of at least thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.

(p) “Continuous Service” means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be

A-2

fulfilled before a termination as an Employee, Director or Consultant can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which the Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds three (3) months, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the first day following the expiration of such three (3) month period.

(q) “Corporate Transaction” means any of the following transactions, provided, however, that the Administrator shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding and conclusive:

(i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;

(ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company;

(iii) the complete liquidation or dissolution of the Company;

(iv) any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than forty percent (40%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction; or

(v) acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction.

(r) “Covered Employee” means an Employee who is, or could be, a “covered employee” under Section 162(m)(3) of the Code.

(s) “Director” means a member of the Board or the board of directors of any Related Entity.

A-3

(t) “Disability” means as defined under the long-term disability policy of the Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee is covered by such policy. If the Company or the Related Entity to which the Grantee provides service does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.

(u) “Dividend Equivalent Right” means a right, payable solely in cash or property other than Shares, entitling the Grantee to compensation measured by dividends paid with respect to Common Stock.

(v) “Employee” means any person, including an Officer or Director, who is in the employ of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance but shall exclude individuals who are classified by the Company or a Related Entity as (a) leased from or otherwise employed by a third party, (b) independent contractors or (c) intermittent or temporary, even if any such classification is changed retroactively as a result of an audit, litigation or otherwise. The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.

(w) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(x) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i) If the Common Stock is listed on one or more established stock exchanges or national market systems, 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 sale price for such stock as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination (or, if no sale occurred on that date, on the first immediately preceding trading date on which a sale occurred), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities dealer on the date of determination (or if no sale occurred on that date, on the first immediately preceding date on which a sale is reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(iii) In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good faith.

(y) “Full Value Award” means any Award other than an Option, SAR or other Award for which the Grantee pays the intrinsic value (whether directly or by forgoing a right to receive a payment from the Company or a Related Entity that employs the Grantee).

A-4

(z) “Grantee” means an Employee, Director or Consultant who receives an Award under the Plan.

(aa) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

(bb) “Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(cc) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(dd) “Option” means a right to purchase Shares pursuant to an Award Agreement granted under the Plan.

(ee) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(ff) “Performance-Based Compensation” means compensation that is intended to qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code.

(gg) “Plan” means this 2004 Stock Incentive Plan, as amended from time to time.

(hh) “Related Entity” means any Parent or Subsidiary of the Company and any business, corporation, partnership, limited liability company or other entity in which the Company or a Parent or a Subsidiary of the Company holds a substantial ownership interest, directly or indirectly.

(ii) “Replaced” means that pursuant to a Corporate Transaction the Award is replaced with a comparable stock award or a cash incentive program of the Company, the successor entity (if applicable) or Parent of either of them which preserves the compensation element of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same (or a more favorable) vesting schedule applicable to such Award. The determination of Award comparability shall be made by the Administrator and its determination shall be final, binding and conclusive.

(jj) “Restricted Stock” means Shares awarded under the Plan to the Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator.

(kk) “Restricted Stock Units” means a right to receive the equivalent value of a Share, which may be settled in cash, Shares or other securities or a combination of cash, Shares or other securities as established by the Administrator, and which shall be evidenced by a bookkeeping entry representing the equivalent of one Share.

(ll) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.

(mm) “SAR” means a stock appreciation right entitling the Grantee to a payment equal to the excess of the Fair Market Value of a specified number of Shares on the date the SAR is exercised over the Fair Market Value on the date the SAR was granted, as established by the Administrator.

A-5

(nn) “Share” means a share of the Common Stock.

(oo) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan.

(a) Subject to the provisions of Section 10 hereof, the maximum aggregate number of Shares which may be issued pursuant to all Awards is 5,250,000 Shares, all of which may be issued pursuant to Incentive Stock Options. The Shares to be issued pursuant to Awards may be authorized, but unissued, reacquired Common Stock (treasury shares) or Shares purchased on the open market.

(b) Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited or repurchased by the Company at the lower of their original purchase price or their Fair Market Value at the time of repurchase, such Shares shall become available for future grant under the Plan. For purposes of determining the maximum number of Shares available for issuance pursuant to Section 3(a) hereof, each Share which is issued pursuant to a Full Value Award shall be counted as if 1.5 Shares had been so issued. In addition, the following Shares shall be counted against the maximum number of Shares available for issuance pursuant to Section 3(a) hereof and shall not be returned to the Plan: (i) Shares covered by an Award which are surrendered in payment of the Award exercise or purchase price or in satisfaction of tax withholding obligations incident to the exercise of an Award; (ii) Shares that are not issued or delivered as a result of the net settlement of an outstanding SAR or Option; or (iii) Shares that are repurchased on the open market with the proceeds of the exercise of an Option.

(c) Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. To the extent permitted by Applicable Law, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or any Subsidiary of the Company shall not be counted against Shares available for grant pursuant to this Plan. Dividend Equivalent Rights shall be payable solely in cash and therefore the issuance of Dividend Equivalent Rights shall not be deemed to reduce the maximum aggregate number of Shares which may be issued under the Plan. Notwithstanding the provisions of this Section 3(c), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.

4. Administration of the Plan.

(a) Plan Administrator.

(i) Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are Officers, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board (or subcommittee of the Committee), which Committee or subcommittee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. Anything to the contrary in the foregoing notwithstanding, the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to all Awards granted to Directors who are not also Employees. The composition of the Committee shall also meet any existing standards prescribed by the principal securities market on which the Common Stock is traded.

A-6

(ii) Administration With Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board (or subcommittee of the Committee), which Committee (or subcommittee) shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee or subcommittee shall continue to serve in its designated capacity until otherwise directed by the Board. To the extent permitted by Applicable Law, the Board may authorize one or more Officers to grant or amend Awards to Grantees other than Officers, Covered Employees, or Officers to whom authority to grant or award Awards has been delegated hereunder, and the Board may limit such authority as it determines from time to time.

(iii) Administration With Respect to Covered Employees. Notwithstanding the foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee delegated by the Board (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee.

(iv) Administration Errors. In the event an Award is granted in a manner inconsistent with the provisions of this Section (4)(a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.

(b) Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:

(i) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

(ii) to determine whether and to what extent Awards are granted hereunder;

(iii) to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder;

(iv) to approve forms of Award Agreements for use under the Plan;

(v) to determine the terms and conditions of any Award granted hereunder;

(vi) to amend the terms of any outstanding Award granted under the Plan, provided that (A) any amendment that would adversely affect in any material way the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent; provided, however, that an amendment that may cause an Incentive Stock Option to become a Non-Qualified Stock Option or that is required to comply with Applicable Law or to avoid adverse tax consequences under Section 409A of the Code shall not be treated as adversely affecting the rights of a Grantee; and (B) the vesting schedule for Full Value Awards may only be amended in the event of a Corporate Transaction, a Change in Control or the Grantee’s death or Disability;

A-7

(vii) to construe and interpret the terms of, and any matter arising pursuant to, the Plan and Awards, including without limitation, any notice of Award or Award Agreement granted pursuant to the Plan;

(viii) to grant Awards to Employees, Directors and Consultants employed outside the United States on such terms and conditions different from those specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable to further the purpose of the Plan;

(ix) to determine whether, to what extent, and pursuant to what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; and

(x) to take such other action and make all other decisions and determinations not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

(c) Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or as Officers or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within thirty (30) days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the same.

(d) Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

5. Eligibility.

(a) Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time and in accordance with Section 5(b) hereof. No Employee, Director or Consultant shall have the right to be granted an Award pursuant to this Plan.

(b) Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in countries outside the United States in which the Company and its Related Entities operate or have Employees, Directors or Consultants, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which Related Entities shall be covered by the Plan; (ii) determine which Employees, Directors or Consultants outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to Employees, Directors or Consultants

A-8

outside the United States to comply with Applicable Laws of jurisdictions outside of the United States; (iv) establish subplans and modify exercise procedures and other terms and procedures and rules, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to this Plan as appendices), including adoption of rules, procedures or subplans applicable to particular Related Entities or Grantees residing in particular locations; provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Sections 3 and 6(g) hereof; and (v) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules, procedures and subplans with provisions that limit or modify rights on death, disability or retirement or on termination of employment, available methods of exercise or settlement of an Award, payment of income, social insurance contributions and payroll taxes, the shifting of employer tax liability to the Grantee; and the withholding procedures and handling of any Share certificates or other indicia of ownership which may vary with local requirements. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code, any securities law or governing statute or any other Applicable Laws.

6. Terms and Conditions of Awards.

(a) Types of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) cash or (iii) an Option, a SAR, or similar right with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions. Such awards include, without limitation, Options, SARs, sales or bonuses of Restricted Stock, Restricted Stock Units or Dividend Equivalent Rights, and an Award may consist of one such security or benefit, or two (2) or more of them in any combination or alternative.

(b) Designation of Award; ISO Dollar Limitation. Each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, an Option will qualify as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of the Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the grant date of the relevant Option.

(c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any one of, or combination of, the following: (i) increase in share price, (ii) earnings per share, (iii) total shareholder return, (iv) operating margin, (v) gross margin, (vi) return on equity, (vii) return on assets, (viii) return on investment, (ix) operating income, (x) net operating income, (xi) pre-tax profit, (xii) cash flow, (xiii) revenue, (xiv) expenses, (xv) earnings before interest, taxes and depreciation, (xvi) economic value added, and (xvii) market share. The performance criteria may be applicable to overall performance of the Company or Related Entities and/or to the performance of any

A-9

individual division or business unit of the Company or any Related Entity. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement. The Administrator, in its discretion, may, to the extent consistent with, and, in the case of an Award that is intended to be Performance-Based Compensation, within the time prescribed by Section 162(m) of the Code, appropriately adjust or modify the calculation of the performance criteria in order to prevent the dilution or enlargement of the rights of Grantees (a) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, (b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (c) in response to, or in anticipation of, changes in Applicable Laws, regulations, accounting principles, or business conditions.

(d) Acquisitions and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction.

(e) Deferral of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award. The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program.

(f) Separate Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time.

(g) Individual Limitations on Awards.

(i) Individual Limit for Options and SARs. The maximum number of Shares with respect to which Options and SARs may be granted to any Grantee in any calendar year shall be 500,000. In connection with a Grantee’s commencement of Continuous Service, a Grantee may be granted Options and SARs for up to an additional 250,000 Shares which shall not count against the limit set forth in the previous sentence. The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10 hereof. To the extent required by Section 162(m) of the Code or the Department of Treasury regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum number of Shares with respect to which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option (or in the case of a SAR, the reduction of the base amount on which the stock appreciation is calculated in order to reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR.

(ii) Individual Limit for Full Value Awards. For Full Value Awards that are intended to be Performance-Based Compensation, the maximum number of Shares with respect to which such Awards may be granted to any Grantee in any calendar year shall be 500,000. The foregoing limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10 hereof. To the extent required by Section 162(m) of the Code or the

A-10

Department of Treasury regulation thereunder in applying the foregoing limitations with respect to a Grantee, if any Full Value Award is cancelled, the number of Shares covered by the cancelled Award shall continue to count against the maximum number of Shares with respect to which Full Value Awards may be granted to the Grantee.

(iii) Deferral. If the vesting or receipt of Shares under an Award is deferred to a later date, any amount (whether denominated in Shares or cash) paid in addition to the original number of Shares subject to such Award will not be treated as an increase in the number of Shares subject to the Award if the additional amount is based either on a reasonable rate of interest or on one or more predetermined actual investments such that the amount payable by the Company at the later date will be based on the actual rate of return of a specific investment (including any decrease as well as any increase in the value of the specified investment).

(h) Term of Award. The term of each Award shall be the term stated in the Award Agreement, provided, however, that the term of an Option or SAR shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement. Notwithstanding the foregoing, the specified term of any Award shall not include any period for which the Grantee has elected to defer the receipt of the Shares or cash issuable pursuant to the Award.

(i) Limits on Transfer. Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee. No right or interest of a Grantee in any Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Grantee to any other party other than the Company or a Subsidiary. Except as otherwise provided by the Administrator, no Award shall be assigned, transferred, or otherwise disposed of by a Grantee other than by will or the laws of descent and distribution or pursuant to beneficiary designation procedures approved from time to time by the Administrator. The Administrator by express provision in the Award or an amendment thereto may permit an Award (other than an Incentive Stock Option) to be transferred to, exercised by and paid to certain persons or entities related to the Grantee, including, but not limited to, members of the Grantee’s family, charitable institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of the Grantee’s family and/or charitable institutions, or to such other persons or entities as may be expressly approved by the Administrator, pursuant to such conditions and procedures as the Administrator may establish. Any permitted transfer shall be subject to the condition that the Administrator receive evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes (or to a “blind trust” in connection with the Grantee’s termination of employment or service with the Company or a Related Entity to assume a position with a governmental, charitable, educational or similar non-profit institution) and on a basis consistent with the Company’s lawful issue of securities.

(j) Vesting of Full Value Awards. Full Value Awards granted under the Plan shall vest and be released from the risk of forfeiture over a period of not less than three (3) years measured from the date of grant of the Award. Notwithstanding the foregoing, Full Value Awards subject to performance-based vesting may vest and be released from the risk of forfeiture over a period of not less than one (1) year measured from the date of grant of the Award. As provided in Section 4(b)(vi) hereof, the vesting schedule for Full Value Awards may only be amended in the event of a Corporate Transaction or a Change in Control or in the event of the Grantee’s death or Disability.

A-11

(k) Time of Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such other date as is determined by the Administrator.

(l) Notice of Disposition. The Grantee shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Stock Option within (i) two years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of such Shares to the Grantee.

(m) Substitution of SAR. The Administrator may provide in the Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a SAR for such Option at any time prior to or upon exercise of such Option; provided, that such SAR shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, have a base appreciation amount equal to not less than one hundred percent (100%) of the Fair Market Value per Share on the date such substituted Option was originally granted and have a term that is no greater than the original term of the substituted Option.

7. Award Exercise or Purchase Price, Consideration and Taxes.

(a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows:

(i) In the case of an Incentive Stock Option:

(A) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

(B) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(iii) In the case of SARs, the base appreciation amount shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant, unless granted pursuant to Section 6(m) hereof.

(iv) In the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(v) In the case of other Awards, such price as is determined by the Administrator.

(vi) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d) hereof, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award.

(b) Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award, including the method of payment, shall be

A-12

determined by the Administrator. In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following:

(i) cash;

(ii) check;

(iii) surrender of Shares which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised;

(iv) with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions (on a form prescribed by the Company) to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares, and (B) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction;

(v) any other form and method that is consistent with Applicable Laws; or

(vi) any combination of the foregoing methods of payment.

The Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Award Agreement described in Section 4(b)(iv), or by other means, grant Awards which do not permit all of the foregoing forms of consideration to be used in payment for the Shares or which otherwise restrict one or more forms of consideration. Notwithstanding any other provision of the Plan to the contrary, no Grantee who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise or purchase price of an Award, or continue any extension of credit with respect to the exercise or purchase price of an Award, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

(c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other person until such Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of any non-U.S., federal, state, or local income and employment tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares, vesting of an Award or such other taxable event arising under the Plan. The Company or any Related Entity, as appropriate, shall have the authority and the right to deduct or withhold, or require a Grantee to remit to the Company, an amount sufficient to satisfy U.S. federal, state, and local taxes and taxes imposed by jurisdictions outside of the United States (including the Grantee’s employment tax obligations) required by law to be withheld with respect to any taxable event concerning a Grantee arising as a result of this Plan, or to take such other action as may be necessary in the opinion of the Company or a Related Entity, as appropriate, to satisfy withholding obligations for the payment of taxes. The Administrator may, in its discretion and in satisfaction of the foregoing requirement, allow a Grantee to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of Shares which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Grantee of such Award within six months (or such other period as may be determined by the Administrator) after such Shares were acquired by the Grantee from the Company) in

A-13

order to satisfy the Grantee’s U.S. federal, state, local and non-U.S. income and payroll tax liabilities with respect to the issuance, vesting, exercise or payment of the Award shall be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income.

8. Exercise of Award.

(a) Procedure for Exercise; Rights as a Shareholder.

(i) Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement.

(ii) An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award, and full payment for the Shares with respect to which the Award is exercised has been made.

(b) Exercise of Award Following Termination of Continuous Service.

(i) An Award may not be exercised after the expiration date of such Award set forth in the Award Agreement and may be exercised following the termination of a Grantee’s Continuous Service only to the extent provided in the Award Agreement.

(ii) Where the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee’s Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first.

(iii) Any Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of a Grantee’s Continuous Service shall convert automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the Award Agreement.

9. Conditions Upon Issuance of Shares; Book Entry Procedures.

(a) Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(b) As a condition to the exercise of an Award, the Company may require the person exercising such Award 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 Applicable Laws.

(c) All certificates evidencing Shares delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions with which the Administrator deems necessary or advisable

A-14

to comply. The Administrator may place legends on any certificate evidencing Shares to reference restrictions applicable to the Shares.

(d) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any Applicable Law, the Company shall not deliver to any Grantee certificates evidencing Shares issued in connection with any Award, and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

10. Adjustments Upon Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Awards may be granted to any Grantee in any calendar year of the Company, as well as any other terms that the Administrator determines require adjustment, shall be equitably adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, or (iii) as the Administrator may determine in its discretion, any other transaction with respect to Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; 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 non-discretionary, and its determination shall be final, binding and conclusive on the Grantee and the Company. Except as the Administrator determines, 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 hereof shall be made with respect to, the number or price of Shares subject to an Award.

11. Corporate Transactions and Changes in Control.

(a) Termination of Award to Extent Not Assumed in Corporate Transaction. Effective upon the consummation of a Corporate Transaction, all outstanding Awards under the Plan shall terminate. However, all such Awards shall not terminate to the extent they are Assumed in connection with the Corporate Transaction.

(b) Acceleration of Award Upon Corporate Transaction or Change in Control.

(i) Corporate Transaction. Except as provided otherwise in an individual Award Agreement, in the event of a Corporate Transaction and:

(A) for the portion of each Award that is Assumed or Replaced, then such Award (if Assumed), the replacement Award (if Replaced), or the cash incentive program (if Replaced) automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares at the time represented by such Assumed or Replaced portion of the Award, immediately upon termination of the Grantee’s Continuous Service if such Continuous Service is terminated by the successor company or the Company without Cause within twelve (12) months after the Corporate Transaction; and

A-15

(B) for the portion of each Award that is neither Assumed nor Replaced, such portion of the Award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares at the time represented by such portion of the Award, immediately prior to the specified effective date of such Corporate Transaction, provided that the Grantee’s Continuous Service has not terminated prior to such date.

(ii) Change in Control. Except as provided otherwise in an individual Award Agreement, following a Change in Control (other than a Change in Control which also is a Corporate Transaction) and upon the termination of the Continuous Service of a Grantee if such Continuous Service is terminated by the Company or Related Entity without Cause within twelve (12) months after a Change in Control, each Award of such Grantee which is at the time outstanding under the Plan automatically shall become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value), immediately upon the termination of such Continuous Service.

(c) Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option accelerated under this Section 11 in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. To the extent such dollar limitation is exceeded, the excess Options shall be treated as Non-Qualified Stock Options.

12. Expiration Date and Term of Plan. The Plan shall expire on, and no Award may be granted pursuant to the Plan after the tenth anniversary of the Effective Date, except that no Incentive Stock Options may be granted under the Plan after [ • ], the tenth anniversary of the date that the adoption of the amendment and restatement of the Plan was approved by the Board. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.

13. Amendment, Suspension or Termination of the Plan.

(a) The Board may at any time amend, suspend or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s shareholders to the extent such approval is required by Applicable Laws, or if such amendment would lessen the shareholder approval requirements of this Section 13(a); provided further, however, that, absent approval of the shareholders of the Company, except as permitted by Section 10 or 11 hereof, no Option or SAR may be amended to reduce the per share exercise price of the Shares subject to such Option or SAR below the Fair Market Value of a Share exercise price as of the date the Option was granted and no Option or SAR may be granted in exchange for an Option or SAR having a higher per share exercise price that is less than the Fair Market Value of a Share on the date that the original Option or SAR was granted.

(b) No Award may be granted during any suspension of the Plan or after termination of the Plan.

(c) No suspension or termination of the Plan (including termination of the Plan under Section 11, hereof) shall adversely affect in any material respect any rights under Awards already granted to a Grantee; provided, however, that any amendment, suspension or termination of the Plan that causes an Incentive Stock Option to be treated as a Non-Qualified Stock Option or that is required to comply with Applicable Law or to avoid adverse tax consequences under Section 409A of the Code shall not be treated as adversely affecting the rights of a Grantee.

A-16

14. Reservation of Shares.

(a) The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

(b) The inability or impracticability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be advisable or necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

15. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or any Related Entity to terminate the Grantee’s Continuous Service at any time, with or without Cause, and with or without notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee who is employed at will is in no way affected by its determination that the Grantee’s Continuous Service has been terminated for Cause for the purposes of this Plan.

16. No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

17. Unfunded Obligation. Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.

18. Plan Approval. The Plan was originally adopted by the Board in October 2004 and approved by the Company’s shareholders on December 15, 2004. On January 24, 2005, the Board adopted and approved an amendment and restatement of the Plan, which was not subject to shareholder approval. The amendment and restatement of the Plan that was adopted and approved by the Board on [•], shall become effective upon approval by the shareholders of the Company (the “Effective Date”).

19. Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

A-17

20. No Share Rights. Except as otherwise provided herein, a Grantee shall have none of the rights of a shareholder with respect to Shares covered by any Award, including the right to vote or receive dividends, until the Grantee becomes the record owner of such Shares, notwithstanding the exercise of an Option or other Award.

21. Fractional Shares. No fractional Shares shall be issued and the Administrator shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.

22. Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Grantee may be permitted through the use of such an automated system.

23. Internal Revenue Code Section 409A. Except as provided in Section 24 hereof, to the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, and except as provided in Section 24 hereof, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Award Agreement, adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions that the Administrator determines in its sole discretion are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance, and thereby avoid the application of any penalty taxes under such Section.

24. No Representations or Covenants with respect to Tax Exemption or Qualification. Although the Company may endeavor to (1) qualify an Award for favorable tax treatment under the laws of the United States or jurisdictions outside of the United States (e.g., incentive stock options under Section 422 of the Code or French-qualified stock options) or (2) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment, anything to the contrary in this Plan, including Section 23 hereof, notwithstanding. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan.


FOR THE BOARD OF DIRECTORS

/s/ Chi-Hung (John) Hui, Ph.D. Chi-Hung (John) Hui, Ph.D.
/s/ Chi-Hung (John) Hui, Ph.D. Chi-Hung (John) Hui, Ph.D.
Senior Vice President, Research and Development and Secretary


		Page
INFORMATION CONCERNING SOLICITATION AND VOTING		1

PROPOSAL NO. 1 ELECTION OF DIRECTORS		3

PROPOSAL NO. 2 APPROVAL OF AMENDMENT AND RESTATEMENT OF THE 2004 STOCK INCENTIVE PLAN		9

PROPOSAL NO. 3 RATIFICATION AND APPROVAL OF APPOINTMENT OF INDEPENDENT REGSISTERED PUBLIC ACCOUNTING FIRM		18

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT		20

COMPENSATION DISCUSSION AND ANALYSIS		21

COMPENSATION COMMITTEE REPORT		27

EXECUTIVE COMPENSATION		28

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS		34

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		35

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		36

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS		38

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		38

OTHER MATTERS		39

FORM 10-K ANNUAL REPORT		39

Name of Nominee	Age	Principal Occupation	Director Since
Alex Chiming Hui	51	Chief Executive Officer, President and Chairman of the Board of Directors	1990
Chi-Hung (John) Hui, Ph.D.	53	Senior Vice President, Research and Development and Director	1990
Hau L. Lee, Ph.D. (1),(2),(3)	55	Director	1999
Siu-Weng Simon Wong, Ph.D. (1),(2),(3)	54	Director	2006
Michael J. Sophie (1)	51	Director	2008


Type of Fee	Amount

Annual Board Retainer (1)	$	25,000
Additional Annual Fee to Chairperson of Audit Committee (2)	$	20,000
Additional Annual Fee to Chairperson of Compensation Committee (3)	$	10,000
Additional Annual Fee to Chairperson of Nominating & Governance Committee (4)	$	6,000
Additional Annual Fee to non-Chairperson Member of Audit Committee (2)	$	7,500
Additional Annual Fee to non-Chairperson Member of Compensation Committee (3)	$	4,000
Additional Annual Fee to non-Chairperson Member of Nominating & Governance Committee (4)	$	3,000


Name (2) (3)	Fees Earned or Paid in Cash ($)		Option Awards ($) (1)		Total ($)
Hau Lee, Ph.D.		35,875		46,627		82,502
Millard (Mel) Phelps(4)		41,250		46,627		87,877
Siu-Weng Simon Wong, Ph.D.		30,375		46,627		77,002
Gary Fischer (5)		—		—		—

	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transactions applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)	Proposed maximum aggregate value of transaction.
	(5)	Total fee paid:

	(1)	Amount previously paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

(1)	These dollar amounts reflect the compensation expenses recognized by our company in FY 2008 for financial statement reporting purposes in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (“FAS 123R”)(disregarding any estimate for forfeitures), for all equity awards made in or before FY 2008. Therefore, these amounts do not represent payments actually received by the directors. The full grant date fair value of options granted in FY 2008 computed in accordance with FAS 123(R), totaled $46,627 for Mr. Lee, $46,627 for Mr. Phelps, $46,627 for Mr. Wong, and 0 for Mr. Fischer.
		•	The assumptions used to calculate the value of the awards are set forth in Note 14 of the Notes to Consolidated Financial Statements in our Form 10-K for the year ended June 28, 2008.
(2)	As of June 28, 2008, each director had the following numbers of shares underlying stock options then outstanding: Dr. Lee: 56,000; Mr. Phelps: 26,000; Dr. Wong: 18,000.
(3)	Mr. Sophie joined our Board in August 2008, after the end of our last fiscal year, and is therefore not included in the table.
(4)	Mr. Phelps will not be standing for re-election at the Annual Meeting.
(5)	Mr. Fischer resigned from our Board in July 2007.

Name of Individual or Group	Number of Shares Underlying Options Granted
Alex Chiming Hui		1,590,500
Chi-Hung (John) Hui		1,272,800
Angela Chen		93,500
Gerry Liu		117,900
Current executive officers as a group		3,074,700

Name of Individual or Group	Number of Shares Underlying Options Granted
Hau L. Lee		66,000
Millard (Mel) Phelps		72,000
Siu-Weng Simon Wong		28,000
Michael J. Sophie		8,000
Current non-employee directors as a group		174,000
All current employees, including officers other than executive officers, as a group		16,239,084


	Fiscal 2008		Fiscal 2007
Audit Fees (1)	$	601,503	$	807,777
Audit-Related Fees (2)		—		—
Tax Fees (3)		—		—
All Other Fees (4)		—		—


Name	Age	Position(s)
Alex Chiming Hui	51	Chief Executive Officer, President and Chairman of the Board of Directors
Chi-Hung (John) Hui, Ph.D.	53	Senior Vice President, Research and Development and Director
Angela Chen	49	Vice President, Finance and Chief Financial Officer
Gerry Liu	52	Senior Vice President, Marketing
Hau L. Lee, Ph.D. (1), (2), (3)	55	Director
Millard (Mel) Phelps (1), (2), (3), (4)	80	Director
Siu-Weng Simon Wong, Ph.D. (1), (2), (3)	54	Director
Michael J. Sophie (1)	51	Director

Named Executive Officer		Individual Performance Goals Set for FY 2008

Alex Chiming Hui		Achievement of predetermined Corporate EPS performance and the average combined performance of the executive officer staff (collectively weighted at 100%)

Chi-Hung (John) Hui		Achieve research, development and implementation of advanced product features for specific product lines and for new business opportunities (collectively weighted at 85%) Achieve implementation of other advanced product features for a specific product line (15%)
Angela Chen		Implementation of information technology infrastructure, performance of specific reporting goals (collectively weighted at 65 %) Performance of specific financial goals (collectively weighted at 35%)

Gery (Shao-Hung) Liu		Increase margin and revenue share for specific product lines and territories, achieve specific revenue growth for new product and new design introductions (collectively weighted at 65%) Marketing and product proposals and assessments, other operating objectives and other financial measurements (collectively weighted at 35%)

Name and Principal Position	Year		Salary ($)			Option Awards ($)(3)		Non-Equity Incentive Plan Compensation ($)			All Other Compensation ($)(4)		Total ($)
Alex Chiming Hui Chief Executive Officer,		2008		309,788	(1)		154,883		88,286	(1)		12,332		565,289
President and Chairman of the Board		2007		277,646	(1)		117,180		88,286	(1)		12,000		495,112

Angela Chen Vice President, Finance		2008		188,077			81,371		55,086	(1)		—		324,534
and CFO		2007		180,000			61,507		55,086	(1)		20,000		316,593

Chi-Hung (John) Hui Senior Vice President,		2008		223,051			107,201		64,144	(1)		12,332		406,728
Research and Development		2007		217,011			77,303		62,645	(1)		12,000		368,959

Dr. Gerry (Shao-Hung) Liu		2008		174,267			122,255		42,400			—		338,922
Senior Vice President, Marketing		2007		32,308	(2)		20,155		—			—		52,463

		Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1)	All other option awards: number of securities underlying options (#)(2)	Exercise or base price of options awards ($/Sh)	Grant date fair value of stock and option awards ($)
Name	Grant Date	Maximum
Alex Chiming Hui	11/2/2007	98,074	60,000	16.03	961,800
Angela Chen	11/2/2007	56,423	17,500	16.03	280,525
Chi-Hung (John) Hui	11/2/2007	66,915	42,000	16.03	673,260
Gerry Liu	n/a	42,400	—	—	—

(1)	Awards shown under “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” are the maximum award amounts under the Company's annual performance cash bonus plan. Under this plan, amounts payable are dependent upon the achievement the Company’s financial performance goals and individual executive officer goals. Participants could receive from 0 to 100% of the maximum award depending on the degree to which goals were achieved. Award maximums are communicated to the executives, the outcomes of which are substantially uncertain at the time they were established. The Company’s annual performance cash bonus plans do not contain thresholds or targets.

(2)	Each of these options was granted pursuant to the Company’s 2004 Stock Incentive Plan, subject to continued employment with the Company. Stock options cliff vest 25% after the first year and monthly thereafter over a period of 36 months The exercise price of each option set forth above was the closing price of our stock on NASDAQ on the grant date.

	Options Awards
Name	Number of Securities Underlying Exercised Options (#) Exercisable			Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Grant Date		Option Expiration Date
Alex Chiming Hui		120,000(2	)		—		5.25		6/25/1999		6/25/2009
		13,906(3	)		—		24.56		3/8/2000		3/8/2010
		160,000(3	)		—		31.38		6/25/2000		6/25/2010
		86,094(3	)		—		24.56		3/8/2000		3/8/2010
		3,336(3	)		—		16.56		4/24/2001		4/24/2011
		120,000(3	)		—		13.96		6/25/2001		6/25/2011
		50,000(2	)		—		11.50		6/24/2002		6/24/2012
		28,594(3	)		—		8.40		4/21/2003		4/21/2013
		35,625(2	)		9,375		8.03		4/18/2005		4/18/2015
		8,750(2	)		51,250		16.03		11/2/2007		11/2/2017
		22,917(2	)		27,083		8.40		7/31/2006		7/31/2016
		35,000(2	)		—		10.50		4/19/2004		4/19/2014
		21,406(3	)		—		8.40		4/21/2003		4/21/2013
		12,500(3	)		—		13.40		10/22/2001		10/22/2011
		36,664(3	)		—		16.56		4/24/2001		4/24/2011

Chi-Hung (John) Hui		80,000(3	)		—		5.25		6/25/1999		6/25/2009
		75,000(3	)		—		13.96		6/25/2001		6/25/2011
		6,125(2	)		35,875		16.03		11/2/2007		11/2/2017
		16,042(2	)		18,958		8.40		7/31/2006		7/31/2016
		23,750(2	)		6,250		8.03		4/18/2005		4/18/2015
		21,000(3	)		—		10.50		4/19/2004		4/19/2014
		12,500(3	)		—		8.40		4/21/2003		4/21/2013
		17,500(3	)		—		8.40		4/21/2003		4/21/2013
		30,000(3	)		—		11.50		6/24/2002		6/24/2012
		7,000(3	)		—		13.40		10/22/2001		10/22/2011
		22,911(3	)		—		16.56		4/24/2001		4/24/2011
		11,646(3	)		—		31.38		6/25/2000		6/25/2010
		2,089(3	)		—		16.56		4/24/2001		4/24/2011
		88,354(3	)		—		31.38		6/25/2000		6/25/2010

Angela Chen		18,958(1	)		16,042		10.25		4/6/2006		4/6/2016
		17,188(1	)		7,812		8.88		9/15/2005		9/15/2015
		2,552(2	)		14,948		16.03		11/2/2007		11/2/2017

Dr. Gerry (Shao Hung) Liu		14,583(1	)		72,917		10.77		5/1/2007		5/1/2017

(1)	All such options vest, subject to continued employment with the Company, at a rate of 25% after the first year and monthly thereafter over a period of 36 months. The exercise price of each option set forth above was the closing price of our stock on NASDAQ on the grant date.
(2)	All such options vest, subject to continued employment with the Company, monthly over a period of 48 months. The exercise price of each option set forth above was the closing price of our stock on NASDAQ on the grant date
(3)	All such options are fully vested.

	Option Awards(1)
	Number of Securities Underlying Unexercised Options (#)
	Exercisable		Unexercisable		Option Exercise Price ($)		Option Expiration Date
Alex Chiming Hui		112,500		—		0.33		5/1/2013
		112,500		—		0.33		5/1/2013
		112,500		—		0.33		5/1/2013
		112,500		—		0.33		5/1/2013

Total		450,000		—

	Option Awards
	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)(1)
Alex Chiming Hui		180,000		2,147,121
Angela Chen		—		—
Chi-Hung (John) Hui		60,000		741,614
Dr. Gerry (Shao-Hung) Liu		12,500		89,762

	One Year Salary Continuation		Bonus (1)		One Year Benefits Continuation		Assumed Realized Value of Accelerated Options (2)		Total (3)
Alex Chiming Hui	$	309,788	$	136,282	$	17,308	$	272,710	$	736,088
Angela Chen	$	188,077	$	69,882	$	9,932	$	279,881	$	547,772
Chi-Hung (John) Hui, Ph.D.	$	223,051	$	88,000	$	17,308	$	188,243	$	516,602
Dr. Gerry (Shao-Hung) Liu	$	216,667	$	—	$	17,563	$	283,288	$	517,518

(1)	In the event of a change of control as of June 28, 2008, each of our executive officers receive a bonus in the amount of no less than twice the amount such executive officer received during the last completed fiscal year.

(2)	These are hypothetical realized values that assume a change in control of Pericom on June 28, 2008, in which the price realized per share of our common stock is assumed to be the closing market price of our stock as of that date ($16.00 per share on Friday, June 27, 2008, the last trading date in FY 2008), based on the following outstanding options held on that date, assuming full acceleration of vesting of stock options for each of the named executive officers:

	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity Compensation Plans Approved by Shareholders
Option Plans (1)		3,739,816	$	13.42		1,203,656
Employee Stock Purchase Plan		—		—		569,323

Equity Compensation Plans not Approved by Shareholders
SaRonix Acquisition Options		133,755	$	10.00		—

Total/Weighted Average		3,873,571	$	11.84		1,772,979

	•		Reviewed and discussed the audited consolidated financial statements with management;

	•		Discussed with Burr, Pilger & Mayer LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as has been or may be modified, superseded or supplemented;

	•		Received the written disclosures and the letter from Burr, Pilger & Mayer LLP regarding auditor independence required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and discussed with Burr, Pilger & Mayer LLP the accounting firm’s independence;

	•		Based on the review and discussions referred to above, recommended to the Board that the audited financial statements be included in the Company’s annual report on Form 10-K for the last fiscal year for filing with the Securities and Exchange Commission.

Name of Beneficial Owner	Shares Beneficially Owned (1)		Percent
Name of Beneficial Owner	Shares Beneficially Owned (1)		Percent
Barclays Global Investors (Deutschland) AG (2)		1,614,007		6.31	%
Dimensional Fund Advisors LP (3)		1,931,059		7.60	%
FMR LLC (4)		1,368,600		5.31	%
Wasatch Advisors, Inc.(5)		1,380,831		5.40	%
Alex Chiming Hui (6)		917,978		3.50	%
Chi-Hung (John) Hui (7)		745,632		2.90	%
Gerry Liu (8)		87,500		*
Angela Chen (9)		89,838		*
Millard Phelps (10)		31,000		*

(1)	Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options held by that person that are currently exercisable or exercisable within 60 days of October 15, 2008 are deemed outstanding. Percentage of beneficial ownership is based upon 25,561,528 shares of Common Stock outstanding as of October 15, 2008. To the Company’s knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person’s name. Except as otherwise indicated, the address of each of the persons in this table is as follows: 3545 North First Street, San Jose, California 95134.
(2)	Based on Schedule 13G, filed February 6, 2008, Barclays Global Investors (Deutschland) AG has the sole power to vote or to direct the vote of 1,248,180 shares and sole dispositive power over 1,614,007 shares; Barclays Global Investors, NA has the sole power to vote 690,738 shares and sole dispositive power over 813,425 shares; Barclays Global Fund Advisors has the sole power to vote 557,442 shares and sole dispositive power over 774,065 shares; Barclays Global Investors, LTD the sole dispositive power over 26,517 shares of the Company’s Common Stock. The address of Barclays Global Investors (Deutschland) AG is Apianstrasse 6, D-85774, Unterföhring, Germany. The address of Barclays Global Investors, NA and Barclays Global Fund Advisors is 45 Fremont Street, San Francisco, CA. The address for Barclays Global Investors, LTD is 1 Royal Mint Court, London, EC3N 4HH, England.
(3)	Based on a Schedule 13G/A filed with the SEC on February 9, 2007, Dimensional Fund Advisors LP, a Delaware Limited Partnership, has sole voting power with respect to 1,931,059 shares of the Company’s Common Stock and sole dispositive power with respect to 1,931,059 shares of the Company’s Common Stock. Address: 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401.
(4)	Based on Schedule 13G, filed February 14, 2008, FMR LLC, a Delaware corporation, has sole voting power with respect to 1,109,400 shares of the Company’s Common Stock and sole dispositive power with respect to 1,368,600 shares of the Company’s Common Stock. Address: 82 Devonshire Street, Boston, MA 02109.
(5)	Based on Schedule 13G/A filed with the SEC on February 14, 2008, Wasatch Advisors, Inc., a Utah corporation, has sole voting power with respect to 1,380,831 shares of the Company’s Common Stock and sole dispositive power with respect to 1,380,831 shares of the Company’s Common Stock. Address: 150 Social Hall Avenue, Salt Lake City, UT 84111.
(6)	Includes 769,708 shares issuable upon exercise of stock options exercisable within 60 days of October 15, 2008.
(7)	Includes 423,833 shares issuable upon exercise of stock options exercisable within 60 days of October 15, 2008.
(8)	Includes 23,438 shares issuable upon exercise of stock options within 60 days of October 15, 2008.
(9)	Includes 45,656 shares issuable upon exercise of stock options exercisable within 60 days of October 15, 2008.
(10)	Includes 26,000 shares issuable upon exercise of stock options exercisable within 60 days of October 15, 2008.
(11)	Includes 56,000 shares issuable upon exercise of stock options exercisable within 60 days of October 15, 2008.
(12)	Includes 18,000 shares issuable upon exercise of stock options exercisable within 60 days of October 15, 2008.
(13)	Includes no shares issuable upon exercise of stock options exercisable within 60 days of October 15, 2008.
(14)	Includes 1,362,635 shares issuable upon exercise of stock options within 60 days of October 15, 2008.

			•	Alex Chiming Hui had seven late Form 4 filings related to 138 transactions occurring in FY2008 under a Rule 10b5-1 trading plan and one late filing in FY2009 related to one transaction which occurred in FY2008.

			•	Chi-Hung (John) Hui had five late Form 4 filings related to 103 transactions occurring in FY2008 under a Rule 10b5-1 trading plan and one late filing in FY2009 related to one transaction which occurred in FY2008.

			•	Millard Phelps had one late Form 4 filing in related to 18 transactions occurring in FY2008 and one late filing in FY2009 related one transaction which occurred in FY2008.
			•	Angela Chen and Hau L. Lee each had one late Form 4 filing in FY2009 related to one transaction each during FY2008
			•	Siu-Weng Simon Wong had one late Form 4 filing in FY2008 related to two transactions.


Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.		x


Date (mm/dd/yyyy)				Signature 1 - Please keep signature within the box				Signature 1 - Please keep signature within the box