Converting to H-4 from H1-B while in US

Hello Friends,

My wife is on H1-B since Feb 2013 and she joined her employer back after a maternity break. Her employer does not have any projects to charger her to. So they gave her 4 weeks time. If she does not get into a project in 2 weeks, she will be asked to go back to parent organization in India or resign.

What is the process to convert to H-4 from H1-B while in US?. How long does that take usually - Is there a premium processing available here?. Her H1-B is valid till sep 2015. Once she gets into H-4, will her H1-B be cancelled?. Will she will be cap-exempt when she try for a new employer who can file her H1-B?.

Plese advise. Thank you very much.