Exhibit 10.1

 

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Notice of Grant of
 
LSI CORPORATION
Restricted Stock Unit Award
 
ID: 94-2712976
Under the
 
1621 BARBER LANE
LSI Corporation 2003 Equity Incentive Plan
 
MILPITAS, CALIFORNIA 95035

 

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GRANTEE NAME
 
Award Number:
 
Address
 
Grant Date:
 
Address
 
Number of Restricted Stock Units:
 

 

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On the grant date shown above, LSI Corporation granted you the number of
restricted stock units shown above under the LSI Corporation 2003 Equity
Incentive Plan.  If and when it vests, each restricted stock unit entitles you
to receive one share of LSI common stock.  We typically will withhold some of
the shares you would receive when the restricted stock units vest to satisfy
applicable tax or similar withholding obligations.
 
All or a portion of your Award may vest on April 1, 2013 if you have not
incurred a Termination of Service prior to that date. Annex A describes how we
will determine the portion of your Award, if any, that will vest on that date. 

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By your signature below, you agree that this award is governed by this Notice of
Grant, the attached Restricted Stock Unit Agreement and the LSI Corporation 2003
Equity Incentive Plan. You acknowledge that you have received, read and
understand this Notice of Grant, the attached agreement and the plan. You agree
to accept as binding all decisions or interpretations of the Board of Directors
of LSI or its delegate regarding any questions relating to the plan, this Notice
of Grant or the attached agreement.

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________________________________________________
   
GRANTEE NAME
   
Date:
   

 

 
 
 

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Annex A

 
In order for your award to vest on the date set forth in the notice of grant,
each of the following conditions must be satisfied:
 
1.  
You must not have incurred a Termination of Service before that date.

 
2.  
LSI’s Revenue Growth must be equal to or better than the Revenue Growth of at
least 50% of the Peers.

 
3.  
The Compensation Committee of LSI’s Board of Directors must certify in writing
(as contemplated by Section 162(m) of the Internal Revenue Code) that the
condition in paragraph 2 was satisfied.

 
If these conditions are satisfied, then the full number of Restricted Stock
Units shown in the notice of grant shall vest; provided, however, that the
Compensation Committee may, in its sole and absolute discretion, on or before
the vesting date set forth in the notice of grant, reduce the number of
Restricted Stock Units that so vest. The Compensation Committee currently
intends to reduce the number of Restricted Stock Units that vest using the
following methodology:
 
1.  
If LSI’s Adjusted Operating Income Growth is not equal to or better than the
Adjusted Operating Income Growth of at least 50% of the Peers, then no
Restricted Stock Units will vest.

 
2.  
If LSI’s Adjusted Operating Income Growth is equal to or better than the
Adjusted Operating Income Growth of at least 50% of the Peers, then the number
of Restricted Stock Units that vest will be reduced to the number obtained by
multiplying your Target Award by the percentage determined in accordance with
the table below.

 

If LSI’s Adjusted Operating Income Growth is equal to or better than  the
Adjusted Operating Income Growth of this percentage of the Peers
Then we will multiply your Target Award by the following percentage to determine
how many Restricted Stock Units vest:
50th
50
60th
100
75th
200

 
The determination of the Compensation Committee will be final and binding. Any
Restricted Stock Units that do not vest will be cancelled. When calculating the
performance tests and the number of Restricted Stock Units that vest, we will
use the following concepts:
 
1.  
No additional Restricted Stock Units will vest if LSI’s Adjusted Operating
Income Growth is greater than the Adjusted Operating Income Growth of more than
75% of the Peers.

 
2.  
For purposes of determining the percentage of the Peers that LSI has
outperformed on Adjusted Operating Income Growth, we will look at the percentage
of the Peer just below LSI and the Peer just above LSI and take the average of
the two.

 
3.  
For purposes of determining how many Restricted Stock Units vest, we will use a
sliding scale for performance between the levels listed in the table. For
example, if LSI’s performance is better than 57% of the Peers, then the payout
will be 85% of your Target Award (i.e., you’ll get 50% for exceeding 50% of the
Peers, plus 35%, which is 70% of the difference between the payout at 50%
performance and 60% performance).

 
4.  
No adjustments to the performance tests will be made if a Peer acquires or
disposes of a business or assets.

 
5.  
If, on or before December 31, 2012, LSI disposes of one or more businesses that,
in the aggregate, accounted for more than $25 million of LSI’s Revenue in the
fiscal year(s) preceding the fiscal year in which the disposition(s) occurred,
then the Revenue from the business(es) disposed of will be excluded from the
calculation of Revenue for all periods.

 
6.  
If, on or before December 31, 2012, LSI acquires one or more businesses that, in
the aggregate account for more than 10% of LSI’s revenue in 2012, then the
Compensation Committee will have the discretion to reduce the number of
Restricted Stock Units that vest (or make no adjustment) as it deems appropriate
in its sole discretion to reflect the acquisition(s) and may consult with the
Audit Committee in making any such determination.

 
7.  
For Peers with a December 31 fiscal quarter end, we will use Revenue and
Adjusted Operating Income for the 12 months ending December 31 of the relevant
year. For Peers with a fiscal quarter that ends on a date other than December
31, we will use Revenue and Adjusted Operating Income for the 12 months ending
on the last day of the fiscal quarter ending immediately before December 31 in
the relevant year.

 
8.  
To compute Revenue and Adjusted Operating Income, we will use information filed
by LSI and the Peers with the U.S. Securities and Exchange Commission in reports
on Form 10-Q and Form 10-K.

 
9.  
No fractions of an RSU will vest. If the number of RSUs that would vest is not a
whole number, then the number of RSUs that vest will be rounded down to the next
whole number.

 
10.  
If a Change in Control occurs and the successor entity assumes this Award, the
performance tests in this Award will be deemed met at a level that would result
in the payout of your Target Award and your Target Award will vest on the date
set forth in the Notice of Grant if you have not incurred a Termination of
Service prior to that date.

 
11.  
In the event of any changes in applicable accounting authority, the Compensation
Committee will have the discretion to make changes or adjustments it deems
appropriate to the performance tests in this Award, or the calculation of those
tests, to maintain the original intent of this Award.

 
Capitalized terms in this Annex A have the following meanings:
 
“Adjusted Operating Income” means a company’s operating income, determined in
accordance with US GAAP, excluding the impact of stock-based compensation,
amortization of intangibles and restructuring charges.
 
“Adjusted Operating Income Growth” means the percentage change in a company’s
Adjusted Operating Income from 2009 to 2012 (i.e., (2012 Adjusted Operating
Income – 2009 Adjusted Operating Income) / 2009 Adjusted Operating Income).
 
“Peers” means those companies identified as the peer group on page 22 of LSI’s
proxy statement for its 2009 annual meeting of stockholders. If a Peer is
acquired or discontinues business operations or does not file financial
statements with the SEC prior to the Vesting Date for any relevant period, then
that company will not be considered a Peer and will be excluded from the
calculations for all periods.
 
“Target Award” means one half (50%) of the number of Restricted Stock Units
indicated in the Notice of Grant.
 
“Revenue” means revenue determined in accordance with US GAAP.
 
“Revenue Growth” means the percentage change in a company’s Revenue from 2009 to
2012 (i.e., (2012 Revenue – 2009 Revenue) / 2009 Revenue).

 
 
 

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