CIRRUS LOGIC, INC.
EXECUTIVE SEVERANCE AND CHANGE OF CONTROL PLAN

1. Introduction.

This Cirrus Logic, Inc. (the “Company”) Executive Severance and Change of
Control Plan (the “Plan”) shall be effective as of October 1, 2007.

(a) Purpose. The purpose of the Plan is to describe eligibility for certain
benefits by those individuals employed by the Company and its subsidiaries at
the level of Chief Executive Officer and Vice President or above and reporting
directly to the Chief Executive Officer (“Eligible Executives”) whose employment
is terminated other than for Cause, or as a result of, or following, a Change of
Control (as defined below). The Plan is intended to be maintained on an unfunded
basis. No participant shall have any right to, or interest in, any assets of the
Company that may be applied by the Company to the payment of benefits under the
Plan.

(b) Effect. This Plan supersedes and replaces any prior policies or practices of
the Company or any of its subsidiaries or affiliated companies that relate to
severance payments or vesting acceleration with respect to options of the
Company with respect to Eligible Executives. Any such policies or procedures, to
the extent they relate to severance payments or vesting acceleration with
respect to options of the Company, are hereby rescinded and shall no longer have
any force or effect to the extent such policies or procedures apply to Eligible
Executives. Notwithstanding the foregoing, this Plan is subordinated to any
individual written (i) severance benefit agreement, (ii) change of control
severance agreement, or (iii) employment agreement that provides for severance
benefits in existence as of the date hereof between any Eligible Executive and
the Company.

2. Definition of Terms. The following capitalized terms used in this Plan shall
have the following meanings:

(a) Cause . “Cause” shall mean (i) gross negligence or willful misconduct in the
performance of an Eligible Executive’s duties to Company; (ii) a material and
willful violation of any federal or state law by an Eligible Executive that if
made public would injure the business or reputation of Company; (iii) refusal or
willful failure by an Eligible Executive to comply with any specific lawful
direction or order of Company or the material policies and procedures of Company
including but not limited to the Company’s Code of Conduct and the Company’s
Insider Trading Policy as well as any obligations concerning proprietary rights
and confidential information of the Company; (iv) conviction (including a plea
of nolo contendere ) of an Eligible Executive of a felony, or of a misdemeanor
that would have a material adverse effect on the Company’s goodwill if such
Eligible Executive were to be retained as an employee of the Company; or
(v) substantial and continuing willful refusal by an Eligible Executive to
perform duties ordinarily performed by an employee in the same position and
having similar duties as such Eligible Executive; in each case as reasonably
determined by the Board of Directors of Company or the successor to the Company
(the “Board of Directors”).

 

(b) Change of Control. “Change of Control” shall mean the occurrence of one or
more of the following with respect to the Company:

(i) the acquisition by any person (or related group of persons), whether by
tender or exchange offer made directly to the Company’s stockholders, open
market purchases or any other transaction or series of transactions, of stock of
the Company that, together with stock of the Company held by such person or
group, constitutes more than fifty percent (50%) of the total fair market value
or total voting power of the then outstanding stock of the Company entitled to
vote generally in the election of the members of the Company’s Board of
Directors;

(ii) a merger or consolidation in which the Company is not the surviving entity,
except for a transaction in which both (A) securities representing more than
fifty percent (50%) of the total combined voting power of the surviving entity
are beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), directly or indirectly, immediately after such
merger or consolidation by persons who beneficially owned common stock
immediately prior to such merger or consolidation and (B) the members of the
Board of Directors immediately prior to the transaction (the “Existing Board”)
constitute a majority of the Board of Directors immediately after such merger or
consolidation;

(iii) any reverse merger in which the Company is the surviving entity but in
which either (A) persons who beneficially owned, directly or indirectly, Common
Stock immediately prior to such reverse merger do not retain immediately after
such reverse merger direct or indirect beneficial ownership of securities
representing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities or (B) the members of the Existing Board do
not constitute a majority of the Board of Directors immediately after such
reverse merger; or

(iv) the sale, transfer or other disposition of all or substantially all of the
assets of the Company (other than a sale, transfer or other disposition to one
or more subsidiaries of the Company).

Notwithstanding the foregoing, to the extent that any amount constituting
nonqualified deferred compensation within the meaning of Section 409A of the
Internal Revenue Code (including any applicable final, proposed or temporary
regulations and other administrative guidance promulgated thereunder) would
become payable under this Plan by reason of a Change of Control, such amount
shall become payable only if the event constituting a Change of Control would
also constitute a change in ownership or effective control of the Company or a
change in the ownership of a substantial portion of the assets of the Company
within the meaning of Section 409A.

(c) Disability. “Disability” shall mean a mental or physical disability, illness
or injury, evidenced by medical reports from a duly qualified medical
practitioner, which renders an Eligible Executive unable to perform any one or
more of the essential duties of his or her position after the provision of
reasonable accommodation, if applicable, for a period of greater than ninety
(90) days within a one year period. “Disabled” has a corresponding meaning.

 

(d) Good Reason. “Good Reason” shall mean an Eligible Executive’s resignation
from Company within thirty (30) days following the occurrence of any of the
following events with respect to such Eligible Executive:

(i) without Eligible Executive’s express written consent, the significant
reduction of Eligible Executive’s duties, authority, responsibilities, job title
or reporting relationships relative to Eligible Executive’s duties, authority,
responsibilities, job title, or reporting relationships as in effect immediately
prior to such reduction, or the assignment to Eligible Executive of such reduced
duties, authority, responsibilities, job title, or reporting relationships,
which reduction or assigned reduction remains in effect five (5) business days
after written notice by the Eligible Executive to the Chief Executive Officer of
such conditions; however, the occurrence of a Change of Control shall not, in
and of itself, constitute a material adverse change in Eligible Executive’s
position, duties or responsibilities;

(ii) a reduction by Company in the base salary of Eligible Executive as in
effect immediately prior to such reduction;

(iii) a material reduction by Company in the kind or level of employee benefits,
including bonuses, to which Eligible Executive was entitled immediately prior to
such reduction with the result that Eligible Executive’s overall benefits
package is significantly reduced;

(iv) the relocation of Eligible Executive’s principal work location to a
facility or a location more than fifty (50) miles from Eligible Executive’s then
present principal work location, without Eligible Executive’s express written
consent; or

(v) the failure of Company to obtain agreement from any successor contemplated
in Section 6 below to provide the benefits provided for in this Plan, as it
exists as the time of succession.

(e) Termination Date. “Termination Date” shall mean:

(i) if an Eligible Executive’s employment is terminated by Company for
Disability, the date designated by Company as the last day of such Eligible
Executive’s employment;

(ii) if an Eligible Executive dies, the date of death;

(iii) if an Eligible Executive’s employment is terminated by Company for any
other reason, the date designated by Company as the last day of such Eligible
Executive’s employment; or

(iv) if an Eligible Executive’s employment is terminated by such Eligible
Executive, the date designated by Company as the effective date of resignation.

 

3. Eligibility for Severance and Other Benefits. Eligible Executives will
receive the benefits described herein under the following circumstances:

(a) Termination in Connection with a Change of Control. If an Eligible
Executive’s employment terminates either by Company without Cause or by such
Eligible Executive for Good Reason at any time during the period commencing upon
a Change of Control and ending twelve (12) months following a Change of Control,
then, conditioned upon the Eligible Executive’s execution and delivery of an
effective release of claims against Company and related parties that releases
Company and such parties from any claims whatsoever arising from or related to
the Eligible Executive’s employment relationship with Company including the
termination of that relationship in a form reasonably acceptable to the Company,
the Eligible Executive will receive the following:

(i) Eligible Executive’s right, title and entitlement to any unvested stock
options or any other securities or similar incentives that have been granted or
issued to Eligible Executive as of the Termination Date, shall automatically be
accelerated in full so as to become immediately and completely vested. Eligible
Executive shall have six months from the Termination Date to exercise any
options. In all other respects, Eligible Executive’s securities shall continue
to be subject to the terms of the applicable equity incentive plan notice of
grant and grant agreement.

(ii) a lump sum cash payment equal to twelve (12) months’ salary at the Eligible
Executive’s base salary rate as of the Termination Date (without taking into
account any reduction in base salary that could trigger Eligible Executive’s
resignation for Good Reason), less applicable withholding taxes or other
withholding obligations of Company and less any amounts to which Eligible
Executive is otherwise entitled under any statutory or Company long or short
term disability plan; and

(iii) if Eligible Executive elects benefits continuation under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) following termination of
employment, payment in full of a reasonable estimate of the full cost of such
benefits (either directly to Eligible Executive or to the appropriate carrier or
administrator at the Company’s election) for twelve (12) months.

(b) Termination Other Than for Cause or in Connection with a Change of Control.
If an Eligible Executive’s employment terminates without Cause (other than in
connection with a Change of Control), then, conditioned upon the Eligible
Executive’s execution and delivery of an effective release of claims against
Company and related parties that releases Company and such parties from any
claims whatsoever arising from or related to the Eligible Executive’s employment
relationship with Company including the termination of that relationship in a
form reasonably acceptable to the Company, the Eligible Executive will receive
the following:

(i) salary continuation for up to six (6) months’ salary (in the case of the
Chief Executive Officer, twelve (12) months’ salary) at the Eligible Executive’s
base salary rate as of the Termination Date, less applicable withholding taxes
or other withholding obligations of Company and less any amounts to which
Eligible Executive is otherwise entitled under any statutory or Company long or
short term disability plan; and

(ii) if Eligible Executive elects benefits continuation under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) following termination of
employment, payment in full of a reasonable estimate of the full cost of such
benefits (either directly to Eligible Executive or to the appropriate carrier or
administrator at the Company’s election) for three (3) months.

(c) Voluntary Resignation; Termination for Cause. If an Eligible Executive’s
employment terminates by reason of voluntary resignation, or if an Eligible
Executive is terminated for Cause, then such Eligible Executive shall not be
entitled to receive any benefits under Sections 3(a) and 3(b) of this Plan.

(d) Disability. If an Eligible Executive suffers from a Disability, Company may
terminate such Eligible Executive’s employment to the extent permitted by law
and the Company will then pay to the Eligible Executive the compensation set
forth in Section 3(b) of this Plan. If such termination occurs within twelve
(12) months following a Change of Control, Company will then pay to that
Eligible Executive the compensation set forth in Section 3(a) of this Plan.

 

(e) Death. If an Eligible Executive’s employment is terminated due to the death
of such Eligible Executive, the Company will pay the compensation set forth in
Section 3(b) to the former Eligible Executive’s estate. If an Eligible
Executive’s employment is terminated due to the death of such Eligible Executive
within twelve (12) months following a Change of Control, then the compensation
set forth in Section 3(a) of this Plan will be paid to the former Eligible
Executive’s estate.

(f) Application of Section 409A. Notwithstanding any inconsistent provision of
this Plan, to the extent the Company determines in good faith that (a) one or
more of the payments or benefits received or to be received by an Eligible
Executive pursuant to this Plan in connection with such Eligible Executive’s
termination of employment would constitute deferred compensation subject to the
rules of Section 409A, and (b) that the Eligible Executive is a “specified
employee” under Section 409A, then only to the extent required to avoid the
Eligible Executive’s incurrence of any additional tax or interest under
Section 409A of the Code, such payment or benefit will be delayed until the date
which is six (6) months after the Eligible Executive’s “separation from service”
within the meaning of Section 409A. The Company will revise any applicable
provisions of this Plan to maintain to the maximum extent practicable the
original intent of the applicable Plan provisions without violating the
provisions of Section 409A of the Code, if the Company deems such revisions
necessary or advisable pursuant to guidance under Section 409A to avoid the
incurrence of any such interest and penalties. Such revisions shall not result
in a reduction of the aggregate amount of payments or benefits under this Plan.

(g) Coordination with Other Change of Control Benefits, Severance Benefits or
Debts. If an Eligible Executive is entitled to cash payments, accelerated
vesting of stock options or restricted stock grants, or any other benefits from
Company following the termination of such Eligible Executive’s employment under
any other agreement, plan, policy or law, then the benefits received by that
Eligible Executive under this Plan shall be reduced by the benefits received by
Eligible Executive from Company under such other plans, programs, arrangements,
agreements or requirements. If an Eligible Executive is indebted to Company at
the time of a termination that would give rise to severance benefits under
Sections 3(a) or 3(b), the Company reserves the right to offset such severance
payment under the Plan by the amount of such indebtedness.

4. At-Will Employment. Each Eligible Executive’s employment is and shall
continue to be at-will, as defined under applicable law. If an Eligible
Executive’s employment terminates for any reason other than as specified in
Section 3, such Eligible Executive shall not be entitled to any benefits,
damages, awards or compensation under this Plan.

5. Tax Matters. The Company may withhold from any amounts payable under the Plan
such federal, state and local taxes as may be required to be withheld. In the
event that any payment or other benefits provided for in this Plan or otherwise
payable to an Eligible Executive (i) constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), and (ii) become subject to the excise tax imposed by Section 4999 of
the Code (or any corresponding provisions of state tax law), then,
notwithstanding the other provisions of this Plan, such Eligible Executive’s
benefits under Section 3 will not exceed the amount which produces the greatest
after-tax benefit to the Eligible Executive. For purposes of the foregoing, the
greatest after-tax benefit will be determined within thirty (30) days after the
Termination Date, by the Eligible Executive in his/her sole discretion. If no
such determination is made by the Eligible Executive within thirty (30) days of
the Termination Date, then the Company will pay the benefits as provided in
Section 3.

6. Company’s Successors. The Company shall require that any successor to Company
(whether direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of Company’s business
and/or assets agree to perform in accordance with this Plan in the same manner
and to the same extent as Company would be required to perform such obligations
in the absence of a succession.

7. Exclusive Benefits. Eligible Executives shall not be entitled to any
payments, compensation, benefits or other consideration from the Company, apart
from those identified in Section 3, on account of a termination.

8. Severability, Enforcement. If any provision of this Plan, or the application
thereof to any person, place or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Plan and such provisions as applied to other persons, places and
circumstances shall remain in full force and effect.

9. General.

(a) Notice. Notices and all other communications contemplated by this Plan shall
be in writing and shall be deemed to have been duly given either (i) when
personally delivered or sent by facsimile or (ii) five (5) days after being
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. In the case of an Eligible Executive, mailed notices shall be
addressed to him or her at the home address or facsimile number which he or she
most recently communicated to Company in writing. In the case of Company, mailed
notices or notices sent by facsimile shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its General
Counsel or Chief Financial Officer.

(b) Amendment. The Company reserves the right to amend or terminate this Plan
upon written notice to Eligible Executives. Upon a Change of Control, this Plan
will become non-modifiable without the consent of the affected Eligible
Executive(s). Notwithstanding the foregoing, no Plan amendment that reduces any
benefit payable under this Plan, and no Plan termination or suspension shall be
effective for a period beginning one year prior to a Change of Control and
ending one year after a Change of Control. In addition, no Eligible Executive
may be removed as a participant during such period with respect to any benefit
payable with respect to that Change of Control.

(c) Governing Law. The Plan shall be construed, administered, and enforced
according to the laws of the State of Texas, except to the extent such laws are
preempted by the federal laws of the United States of America.

10. Execution. To record the adoption of the Plan as set forth herein, effective
as of October 1, 2007, Cirrus Logic, Inc. has caused its duly authorized officer
to execute the same.

 Cirrus Logic, Inc.

     
By:
  /s/ Gregory S. Thomas
 
   
Name:
Title:
  Gregory S. Thomas
Vice President, General Counsel