EXHIBIT 10.6

MICROSEMI CASH BONUS PLAN

SECTION 1

PURPOSE OF THE PLAN

The Microsemi Cash Bonus Plan (“Plan”) is intended to increase stockholder value
and the success of Microsemi Corporation (“Company”) by motivating Plan
Participants to perform to the best of their abilities and to achieve the
Company’s objectives. The Plan’s goals are to be achieved by providing Plan
Participants with incentive Awards based on the achievement of goals relating to
the performance of the Company and individualized goals relating to the Plan
Participant’s performance. Another purpose of the Plan is to foster the
Company’s retention of Plan Participants as employees.

SECTION 2

SUBPLANS; PARTICIPANTS

Insofar as the Committee will be responsible for establishing performance goals
and conditions under this Plan for each Performance Period for each employee of
the Company and its subsidiaries, and because different goals and conditions may
be appropriate for different groups of employees for purposes of the Plan, the
Committee shall annually establish one or more subplans, each together with this
Plan constituting, effective on its own effective date, a separate cash
compensation plan (each a “Subplan” or collectively “Subplans”). Except as the
Committee may by rule or specifically provide otherwise, each Plan Participant
shall participate in only one Subplan during a Performance Period, and each
Subplan during a Performance Period shall have different Plan Participants. For
each Subplan, the Committee shall select or define the criteria to select the
Plan Participants from among persons who are actively employed by the Company
during the Performance Period. Participation in the Plan or a Subplan during one
Performance Period does not guarantee a Plan Participant the ability to
participate in the Plan or the Subplan in any future Performance Periods.

SECTION 3

THE BONUS POOL

3.1    Conditions to the Company’s Obligation to Fund the Bonus Pool. The
Company shall not have any obligation in any event whatsoever to fund the Bonus
Pool unless all of the following conditions shall have been satisfied: (i) the
Company shall have attained its Operating Margin Minimum for the Performance
Period; and (ii) the Company shall have satisfied any such additional conditions
as the Committee may in its discretion impose upon Bonus Pool funding in respect
to this Plan or a Subplan.

3.2    Bonus Pool Formulae and Calculations. The amount of the Bonus Pool of
each Subplan shall be determined by the Committee in its sole and absolute
discretion after the end of each Performance Period. The Committee’s
determination shall be final and binding.

 

Effective: March 29, 2007    Last Update: 03/29/2007 Cash Bonus Plan   

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3.3    Committee Determinations Binding. The determination of whether the
Company’s relevant Reported Non-GAAP Financial Measures or other measures of
performance shall have satisfied the conditions to funding a Bonus Pool shall be
made by the Committee in each instance in its sole discretion. The Committee
shall base its determinations upon its own good faith interpretations insofar as
applicable and shall be entitled also to rely upon any advice of professionals,
experts, officers and other sources of information of its choice believed
reliable. The Committee’s determinations shall always be final and binding on
all Plan Participants.

3.4    Adjustments for Acquisitions or Changes in Fiscal Year. If the Company
makes any Acquisition or if any change of the Company’s fiscal year (“Change”)
occurs during a Performance Period, the Committee may, in its sole and absolute
discretion, determine whether (i) to adjust the Performance Goals and financial
measures described in the Subplans under this Plan to take into account the
effects of Acquisitions or Changes on the Operating Income or the Operating
Margin or any other relevant factor, (ii) to substitute different terms as the
Committee deems appropriate in its sole and absolute discretion, or (iii) to
make no changes.

SECTION 4

DETERMINATION OF AWARDS

4.1    Performance Evaluations. All Plan Participants shall be subject to
individual Performance Evaluations.

4.2    Award Amounts. A Plan Participant’s Award shall take into account, among
other things, (a) the amount of the Bonus Pool of the relevant Subplan, taking
into account and subject to all limitations and conditions of this Plan and the
Subplan, and (b) the Plan Participant’s Performance Evaluation. All limitations
and conditions to funding of the Bonus Pool of any Subplan will also directly
and similarly affect the Awards of all Plan Participants in the Subplan. Also as
provided more specifically in each Subplan, based on a Plan Participant’s
Performance Evaluation, the Committee may make or ratify and approve an
adjustment affecting a Plan Participant’s Award upward or downward by a factor
in the range of from zero (0) to two (2) times. Under no circumstances will the
sum of all Awards for a Subplan in any Performance Period exceed the Bonus Pool
for that Subplan in that Performance Period, and therefore when some Plan
Participants receive adjustments increasing their Awards, the other Plan
Participants must receive less unless the Bonus Pool were to increase.

4.3    Changes in Control. Upon a Change in Control, Awards shall vest and
become payable immediately prior to the Change in Control, all on terms the
Committee may deem appropriate for the purpose of providing an Award for the
partial Performance Period ending on the day before the Change in Control, on
such terms and subject to such provisions as deemed appropriate by the Committee
in its sole and absolute discretion. In addition, all conditions to the
Company’s obligation of funding the Bonus Pool shall be deemed satisfied upon a
Change in Control. The requirement of a Plan Participant’s continuing service to
the date of the Change in Control shall continue to be a condition to earning an
Award, except as and to the extent the Committee may otherwise specifically
determine. In all events, any Award that becomes payable under this Section 4.3
shall be paid not later than five (5) business days after the Change in Control.

 

Effective: March 29, 2007

   Last Update: 03/29/2007

Cash Bonus Plan

  

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4.4    Payment in the Event of Death or Disability. In the event a Plan
Participant’s employment by the Company terminates after the Performance Period
and before the date for payment of Awards in the normal course due to the Plan
Participant’s death or permanent disability, the Plan Participant’s Award, if
any, shall be paid in the normal course as provided in Section 5.2; provided,
however the Committee may for humanitarian reasons determine in its sole
discretion to agree with the Plan Participants or their future personal
representatives, on terms the Committee deems appropriate in the particular
instance, to pay or settle an Award before the normal date for Award payments.
The Committee shall have sole and absolute discretion in any particular
circumstance to pay an Award to a Plan Participant whose employment by the
Company terminates during the Performance Period due to the Plan Participant’s
death or permanent disability, provided that such payment shall be made within
the time period prescribed in Section 5.2.

SECTION 5

PAYOUT OF AWARDS

5.1    Employment Requirement. A Plan Participant must be employed by the
Company at the time the Awards are paid in the ordinary course under the
relevant Subplan under this Plan in order to be entitled to receive payment of
an Award, except as otherwise specifically provided in Section 4.4. The
Committee may waive this employment condition in its sole and absolute
discretion in any instance and from time to time.

5.2    Timing of Bonus Payouts. Awards will be paid to Plan Participants through
normal payroll or otherwise as soon as reasonably practicable after the Reported
Non-GAAP Financial Measures for the Performance Period shall have been publicly
released, provided that, in no event shall an Award be paid later than 2.5
months following the end of the fiscal year in which the applicable Performance
Period ends.

5.3    Withholding of Taxes. The Company will have the right to deduct from any
Award any foreign, federal, state or local taxes required by law to be withheld.

 

Effective: March 29, 2007

   Last Update: 03/29/2007

Cash Bonus Plan

  

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SECTION 6

ADDITIONAL TERMS

6.1    Plan Administration. The Committee will have the authority to administer
and interpret the Plan, and approve or determine the amounts to be distributed
under the Plan as Awards. Any interpretation or construction of the Plan or
approval or determination of Awards by the Committee will be final and binding
on all Plan Participants and their personal representatives. No member of the
Board or any of its affiliates, or any committee of the Board or any affiliate,
will be liable for any action or determination made in good faith regarding the
Plan or any Award.

6.2    No Right to Employment. The Plan does not give any Plan Participant any
right to continued employment, or limit in any way the right of the Company or
any affiliated company to terminate his or her employment at any time.

6.3    Amendment of the Plan. The Plan may be amended from time to time by the
Committee, without the consent of any Plan Participant, other employee or past
employee, for each of the following reasons or any combination thereof: (i) to
the extent required to comply with applicable law; (ii) to make reasonable
adjustments for any acquisition or sale of a business, merger, reorganization,
or restructuring, change in accounting principles or their application, or
special charges or extraordinary items, that materially affect the Company or
any of its consolidated subsidiaries; or (iii) to make any changes that do not
materially and adversely affect the Award payable to any eligible Plan
Participant.

6.4    Governing Law. The validity, construction and interpretation of the Plan
will be determined in accordance with the laws of the State of Delaware.

6.5    Construction. The Plan is intended to comply with Section 409A of the
Code (including the Treasury regulations and other published guidance relating
thereto) so as not to subject any Plan Participant to payment of any additional
tax, penalty or interest imposed under Code Section 409A. The provisions of the
Plan shall be construed and interpreted to avoid the imputation of any such
additional tax, penalty or interest under Code Section 409A yet preserve (to the
nearest extent reasonably possible) the intended benefit payable to the Plan
Participant.

6.6    Effective Date. This Plan is adopted on and has an effective date of
March 29, 2007. For each Subplan in each Performance Period, there shall also be
an effective date upon which the Committee shall approve the Subplan.

SECTION 7

DEFINITIONS

7.1    “Acquisition” shall mean any acquisition by the Company that would
materially change the Company’s Operating Income, operating margin, or
Performance Goals as determined by the Committee in its sole discretion.

7.2    “Award” shall mean a cash Award made to a Plan Participant under the
Plan.

7.3    “Board” shall mean the Board of Directors of the Company.

7.4    “Bonus Pool” shall mean the total amount of funds finally designated by
the Committee for distribution under a Subplan of the Plan for a Performance
Period.

 

Effective: March 29, 2007

   Last Update: 03/29/2007

Cash Bonus Plan

  

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7.5    “Change in Control” shall mean each occurrence of any of the following
events in one or a series of transactions: (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the total voting power represented by all of
the Company’s then outstanding voting securities; or (ii) consummation of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) a majority of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or (iii) the stockholders of the Company approving
a plan of complete liquidation of the Company; or (iv) a consummation of the
sale or disposition by the Company of all or substantially all of the Company’s
assets.

7.6    “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

7.7    “Committee” shall mean the Board or the Company’s Compensation Committee
or any other committee appointed by the Board to administer the Plan.

7.8    “Company” shall mean Microsemi Corporation, a Delaware corporation, or
any successors or assigns, and shall include all subsidiaries.

7.9    “Operating Income” shall mean the non-GAAP operating income of the
Company for the Performance Period based on the Reported Non-GAAP Financial
Measures.

7.10    “Operating Margin Minimum” shall mean the minimum Operating Margin
(based on the Reported Non-GAAP Financial Measures) which is set by the
Committee for the Performance Period for the Subplan. The Operating Margin
Minimum must be achieved or exceeded in order for there to be any payout
whatsoever of Awards under the Plan.

7.11    “Performance Evaluations” shall mean those Performance Evaluations
referred to in Section 4.1 and further described in each Subplan.

7.12    “Performance Goals” shall be established by the Committee and set forth
in each Subplan. These Performance Goals may include, but may not be limited to,
goals for (i) net income (loss) (either before or after interest, taxes,
depreciation and/or amortization), (ii) sales or revenue, (iii) acquisitions or
strategic transactions, (iv) operating income (loss), (v) cash flow (including,
without limitation, operating cash flow and free cash flow), (vi) return on
capital, (vii) return on assets (including, without limitation, return on net
assets), (viii) return on stockholders’ equity, (ix) economic value added,
(x) stockholder returns, (xi) return on sales, (xii) gross or net profit margin,
(xiii) productivity, (xiv) expenses, (xv) margins, (xvi) operating efficiency,
(xvii) customer satisfaction, (xviii) working capital, (xix) earnings (loss) per
share, (xx) price per share of equity securities, (xxi) market share and
(xxii) number of customers, any of which may be measured either in absolute
terms, on a GAAP or non-GAAP basis, as compared to any previous results or with
respect to any incremental increase or decrease, or as compared to results of
any peer group determined in the Committee’s sole discretion.

 

Effective: March 29, 2007

   Last Update: 03/29/2007

Cash Bonus Plan

  

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7.13    “Performance Period” shall mean the Company’s fiscal year (or other
relevant period) as referred to in the respective Subplan.

7.14    “Plan Participant” shall mean an employee of the Company or a direct or
indirect subsidiary who is selected by the Committee to participate in a Subplan
of the Plan for a Performance Period.

7.15    “Reported Non-GAAP Financial Measures” shall mean the non-GAAP financial
measures, as they may be amended from time to time, that the Company publicly
releases and furnishes to the Securities and Exchange Commission most closely
corresponding to the measures referred to in this Plan or a Subplan.

 

Effective: March 29, 2007

   Last Update: 03/29/2007

Cash Bonus Plan