EXHIBIT 10.2
 
Mindspeed Technologies, Inc.

 
Directors Stock Plan

as amended and restated
 

1.   PURPOSE OF THE PLAN.

 
The purpose of the Directors Stock Plan (as amended and restated, the Plan) is
to link the compensation of non-employee directors of Mindspeed Technologies,
Inc. (Mindspeed) directly with the interests of the Mindspeed shareholders.
 

2.   PARTICIPANTS.

 
Participants in the Plan shall consist of directors of Mindspeed who are not
employees of Mindspeed or any of its subsidiaries (Non-Employee Director). The
term “subsidiary” as used in the Plan means a corporation more than 50% of the
voting stock of which, or an unincorporated business entity more than 50% of the
equity interest in which, shall at the time be owned directly or indirectly by
Mindspeed.
 

3.   SHARES RESERVED UNDER THE PLAN.

 
Subject to the provisions of Section 10 of the Plan, there shall be reserved for
delivery under the Plan, from the date of inception of the Plan, an aggregate of
1,440,000 shares of common stock, par value $.01 per share, of Mindspeed
(Shares). Shares to be delivered under the Plan may be authorized and unissued
Shares, Shares held in treasury or any combination thereof. Shares delivered
under the Plan which are forfeited or otherwise terminated shall be available
for subsequent grant under the Plan.
 

4.   ADMINISTRATION OF THE PLAN.

 
The Plan shall be administered by the Compensation and Management Development
Committee (the Committee) of the Board, subject to the right of the Board, in
its sole discretion, to exercise or authorize another committee or person to
exercise some or all of the responsibilities, powers and authority vested in the
Committee under the Plan. The Committee (or the Board or any other committee or
person authorized by the Board) shall have authority to interpret the Plan, and
to prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, and all such interpretations, rules and regulations
shall be conclusive and binding on all persons.
 

5.   EFFECTIVE DATE OF THE PLAN.

 
The Plan has been approved by the Board and shall be submitted to Conexant
Systems, Inc. (Conexant), the sole shareholder of Mindspeed, for approval and,
if approved, shall become effective on the date on which Conexant completes the
pro rata distribution of all outstanding Shares to Conexant’s shareowners (the
Distribution).
 

6.   STOCK OPTIONS.

 
Each Non-Employee Director in office at the time of the Distribution shall be
granted, on the first trading day following the Distribution or on such later
date within 60 days thereafter as the Board may designate, an option to purchase
40,000 Shares. Each other Non-Employee Director shall be granted an option to
purchase 40,000 Shares at the meeting of the Board at which, or following the
Annual Meeting of Shareholders at which, the Non-Employee Director is first
elected a director of Mindspeed. Following the Annual Meeting of Shareholders
held in the year 2004 and each Annual Meeting of Shareholders thereafter, each
Non-Employee Director who is elected a director at, or who was previously
elected and continues as a director after, that Annual Meeting shall be granted
an option to purchase 20,000 Shares, provided that the Board may, by action
taken on or before the day following the date of any such Annual Meeting, defer
the option grants in respect of such Annual Meeting for up to 60 days following
such

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Annual Meeting to a date coinciding with the date of grant of options or other
incentive compensation by Mindspeed to some or all of the officers of Mindspeed.
 
The exercise price per share for each option granted under the Plan shall be the
closing price per share (the Fair Market Value) of Shares on the date of grant
as reported on the Nasdaq Stock Market or such other national securities
exchange or automated inter-dealer quotation system on which the Shares have
been duly listed and approved for quotation and trading (or on the next
preceding day such stock was traded if it was not traded on the date of grant).
The purchase price of the Shares with respect to which an option or portion
thereof is exercised shall be payable in full in cash, Shares valued at their
Fair Market Value on the date of exercise, or a combination thereof. Each option
may be exercised in whole or in part at any time after it becomes exercisable;
and each option shall become exercisable in four approximately equal
installments on each of the first, second, third and fourth anniversaries of the
date the option is granted. No option shall be exercisable prior to one year nor
after ten years from the date of the grant thereof; provided, however, that if
the holder of an option dies, the option may be exercised from and after the
date of the optionee’s death for a period of three years (or until the
expiration date specified in the option if earlier) even if it was not
exercisable at the date of death. Moreover, if an optionee retires after
attaining age 55 and completing at least five years service as a director, all
options then held by such optionee shall be exercisable even if they were not
exercisable at such retirement date; provided, however, that each such option
shall expire at the earlier of five years from the date of the optionee’s
retirement or the expiration date specified in the option.
 
Options granted under the Plan are not transferable other than (i) by will or by
the laws of descent and distribution; or (ii) by gift to the grantee’s spouse or
natural, adopted or step- children or grandchildren (Immediate Family Members)
or to a trust for the benefit of one or more of the grantee’s Immediate Family
Members or to a family charitable trust established by the grantee or a member
of the grantee’s family. If an optionee ceases to be a director while holding
unexercised options, such options are then void, except in the case of
(i) death, (ii) disability, (iii) retirement after attaining age 55 and
completing at least five years service as a director, or (iv) resignation from
the Board for reasons of the antitrust laws, compliance with Mindspeed’s
conflict of interest policies or other circumstances that the Committee may
determine as serving the best interests of Mindspeed.
 

7.   RESTRICTED SHARES.

 
Following the Annual Meeting of Shareholders held in the year 2007 and each
Annual Meeting of Shareholders thereafter, each Non-Employee Director who is
elected a director at, or who was previously elected and continues as a director
after, that Annual Meeting shall be granted restricted stock (Restricted Shares)
in an amount equal to the lesser of (a) 15,000 Restricted Shares or (b) the
number of Restricted Shares (rounded to the nearest whole share) equaling
$45,000 divided by the closing price of Shares on the date of grant as reported
on the Nasdaq Stock Market or such other national securities exchange or
automated inter-dealer quotation system on which the Shares have been duly
listed and approved for quotation and trading (or on the next preceding day such
stock was traded if it was not traded on the date of grant). The rights,
restrictions and other provisions applicable to Restricted Shares received
pursuant to Section 8 below shall also apply to Restricted Shares received
pursuant to this Section 7.
 

8.   SHARES IN LIEU OF CASH COMPENSATION.

 
Each Non-Employee Director may elect each year, not later than December 31 of
the year preceding the year as to which an election is to be applicable, to
receive all or any portion of the cash retainer to be paid for board, committee
or other service in the following calendar year through the issuance or transfer
of Shares, valued at the closing price as reported on the Nasdaq Stock Market or
such other national securities exchange or automated inter-dealer quotation
system on which the Shares have been duly listed and approved for quotation and
trading, on the date when each payment of such retainer amount would otherwise
be made in cash (or on the next preceding day such stock was traded if it was
not traded on that date). Each Non-Employee Director making such an election may
also elect at the same time to receive those Shares in the form of Restricted
Shares. Upon receipt of Shares, the recipient shall have all the rights of a
shareholder. Upon receipt of Restricted Shares, the recipient shall have the
right to vote the Shares and to receive dividends thereon, and the Restricted
Shares shall have all the attributes of outstanding Shares except that the
registered owner shall have no right to direct the transfer thereof. Restricted
Shares shall be held in book-entry accounts subject to the direction of
Mindspeed (or if Mindspeed elects,

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certificates therefor may be issued in the recipient’s name but delivered to and
held by Mindspeed) until ten days after (i) the recipient retires from the Board
after attaining age 55 and completing at least five years service as a director
or (ii) the recipient resigns from the Board or ceases to be a director by
reason of the antitrust laws, compliance with Mindspeed’s conflict of interest
policies, death, disability or other circumstances the Board determines not to
be adverse to the best interests of Mindspeed, when the restrictions on such
book-entry accounts shall be released (or any certificates issued shall be
delivered to the director), and such Shares shall cease to be Restricted Shares.
 

9.   ADDITIONAL COMPENSATION.

 
The Board or the Committee may, from time to time, as and when either thereof
deems it appropriate, provide one or more Non-Employee Directors with additional
compensation under the Plan. Such additional compensation may be in the form of
a grant of Shares, Restricted Shares, options to purchase Shares or a
combination thereof, subject to the terms, conditions and restrictions
established by the Board or the Committee at the time of grant.
 

10.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

 
If there shall be any change in or affecting Shares on account of any merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split or combination, or other distribution to holders of Shares
(other than a cash dividend), there shall be made or taken such amendments to
the Plan and such adjustments and actions thereunder as the Board may deem
appropriate under the circumstances.
 

11.   GOVERNMENT AND OTHER REGULATIONS.

 
The obligations of Mindspeed to deliver Shares upon exercise of options granted
under Section 6 of the Plan, pursuant to an election made under Section 8 of the
Plan or pursuant to a grant made under Section 9 of the Plan shall be subject to
(i) all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation,
compliance with the Securities Act of 1933, as amended, and (ii) the condition
that such Shares shall have been duly listed and approved for quotation and
trading on the Nasdaq Stock Market, or such other national securities exchange
or automated inter-dealer quotation system as shall be approved by the Board.
 

12.   AMENDMENT AND TERMINATION OF THE PLAN.

 
The Plan may be amended by the Board in any respect, provided that, without
shareholder approval, no amendment shall (i) materially increase the maximum
number of Shares available for delivery under the Plan (other than adjustments
pursuant to Section 10 hereof), (ii) materially increase the benefits accruing
to participants under the Plan, or (iii) materially modify the requirements as
to eligibility for participation in the Plan. The Plan may also be terminated at
any time by the Board.
 

13.   MISCELLANEOUS.

 
(a) If a Change of Control as defined in Article III, Section 14(I)(1) of
Mindspeed’s Bylaws shall occur, all options then outstanding pursuant to the
Plan shall forthwith become fully exercisable whether or not then exercisable
and the restrictions on all Shares granted as Restricted Stock under the Plan
shall forthwith lapse; provided, however, that each such option shall expire at
the earlier of five years from the date of the Change of Control or the
expiration date specified in the option.
 
(b) Nothing contained in the Plan shall be deemed to confer upon any person any
right to continue as a director of or to be associated in any other way with
Mindspeed.
 
(c) To the extent that Federal laws do not otherwise control, the Plan and all
determinations made and actions taken pursuant hereto shall be governed by the
law of the State of Delaware.

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