Exhibit 10.33
 
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Mindspeed Technologies, Inc.
Directors Stock Plan
Stock Option Agreement
Stock Option Terms and Conditions
 
1.  Definitions
 
Capitalized terms used and not defined herein shall have the respective meanings
assigned to such terms in the Plan. As used in these Stock Option Terms and
Conditions, the following words and phrases shall have the respective meanings
ascribed to them below unless the context in which any of them is used clearly
indicates a contrary meaning:
 
(a) FAST:  Fidelity’s automated service telephone system that is used to
facilitate stock option transactions.
 
(b) Fidelity:  Fidelity Stock Plan Services, the stock option administrator whom
Mindspeed has engaged to administer and process all stock option exercises.
 
(c) Grant Date:  The date of the grant of the Options.
 
(d) Grant Letter:  The letter from Mindspeed granting the stock option or stock
options to you.
 
(e) Mindspeed:  Mindspeed Technologies, Inc., a Delaware corporation.
 
(f) NASDAQ:  The Nasdaq Global Market.
 
(g) Options:  The stock option or stock options listed in the first paragraph of
the Grant Letter and which together with these Stock Option Terms and Conditions
constitutes the Stock Option Agreement.
 
(h) Option Shares:  The shares of Mindspeed Common Stock issuable or
transferable on exercise of the Options.
 
(i) Plan:  Mindspeed’s 2003 Directors Stock Plan, as such Plan may be amended
and in effect at the relevant time.
 
(j) Shares:  Shares of Mindspeed Common Stock.
 
(k) Stock Option Agreement:  These Stock Option Terms and Conditions together
with the Grant Letter to which they are attached.
 
(l) Web:  Fidelity’s website that is used to facilitate stock option
transactions.
 
2.  When Options May be Exercised
 
The Options may be exercised, in whole or in part (but only for a whole number
of shares) and at one time or from time to time, as follows:
 

             
Beginning
 
Ending
 
25% of the Option Shares
  1 Year from Grant Date   10 Years from Grant Date
25% of the Option Shares
  2 Years from Grant Date   10 Years from Grant Date
25% of the Option Shares
  3 Years from Grant Date   10 Years from Grant Date
25% of the Option Shares
  4 Years from Grant Date   10 Years from Grant Date

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All vesting increments are rounded to the nearest whole number of Option Shares
and vest only during the period indicated above, provided that:
 
(a) if you die while a Director of Mindspeed, your estate, or any person who
acquires the Options by bequest or inheritance, may exercise all the Options not
theretofore exercised within (and only within) the period beginning on your date
of death (even if you die before you have become entitled to exercise all or any
part of the Options) and ending three (3) years thereafter or ten (10) years
after the Grant Date, if earlier;
 
(b) if you retire as a Director at or after age fifty five (55) and completing
at least five (5) years of service as a Director, you (or if you die after your
retirement date, your estate or any person who acquires the Options by bequest
or inheritance) may thereafter exercise the Options not theretofore exercised
within (and only within) the period beginning on your retirement date (even if
you retire before you have become entitled to exercise all or any part of the
Options) and ending five (5) years thereafter or on ten (10) years after the
Grant Date, if earlier;
 
(c) if your service as a Director terminates as a result of your disability or
as a result of your resignation 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, you (or if
you die after termination of your service as a Director, your estate or any
person who acquires the Options by bequest or inheritance) may thereafter
exercise the Options not theretofore exercised that are exercisable on the date
your service as a Director terminates within (and only within) such period, if
any, after your termination date as the Committee may determine by action taken
not more than sixty (60) days after your termination date, which period shall in
no event end more than five years after your termination date or on ten
(10) years from the Grant Date, if earlier;
 
(d) in the event a Change of Control shall occur, then all the Options shall
forthwith become fully exercisable whether or not otherwise then exercisable;
provided, however, that each such Option shall expire at the earlier of five
(5) years from the date of the Change of Control or the expiration date
specified in the Option; and
 
(e) if your service as a Director terminates for any other reason, the Options
shall terminate forthwith on the date of termination of your service as a
Director and shall not be exercised thereafter.
 
3.  Exercise Procedure
 
(a) To exercise all or any part of the Options, you (or after your death, your
estate or any person who has acquired the Options by bequest or inheritance)
must:
 
(i) contact the administrator, Fidelity, by using the FAST or Web system or by
speaking to a Fidelity customer service representative and follow the
instructions provided;
 
(ii) confirm the Option transaction by receiving a confirmation number through
the FAST or Web system or by speaking to a Fidelity customer service
representative;
 
(iii) submit full payment of the exercise price for the Option Shares to be
purchased on exercise of the Options:
 

  •  by check or cash; or     •  in Shares; or     •  in a combination of check
or cash and Shares; and

 
(iv) provide, in the case of an exercise of the Options by any person other than
you seeking to exercise the Options, such documents as Fidelity or the Secretary
of Mindspeed shall require to establish to their satisfaction that the person
seeking to exercise the Options is entitled to do so.

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(b) An exercise of the whole or any part of the Options shall be effective:
 
(i) if you elect (or after your death, the person entitled to exercise the
Options elects) to pay the exercise price for the Option Shares entirely by
check or cash, (i) upon confirmation of your transaction by using the FAST or
Web system or by speaking to a Fidelity customer service representative and full
payment of the exercise price and withholding taxes (if applicable) are received
by Fidelity within three (3) business days following the confirmation; and
(ii) receipt of any documents required pursuant to Section 3(a)(iv); and
 
(ii) if you elect (or after your death, the person entitled to exercise the
Options elects) to pay the exercise price of the Option Shares in Shares or in a
combination of Shares and check or cash, (i) upon confirmation of your
transaction by using the FAST or Web system or by speaking to a Fidelity
customer service representative and full payment of the exercise price (as
defined in Section 3(d)(i)) and withholding taxes (if applicable) are received
by Fidelity within three (3) business days following the confirmation; and
(ii) receipt of any documents required pursuant to Section 3(a)(iv).
 
(c) If you choose (or after your death, the person entitled to exercise the
Options chooses) to pay the exercise price for the Option Shares to be purchased
on exercise of any of the Options entirely by check or cash, payment must be
made by:
 

  •  delivering to Fidelity a check or cash in the full amount of the exercise
price for those Option Shares; or     •  arranging with a stockbroker, bank or
other financial institution to deliver to Fidelity full payment, by check, cash
or (if prior arrangements are made with Fidelity) by wire transfer, of the
exercise price of those Option Shares.

 
In either event, in accordance with Section 3(e), full payment of the exercise
price for the Option Shares purchased must be made within three (3) business
days after the exercise has been conducted and confirmed through the FAST or Web
system or by speaking to a Fidelity customer service representative.
 
(d) (i) If you choose (or after your death, the person entitled to exercise the
Options chooses) to use already-owned Shares to pay all or part of the exercise
price for the Option Shares to be purchased on exercise of any of the Options,
you (or after your death, the person entitled to exercise the Options) must
deliver to Fidelity one or more certificates (and executed stock powers), or
authorize the book-entry transfer to Mindspeed of Shares, representing:
 

  •  at least the number of Shares whose value, based on the closing price of
the Shares on the NASDAQ reporting system on the day you have exercised your
Options through the FAST or Web system or by speaking to a Fidelity customer
service representative, equals the exercise price for those Option Shares; or  
  •  any lesser number of Shares you desire (or after your death, the person
entitled to exercise the Options desires) to use to pay the exercise price for
those Option Shares and a check or cash in the amount of such exercise price
less the value of the Shares delivered, based on the closing price of the Shares
on the NASDAQ reporting system on the day you have exercised your Options
through the FAST or Web system or by speaking to a Fidelity customer service
representative.

 
In the event you are using Shares acquired from a Mindspeed benefit plan,
including but not limited to a stock option plan, restricted stock plan,
performance share plan and employee stock purchase plan, these Shares must have
been held for a minimum of six (6) months from the date of acquisition. You will
be required to provide proper documentation attesting to the fact that the
Shares used to pay all or part of the exercise price for the Option Shares are
mature Shares. In the event you are using Shares purchased on the open market,
there is no required holding period.
 
(ii) Fidelity will advise you (or any other person who, being entitled to do so,
exercises the Options) of the exact number of Shares, valued in accordance with
Section 4 of the Plan at the closing price on the NASDAQ reporting system on the
effective date of exercise under Section 3(a)(ii), and any funds required to pay
in full the exercise price for the Option Shares purchased. In accordance with
Section 3(e), you (or such other person) must pay, by check or cash, in Shares
or in a combination of check or cash and Shares, any balance required to pay in
full

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the exercise price of the Option Shares purchased within three (3) business days
following the confirmation date of such exercise of the Options under
Section 3(a)(ii).
 
(iii) Notwithstanding any other provision of this Stock Option Agreement, the
Secretary of Mindspeed may limit the number, frequency or volume of successive
exercises of any of the Options in which payment is made, in whole or in part,
by delivery of Shares pursuant to this subparagraph (d) to prevent unreasonable
pyramiding of such exercises.
 
(e) An exercise conducted and confirmed through the FAST or Web system or by
speaking to a Fidelity customer service representative, whether or not full
payment of the exercise price for the Option Shares is received by Fidelity,
shall constitute a binding contractual obligation by you (or the other person
entitled to exercise the Options) to proceed with and complete that exercise of
the Options (but only so long as you continue, or the other person entitled to
exercise the Options continues, to be entitled to exercise the Options on that
date). By your acceptance of this Stock Option Agreement, you agree (for
yourself and on behalf of any other person who becomes entitled to exercise the
Options) to deliver or cause to be delivered to Fidelity any balance of the
exercise price for the Option Shares to be purchased upon the exercise pursuant
to the transaction conducted through the FAST or Web system or by speaking to a
Fidelity customer service representative required to pay in full the exercise
price for those Option Shares, that payment being by check, cash, wire transfer,
in Shares or in a combination of check or cash and Shares, on or before the
later of the third (3rd) business day after the date on which you confirm the
transaction through the FAST or Web system or by speaking to a Fidelity customer
service representative. If such payment is not made, you (for yourself and on
behalf of any other person who becomes entitled to exercise the Options)
authorize Mindspeed, in its discretion, to set off against salary payments or
other amounts due or which may become due you (or the other person entitled to
exercise the Options) any balance of the exercise price for those Option Shares
remaining unpaid thereafter.
 
(f) A book-entry statement representing the number of Option Shares purchased
will be issued as soon as practicable (i) after Fidelity has received full
payment therefor or (ii) at Mindspeed’s or Fidelity’s election in their sole
discretion, after Mindspeed or Fidelity has received (x) full payment of the
exercise price of those Option Shares and (y) any reimbursement in respect of
withholding taxes due pursuant to Section 5.
 
4.  Transferability
 
You are not entitled to transfer the Options except: (i) by will or by the laws
of descent and distribution; or (ii) by gift to any member of your immediate
family or to a trust for the benefit of one or more members of your immediate
family or to a family charitable trust established by you or one of your
immediate family members; provided, however, that no transfer pursuant to this
clause (ii) shall be effective unless you have notified Mindspeed’s Office of
the Secretary (Attention: Stock Administration) in writing specifying the Option
or Options transferred, the date of the gift and the name and Social Security or
other Taxpayer Identification Number of the transferee. During your lifetime,
only you are entitled to exercise the Options unless you have transferred any
Option in accordance with this paragraph to a member of your immediate family, a
trust for the benefit of one or more members of your immediate family or to a
family charitable trust established by you or one of your immediate family
members, in which case only that transferee (or the legal representative of the
estate or the heirs or legatees of that transferee) shall be entitled to
exercise that Option. For purposes of this paragraph, your “immediate family”
shall mean your spouse and natural, adopted or step-children and grandchildren.
 
5.  Withholding
 
Mindspeed or Fidelity shall have the right, in connection with the exercise of
the Options in whole or in part, to deduct from any payment to be made by
Mindspeed or Fidelity under the Plan an amount equal to the taxes required to be
withheld by law with respect to such exercise or to require you (or any other
person entitled to exercise the Options) to pay to it an amount sufficient to
provide for any such taxes so required to be withheld. By your acceptance of
this Stock Option Agreement, you agree (for yourself and on behalf of any other
person who becomes entitled to exercise the Options) that if Mindspeed or
Fidelity elects to require you (or such other person) to remit an

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amount sufficient to pay such withholding taxes, you (or such other person) must
remit that amount within three (3) business days after the confirmation of the
Option exercise (Section 3(a)(ii)). If such payment is not made, Mindspeed, in
its discretion, shall have the same right of set-off with respect to payment of
the withholding taxes in connection with the exercise of the Option as provided
under Section 3(e) with respect to payment of the exercise price.
 
6.  Rights as Shareowner
 
You will not have any rights as a shareowner with respect to any Option Shares
unless and until you become the holder of such Option Shares on the books and
records of Mindspeed. No dividends or dividend equivalents will be paid by
Mindspeed with respect to the Option Shares.
 
7.  Headings
 
The section headings contained in these Stock Option Terms and Conditions are
solely for the purpose of reference, are not part of the agreement of the
parties and shall in no way affect the meaning or interpretation of this Stock
Option Agreement.
 
8.  References
 
All references in these Stock Option Terms and Conditions to Sections,
paragraphs, subparagraphs or clauses shall be deemed to be references to
Sections, paragraphs, subparagraphs and clauses of these Stock Option Terms and
Conditions unless otherwise specifically provided.
 
9.  Entire Agreement
 
This Stock Option Agreement and the Plan embody the entire agreement and
understanding between Mindspeed and you with respect to the Options, and there
are no representations, promises, covenants, agreements or understandings with
respect to the Options other than those expressly set forth in this Stock Option
Agreement and the Plan.
 
10.  Applicable Laws and Regulations
 
This Stock Option Agreement and Mindspeed’s obligation to issue Option Shares
hereunder are governed by the laws of Delaware and the Federal law of the United
States.

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