EXHIBIT 10.6

 

MINDSPEED TECHNOLOGIES, INC.

 

2003 LONG-TERM INCENTIVES PLAN,

AS AMENDED AND RESTATED

AS OF JULY 1, 2008

 

SECTION 1:         PURPOSE

 

The purpose of the Mindspeed Technologies, Inc. 2003 Long-Term Incentives Plan
(as amended and restated, the “Plan”) is to provide incentive compensation to
officers, executives and other employees, and prospective employees, contractors
and consultants of the Company and its Subsidiaries; to attract and retain
individuals of outstanding ability; and to align the interests of such persons
with the interests of the Company’s shareholders.

 

SECTION 2:         DEFINITIONS

 

The following terms, as used herein, shall have the meaning specified:

 

“Award” means an award granted pursuant to Section 4.

 

“Award Agreement” means a letter to a Participant, together with the terms and
conditions applicable to an Award granted to the Participant, issued by the
Company, as described in Section 6.

 

“Board of Directors” means the Board of Directors of the Company as it may be
comprised from time to time.

 

“Code” means the Internal Revenue Code of 1986, and any successor statute, as it
or they may be amended from time to time.

 

“Committee” means the Compensation and Management Development Committee of the
Board of Directors as it may be comprised from time to time or another committee
of the Board of Directors designated by the Board of Directors to administer the
Plan.

 

“Company” means Mindspeed Technologies, Inc., a Delaware corporation, and any
successor corporation.

 

“Conexant” means Conexant Systems, Inc., a Delaware corporation, and any
successor corporation.

 

“Employee” means, subject to the exclusions set forth below, an individual who
was hired (and advised that he or she was being hired) directly by the Company
or a Subsidiary as a regular employee and who at the time of grant of an Award
performs regular employment services directly for the Company or a Subsidiary,
but shall not include (a) members of the Board of Directors who are not also
employees of the Company or a Subsidiary or (b) any individuals who

 

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work, or who were hired to work, or who were advised that they work:  (i) as
independent contractors or employees of independent contractors; (ii) as
temporary employees, regardless of the length of time that they work at the
Company or a Subsidiary; (iii) through a temporary employment agency, job
placement agency, or other third party; or (iv) as part of an employee leasing
arrangement between the Company or a Subsidiary and any third party.  For the
purposes of the Plan, the exclusions described above shall remain in effect even
if the described individual could otherwise be construed as an employee under
any applicable common law.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange Act” means the Securities Exchange Act of 1934, and any successor
statute, as it may be amended from time to time.

 

“Executive Officer” means an Employee who is an executive officer of the Company
as defined in Rule 3b-7 under the Exchange Act (or any successor provision).

 

“Fair Market Value” means the closing sale price of the Stock as reported on the
Nasdaq Stock Market or such other national securities exchange or automated
inter-dealer quotation system on which the Stock has been duly listed and
approved for quotation and trading on the relevant date, or if no sale of the
Stock is reported for such date, the next preceding day for which there is a
reported sale.

 

“Incentive Stock Option” means an option to purchase Stock that is granted
pursuant to Section 4(b) or pursuant to any other plan of the Company or a
Subsidiary that complies with Code Section 422.

 

“Mindspeed Distribution Date” means the date on which Conexant completes the pro
rata distribution of all outstanding Stock to Conexant shareowners.

 

“Non-Employee” means an individual who at the time of grant of an Award (a) has
been extended an offer of employment with the Company or a Subsidiary but who
has not yet accepted the offer and become an Employee, or (b) performs
consulting, contracting or other services for the Company or a Subsidiary other
than in a capacity as an Employee or who has been extended an offer to perform
consulting, contracting or other services for the Company or a Subsidiary, but
shall not include members of the Board of Directors.

 

“Non-Qualified Stock Option” shall have the meaning set forth in Section 4(a).

 

“Participant” means any Employee or Non-Employee who has been granted an Award
pursuant to the Plan.

 

“Restricted Stock” shall have the meaning set forth in Section 4(c).

 

“Restricted Stock Units” shall have the meaning set forth in Section 4(f).

 

“SARs” shall have the meaning set forth in Section 4(e).

 

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“Stock” means shares of common stock, par value $.01 per share, of the Company,
or any security of the Company issued in substitution, exchange or lieu thereof.

 

“Subsidiary” means any corporation or other entity in which the Company,
directly or indirectly, controls 50% or more of the total combined voting power
of such corporation or other entity.

 

“Ten-Percent Shareholder” means any person who owns, directly or indirectly, on
the relevant date, securities having ten percent (10%) or more of the combined
voting power of all classes of the Company’s securities or of its parent or
subsidiaries.  For purposes of applying the foregoing ten percent (10%)
limitation, the rules of Code Section 424(d) shall apply.

 

“Unrestricted Stock” shall have the meaning set forth in Section 4(d).

 

SECTION 3:         ELIGIBILITY

 

Persons eligible for Awards shall consist of Employees and Non-Employees whose
performance or potential contribution, in the judgment of the Committee, will
benefit the future success of the Company and/or a Subsidiary.  Notwithstanding
the foregoing, only Employees will be eligible for Awards of Incentive Stock
Options, Restricted Stock, Restricted Stock Units and/or Unrestricted Stock
under the Plan and only Employees who are foreign nationals or employed outside
the United States will be eligible for Awards of SARs under the Plan.

 

SECTION 4:         AWARDS

 

The Committee may grant any of the following types of Awards, either singly, in
tandem or in combination with other types of Awards, as the Committee may in its
sole discretion determine:

 

A.             NON-QUALIFIED STOCK OPTIONS.  A “NON-QUALIFIED STOCK OPTION” IS
AN AWARD TO AN EMPLOYEE OR NON-EMPLOYEE IN THE FORM OF AN OPTION TO PURCHASE A
SPECIFIC NUMBER OF SHARES OF STOCK EXERCISABLE AT SUCH TIME OR TIMES, AND DURING
SUCH SPECIFIED TIME NOT TO EXCEED TEN (10) YEARS, AS THE COMMITTEE MAY
DETERMINE, AT A PRICE NOT LESS THAN 100% OF THE FAIR MARKET VALUE OF THE STOCK
ON THE DATE THE OPTION IS GRANTED.

 

(I)            THE PURCHASE PRICE OF THE STOCK SUBJECT TO THE OPTION MAY BE PAID
IN CASH. AT THE DISCRETION OF THE COMMITTEE, THE PURCHASE PRICE MAY ALSO BE PAID
BY THE TENDER OF STOCK (THE VALUE OF SUCH STOCK SHALL BE ITS FAIR MARKET VALUE
ON THE DATE OF EXERCISE), OR THROUGH A COMBINATION OF STOCK AND CASH, OR THROUGH
SUCH OTHER MEANS AS THE COMMITTEE DETERMINES ARE CONSISTENT WITH THE PLAN’S
PURPOSE AND APPLICABLE LAW.  NO FRACTIONAL SHARES OF STOCK WILL BE ISSUED OR
ACCEPTED.

 

(II)           WITHOUT LIMITING THE FOREGOING, THE COMMITTEE MAY PERMIT
PARTICIPANTS, EITHER ON A SELECTIVE OR AGGREGATE BASIS, TO SIMULTANEOUSLY
EXERCISE OPTIONS AND SELL THE SHARES OF STOCK THEREBY ACQUIRED, PURSUANT TO A
BROKERAGE OR SIMILAR ARRANGEMENT APPROVED IN ADVANCE BY THE COMMITTEE, AND USE
THE PROCEEDS FROM SUCH SALE AS PAYMENT OF THE PURCHASE PRICE OF SUCH STOCK AND
ANY APPLICABLE WITHHOLDING TAXES.

 

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B.             INCENTIVE STOCK OPTIONS.  AN INCENTIVE STOCK OPTION IS AN AWARD
TO AN EMPLOYEE IN THE FORM OF AN OPTION TO PURCHASE A SPECIFIED NUMBER OF SHARES
OF STOCK THAT COMPLIES WITH THE REQUIREMENTS OF CODE SECTION 422, WHICH OPTION
SHALL, SUBJECT TO THE FOLLOWING PROVISIONS, BE EXERCISABLE AT SUCH TIME OR
TIMES, AND DURING SUCH SPECIFIED TIME, AS THE COMMITTEE MAY DETERMINE.

 

(I)            THE AGGREGATE FAIR MARKET VALUE (DETERMINED AT THE TIME OF THE
GRANT OF THE AWARD) OF THE SHARES OF STOCK SUBJECT TO INCENTIVE STOCK OPTIONS
WHICH ARE EXERCISABLE BY ONE PERSON FOR THE FIRST TIME DURING A PARTICULAR
CALENDAR YEAR SHALL NOT EXCEED $100,000.

 

(II)           NO INCENTIVE STOCK OPTION MAY BE GRANTED UNDER THE PLAN AFTER
JUNE 27, 2013.

 

(III)          NO INCENTIVE STOCK OPTION MAY BE EXERCISABLE MORE THAN:

 

(A)          IN THE CASE OF AN EMPLOYEE WHO IS NOT A TEN-PERCENT SHAREHOLDER ON
THE DATE THE OPTION IS GRANTED, TEN (10) YEARS AFTER THE DATE THE OPTION IS
GRANTED, AND

 

(B)           IN THE CASE OF AN EMPLOYEE WHO IS A TEN-PERCENT SHAREHOLDER ON THE
DATE THE OPTION IS GRANTED, FIVE (5) YEARS AFTER THE DATE THE OPTION IS GRANTED.

 

(IV)          THE EXERCISE PRICE OF ANY INCENTIVE STOCK OPTION SHALL NOT BE LESS
THAN:

 

(A)          IN THE CASE OF AN EMPLOYEE WHO IS NOT A TEN-PERCENT SHAREHOLDER ON
THE DATE THE OPTION IS GRANTED, THE FAIR MARKET VALUE OF THE STOCK SUBJECT TO
THE OPTION ON SUCH DATE; AND

 

(B)           IN THE CASE OF AN EMPLOYEE WHO IS A TEN-PERCENT SHAREHOLDER ON THE
DATE THE OPTION IS GRANTED, 110% OF THE FAIR MARKET VALUE OF THE STOCK SUBJECT
TO THE OPTION ON SUCH DATE.

 

(V)           THE COMMITTEE MAY PROVIDE THAT THE EXERCISE PRICE OF AN INCENTIVE
STOCK OPTION MAY BE PAID BY ONE OR MORE OF THE METHODS AVAILABLE FOR PAYING THE
EXERCISE PRICE OF A NON-QUALIFIED STOCK OPTION.

 

C.             RESTRICTED STOCK.  RESTRICTED STOCK IS AN AWARD OF STOCK THAT IS
ISSUED TO AN EMPLOYEE SUBJECT TO RESTRICTIONS ON TRANSFER AND SUCH OTHER
RESTRICTIONS ON INCIDENTS OF OWNERSHIP AS THE COMMITTEE MAY DETERMINE.  SUBJECT
TO SUCH RESTRICTIONS, A PARTICIPANT AS OWNER OF SHARES OF RESTRICTED STOCK SHALL
HAVE THE RIGHTS OF A HOLDER OF SHARES OF STOCK, EXCEPT THAT THE COMMITTEE MAY
PROVIDE AT THE TIME OF THE AWARD THAT ANY DIVIDENDS OR OTHER DISTRIBUTIONS PAID
ON THE RESTRICTED STOCK WHILE SUBJECT TO SUCH RESTRICTIONS SHALL BE ACCUMULATED
OR REINVESTED IN STOCK AND HELD SUBJECT TO THE SAME RESTRICTIONS AS THE
RESTRICTED STOCK AND SUCH OTHER TERMS AND CONDITIONS AS THE COMMITTEE SHALL
DETERMINE.  SHARES OF RESTRICTED STOCK SHALL BE REGISTERED IN THE NAME OF THE
PARTICIPANT AND, AT THE COMPANY’S SOLE DISCRETION, (I) SHALL BE HELD IN
BOOK-ENTRY FORM SUBJECT TO THE COMPANY’S INSTRUCTIONS UNTIL THE RESTRICTIONS
RELATING THERETO LAPSE, OR (II) SHALL BE EVIDENCED BY A CERTIFICATE, WHICH SHALL
BEAR AN APPROPRIATE RESTRICTIVE LEGEND, SHALL BE SUBJECT TO APPROPRIATE
STOP-TRANSFER ORDERS AND SHALL BE HELD IN CUSTODY BY THE COMPANY UNTIL THE
RESTRICTIONS RELATING THERETO LAPSE, AND THE PARTICIPANT SHALL DELIVER TO THE
COMPANY A STOCK POWER ENDORSED IN BLANK RELATING TO THE RESTRICTED STOCK.

 

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D.             UNRESTRICTED STOCK.  UNRESTRICTED STOCK IS AN AWARD OF STOCK THAT
IS ISSUED TO AN EMPLOYEE WITHOUT ANY RESTRICTIONS, AS THE COMMITTEE IN ITS SOLE
DISCRETION SHALL DETERMINE, INCLUDING THE ISSUANCE OF UNRESTRICTED STOCK
PURSUANT TO AWARDS CONDITIONED UPON THE ACHIEVEMENT OF PERFORMANCE OR OTHER
VESTING REQUIREMENTS (AS MAY BE ESTABLISHED BY THE COMMITTEE) PRIOR TO THE
DELIVERY OF SUCH UNRESTRICTED STOCK.  A PARTICIPANT SHALL NOT BE REQUIRED TO
MAKE ANY PAYMENT FOR UNRESTRICTED STOCK.  UPON RECEIPT OF SHARES OF UNRESTRICTED
STOCK, THE PARTICIPANT AS OWNER OF SUCH SHARES SHALL HAVE THE RIGHTS OF A HOLDER
OF SHARES OF STOCK, INCLUDING THE RIGHT TO VOTE THE UNRESTRICTED STOCK AND TO
RECEIVE DIVIDENDS AND DISTRIBUTIONS THEREON.

 

E.             STOCK APPRECIATION RIGHTS (SARS).  A SAR IS THE RIGHT TO RECEIVE
A PAYMENT MEASURED BY THE INCREASE IN THE FAIR MARKET VALUE OF A SPECIFIED
NUMBER OF SHARES OF STOCK FROM THE DATE OF GRANT OF THE SAR TO THE DATE ON WHICH
THE EMPLOYEE EXERCISES THE SAR.  THE PAYMENT TO WHICH THE EMPLOYEE IS ENTITLED
ON EXERCISE OF A SAR MAY BE IN CASH, IN STOCK VALUED AT FAIR MARKET VALUE ON THE
DATE OF EXERCISE OR PARTLY IN CASH AND PARTLY IN STOCK, AS THE COMMITTEE MAY
DETERMINE.

 

F.              RESTRICTED STOCK UNITS.  A RESTRICTED STOCK UNIT IS AN AWARD
WHICH MAY BE EARNED IN WHOLE OR IN PART UPON THE PASSAGE OF TIME OR THE
ATTAINMENT OF PERFORMANCE CRITERIA ESTABLISHED BY THE COMMITTEE AND WHICH MAY BE
SETTLED FOR CASH, STOCK OR OTHER SECURITIES OR A COMBINATION OF CASH, STOCK OR
OTHER SECURITIES AS ESTABLISHED BY THE COMMITTEE.

 

SECTION 5:         SHARES OF STOCK AVAILABLE UNDER PLAN

 

A.             SUBJECT TO ADJUSTMENT AS SET FORTH IN SECTION 9, THE MAXIMUM
NUMBER OF SHARES OF STOCK THAT MAY BE DELIVERED PURSUANT TO THE PLAN SHALL BE
3,860,000 (THREE MILLION EIGHT HUNDRED SIXTY THOUSAND).  SUBJECT TO THE MAXIMUM
NUMBER OF SHARES AVAILABLE UNDER THE PLAN, NO MORE THAN 2,000,000 (TWO MILLION)
SHARES SHALL BE AVAILABLE FOR AWARDS OF RESTRICTED STOCK AND RESTRICTED STOCK
UNITS (TO THE EXTENT SETTLED IN STOCK), NO MORE THAN 400,000 (FOUR HUNDRED
THOUSAND) SHARES SHALL BE AVAILABLE FOR AWARDS OF UNRESTRICTED STOCK, AND SARS
SHALL BE GRANTED WITH RESPECT TO NO MORE THAN 10,000 (TEN THOUSAND) SHARES OF
STOCK.  NO SINGLE PARTICIPANT SHALL RECEIVE, IN ANY ONE CALENDAR YEAR, AWARDS
WHICH, OVER ANY THREE-YEAR PERIOD, EXCEED A PER-YEAR AVERAGE OF (I) OPTIONS
(WHETHER NON-QUALIFIED STOCK OPTIONS OR INCENTIVE STOCK OPTIONS) WITH RESPECT TO
180,000 (ONE HUNDRED EIGHTY THOUSAND) SHARES OF STOCK, (II) 50,000 (FIFTY
THOUSAND) SHARES OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS (TO THE EXTENT
SETTLED IN STOCK) OR (III) 50,000 (FIFTY THOUSAND) SHARES OF UNRESTRICTED STOCK,
IN EACH CASE SUBJECT TO ADJUSTMENT AS SET FORTH IN SECTION 9.

 

B.             SHARES OF STOCK WITH RESPECT TO THE UNEXERCISED, UNDISTRIBUTED OR
UNEARNED PORTION OF ANY TERMINATED OR FORFEITED AWARD SHALL BE AVAILABLE FOR
FURTHER AWARDS IN ADDITION TO THE SHARES OF STOCK AVAILABLE UNDER SECTION 5(A). 
ADDITIONAL RULES FOR DETERMINING THE NUMBER OF SHARES OF STOCK GRANTED UNDER THE
PLAN MAY BE ADOPTED BY THE COMMITTEE, AS IT DEEMS NECESSARY AND APPROPRIATE.

 

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C.             THE STOCK THAT MAY BE DELIVERED PURSUANT TO AN AWARD UNDER THE
PLAN MAY BE TREASURY OR AUTHORIZED BUT UNISSUED STOCK, OR STOCK MAY BE ACQUIRED,
SUBSEQUENTLY OR IN ANTICIPATION OF THE TRANSACTION, IN THE OPEN MARKET TO
SATISFY THE REQUIREMENTS OF THE PLAN.

 

SECTION 6:         AWARD AGREEMENTS.

 

Each Award under the Plan shall be evidenced by an Award Agreement.  Each Award
Agreement shall set forth the number of shares of Stock subject to the Award and
shall include the terms set forth below and such other terms and conditions
applicable to the Award, as determined by the Committee, not inconsistent with
the terms of the Plan.  Notwithstanding the foregoing, the provisions of
subsection (b) below may be modified to the extent deemed advisable by the
Committee in Award Agreements pertaining to Non-Employees providing consulting,
contracting or other services to the Company or a Subsidiary.  In the event of
any conflict between an Award Agreement and the Plan, the terms of the Plan
shall govern.

 

A.             ASSIGNABILITY.  A PROVISION SETTING FORTH THE CONDITIONS PURSUANT
TO WHICH AN AWARD MAY BE ASSIGNED OR TRANSFERRED.

 

B.             TERMINATION OF EMPLOYMENT.

 

(I)            A PROVISION DESCRIBING THE TREATMENT OF AN AWARD IN THE EVENT OF
THE RETIREMENT, DISABILITY, DEATH OR OTHER TERMINATION OF A PARTICIPANT’S
EMPLOYMENT WITH THE COMPANY OR A SUBSIDIARY, INCLUDING, BUT NOT LIMITED TO, THE
DEFINITIONS OF RETIREMENT AND DISABILITY AND TERMS RELATING TO THE VESTING, TIME
FOR EXERCISE, FORFEITURE OR CANCELLATION OF AN AWARD IN SUCH CIRCUMSTANCES. 
PARTICIPANTS WHO TERMINATE EMPLOYMENT DUE TO RETIREMENT, DISABILITY OR DEATH
PRIOR TO THE SATISFACTION OF APPLICABLE CONDITIONS AND RESTRICTIONS ASSOCIATED
WITH THEIR AWARDS MAY BE ENTITLED TO PRORATED AWARDS AS AND TO THE EXTENT
DETERMINED BY THE COMMITTEE.

 

(II)           A PROVISION DESCRIBING THE TREATMENT OF AN AWARD IN THE EVENT OF
(A) A TRANSFER OF AN EMPLOYEE FROM THE COMPANY TO A SUBSIDIARY OR AN AFFILIATE
OF THE COMPANY, WHETHER OR NOT INCORPORATED, OR VICE VERSA, OR FROM ONE
SUBSIDIARY OR AFFILIATE OF THE COMPANY TO ANOTHER OR (B) A LEAVE OF ABSENCE,
DULY AUTHORIZED IN WRITING BY THE COMPANY.

 

(III)          A PROVISION STATING THAT IN THE EVENT THE PARTICIPANT’S
EMPLOYMENT IS TERMINATED FOR CAUSE (AS DEFINED IN THE AWARD AGREEMENT), ANYTHING
ELSE IN THE PLAN OR AWARD AGREEMENT TO THE CONTRARY NOTWITHSTANDING, ALL AWARDS
GRANTED TO THE PARTICIPANT SHALL IMMEDIATELY TERMINATE AND BE FORFEITED.

 

C.             RIGHTS AS A SHAREHOLDER.  A PROVISION STATING THAT A PARTICIPANT
SHALL HAVE NO RIGHTS AS A SHAREHOLDER WITH RESPECT TO ANY STOCK COVERED BY AN
AWARD UNTIL THE DATE THE PARTICIPANT BECOMES THE HOLDER OF RECORD THEREOF. 
EXCEPT AS PROVIDED IN SECTION 9, NO ADJUSTMENT SHALL BE MADE FOR DIVIDENDS OR
OTHER RIGHTS, UNLESS THE AWARD AGREEMENT SPECIFICALLY REQUIRES SUCH ADJUSTMENT.

 

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D.             WITHHOLDING.  A PROVISION REQUIRING THE WITHHOLDING OF APPLICABLE
TAXES REQUIRED BY LAW FROM ALL AMOUNTS PAID IN SATISFACTION OF AN AWARD.  A
PARTICIPANT MAY SATISFY THE WITHHOLDING OBLIGATION BY PAYING THE AMOUNT OF ANY
TAXES IN CASH OR, WITH THE APPROVAL OF THE COMMITTEE, SHARES OF STOCK MAY BE
DELIVERED TO THE COMPANY OR DEDUCTED FROM THE PAYMENT OR, IN ACCORDANCE WITH
SECTION 4(A)(II), SOLD TO SATISFY THE OBLIGATION IN FULL OR IN PART.  IF SUCH
TAX WITHHOLDING OBLIGATION IS PAID IN SHARES OF STOCK, TAX AMOUNTS SHALL BE
LIMITED TO THE STATUTORY MINIMUM AS REQUIRED BY LAW.

 

E.             TREATMENT OF OPTIONS.  EACH AWARD OF AN OPTION SHALL STATE
WHETHER IT WILL OR WILL NOT BE TREATED AS AN INCENTIVE STOCK OPTION.

 

F.              PERFORMANCE CONDITIONS.  THE COMMITTEE MAY CONDITION, OR PROVIDE
FOR THE ACCELERATION OF, THE EXERCISABILITY OR VESTING OF ANY AWARD UPON SUCH
PREREQUISITES AS IT, IN ITS SOLE DISCRETION, DEEMS APPROPRIATE, INCLUDING, BUT
NOT LIMITED TO, ACHIEVEMENT OF SPECIFIC OBJECTIVES, WHETHER ABSOLUTE OR RELATIVE
TO A PEER GROUP OR INDEX DESIGNATED BY THE COMMITTEE, WITH RESPECT TO ONE OR
MORE MEASURES OF THE PERFORMANCE OF THE COMPANY AND/OR ONE OR MORE SUBSIDIARIES,
INCLUDING, BUT NOT LIMITED TO, EARNINGS PER SHARE, REVENUE, NET INCOME (WHETHER
BEFORE OR AFTER EXTRAORDINARY ITEMS), NET OPERATING INCOME, EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA), STOCK PRICE AND TOTAL
SHAREHOLDER RETURN.  SUCH PERFORMANCE OBJECTIVES SHALL BE DETERMINED IN
ACCORDANCE WITH THE COMPANY’S AUDITED FINANCIAL STATEMENTS, TO THE EXTENT
APPLICABLE, AND SO THAT A THIRD PARTY HAVING KNOWLEDGE OF THE RELEVANT FACTS
COULD DETERMINE WHETHER SUCH PERFORMANCE OBJECTIVES ARE MET.

 

SECTION 7:         AMENDMENT AND TERMINATION

 

The Board of Directors may at any time amend, suspend or discontinue the Plan,
in whole or in part, provided, however, that no such action shall be effective
without the approval of the shareholders of the Company to the extent that such
approval is necessary to comply with any tax or regulatory requirement
applicable to the Plan; and provided, further, that subject to Section 9, no
such action shall impair the rights of any holder of an Award without the
holder’s consent.  The Committee may at any time alter or amend any or all
Awards and Award Agreements under the Plan to the extent permitted by law,
except that, subject to the provisions of Section 9, no such alteration or
amendment shall impair the rights of any holder of an Award without the holder’s
consent.  Notwithstanding the foregoing, no such action may, without approval of
the shareholders of the Company, increase the number of shares of Stock with
respect to which Awards may be granted or reduce the exercise price of any
Option or SAR below Fair Market Value on the date of grant.

 

SECTION 8:         ADMINISTRATION

 

A.             THE PLAN AND ALL AWARDS SHALL BE ADMINISTERED BY THE COMMITTEE. 
THE MEMBERS OF THE COMMITTEE SHALL BE DESIGNATED BY THE BOARD OF DIRECTORS FROM
AMONG ITS MEMBERS WHO ARE NOT ELIGIBLE FOR AWARDS UNDER THE PLAN.

 

B.             ANY MEMBER OF THE COMMITTEE WHO, AT THE TIME OF ANY PROPOSED
GRANT OF ONE OR MORE AWARDS, IS NOT A “NON-EMPLOYEE DIRECTOR” AS DEFINED IN
RULE 16B-3(B)(3)(I) UNDER THE EXCHANGE ACT (OR ANY SUCCESSOR PROVISION) SHALL
ABSTAIN FROM AND TAKE NO PART IN THE COMMITTEE’S ACTION ON THE PROPOSED GRANT.

 

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C.             THE COMMITTEE AND OTHERS TO WHOM THE COMMITTEE HAS DELEGATED SUCH
DUTIES SHALL KEEP A RECORD OF ALL THEIR PROCEEDINGS AND ACTIONS AND SHALL
MAINTAIN ALL SUCH BOOKS OF ACCOUNT, RECORDS AND OTHER DATA AS SHALL BE NECESSARY
FOR THE PROPER ADMINISTRATION OF THE PLAN.

 

D.             THE COMPANY SHALL PAY ALL REASONABLE EXPENSES OF ADMINISTERING
THE PLAN, INCLUDING, BUT NOT LIMITED TO, THE PAYMENT OF PROFESSIONAL FEES.

 

E.             THE COMMITTEE MAY APPOINT SUCH ACCOUNTANTS, COUNSEL AND OTHER
EXPERTS AS IT DEEMS NECESSARY OR DESIRABLE IN CONNECTION WITH THE ADMINISTRATION
OF THE PLAN.  SUBJECT TO THE EXPRESS PROVISIONS OF THE PLAN, THE COMMITTEE MAY
DELEGATE TO THE OFFICERS OR EMPLOYEES OF THE COMPANY AND ITS SUBSIDIARIES THE
AUTHORITY TO EXECUTE AND DELIVER SUCH INSTRUMENTS AND DOCUMENTS, TO DO ALL SUCH
ACTS AND THINGS, AND TO TAKE ALL SUCH OTHER STEPS DEEMED NECESSARY, ADVISABLE OR
CONVENIENT FOR THE EFFECTIVE ADMINISTRATION OF THE PLAN IN ACCORDANCE WITH ITS
TERMS AND PURPOSE.

 

F.              THE COMMITTEE MAY ADOPT SUCH PROCEDURES AND SUB-PLANS AS ARE
NECESSARY OR APPROPRIATE TO PERMIT PARTICIPATION IN THE PLAN BY EMPLOYEES WHO
ARE FOREIGN NATIONALS OR EMPLOYED OUTSIDE THE U.S.  WITHOUT LIMITING THE
FOREGOING, THE COMMITTEE MAY AUTHORIZE SUPPLEMENTARY PLANS APPLICABLE TO
EMPLOYEES SUBJECT TO THE TAX LAWS OF ONE OR MORE COUNTRIES OTHER THAN THE UNITED
STATES IN ORDER TO PROVIDE FOR THE GRANT OF NON-QUALIFIED STOCK OPTIONS,
RESTRICTED STOCK, RESTRICTED STOCK UNITS, UNRESTRICTED STOCK OR SARS TO SUCH
EMPLOYEES ON TERMS AND CONDITIONS, CONSISTENT WITH THE PLAN, DETERMINED BY THE
COMMITTEE WHICH MAY DIFFER FROM THE TERMS AND CONDITIONS OF OTHER AWARDS IN
THOSE FORMS PURSUANT TO THE PLAN FOR THE PURPOSE OF COMPLYING WITH THE
CONDITIONS FOR QUALIFICATION OF AWARDS FOR FAVORABLE TREATMENT UNDER FOREIGN TAX
LAWS.

 

G.             SUBJECT TO THE EXPRESS PROVISIONS OF THE PLAN, THE COMMITTEE
SHALL HAVE THE POWER (I) TO IMPLEMENT (INCLUDING THE POWER TO DELEGATE SUCH
IMPLEMENTATION TO APPROPRIATE OFFICERS OF THE COMPANY), INTERPRET AND CONSTRUE
THE PLAN AND AWARDS AND AWARD AGREEMENTS OR OTHER DOCUMENTS DEFINING THE RIGHTS
AND OBLIGATIONS OF THE COMPANY AND PARTICIPANTS HEREUNDER AND THEREUNDER,
(II) TO DETERMINE ALL QUESTIONS ARISING HEREUNDER AND THEREUNDER, AND (III) TO
ADOPT AND AMEND SUCH RULES AND REGULATIONS FOR THE ADMINISTRATION HEREOF AND
THEREOF AS IT MAY DEEM DESIRABLE.  THE INTERPRETATION AND CONSTRUCTION BY THE
COMMITTEE OF ANY PROVISIONS OF THE PLAN OR OF ANY AWARD OR AWARD AGREEMENT SHALL
BE CONCLUSIVE AND BINDING.  ANY ACTION TAKEN BY, OR INACTION OF, THE COMMITTEE
RELATING TO THE PLAN OR ANY AWARD OR AWARD AGREEMENT SHALL BE WITHIN THE
DISCRETION OF THE COMMITTEE AND SHALL BE CONCLUSIVE AND BINDING UPON ALL
PERSONS.  SUBJECT ONLY TO COMPLIANCE WITH THE EXPRESS PROVISIONS HEREOF, THE
COMMITTEE MAY ACT IN ITS DISCRETION IN MATTERS RELATED TO THE PLAN AND ANY AND
ALL AWARDS AND AWARD AGREEMENTS.  THE COMMITTEE’S DETERMINATIONS UNDER THE PLAN
NEED NOT BE UNIFORM AND MAY BE MADE BY IT SELECTIVELY AMONG EMPLOYEES AND
NON-EMPLOYEES WHO RECEIVE, OR WHO ARE ELIGIBLE TO RECEIVE, AWARDS UNDER THE
PLAN, WHETHER OR NOT SUCH PERSONS ARE SIMILARLY SITUATED.

 

H.             IT IS THE INTENT OF THE COMPANY THAT THE PLAN AND AWARDS
HEREUNDER SATISFY, AND BE INTERPRETED IN A MANNER THAT SATISFY, IN THE CASE OF
PARTICIPANTS WHO ARE OR MAY BE EXECUTIVE OFFICERS, THE APPLICABLE REQUIREMENTS
OF RULE 16B-3 UNDER THE EXCHANGE ACT, SO THAT SUCH PERSONS WILL BE ENTITLED TO
THE BENEFITS OF RULE 16B-3, OR OTHER EXEMPTIVE RULES UNDER SECTION 16 OF THE
EXCHANGE ACT, AND WILL NOT BE SUBJECTED TO AVOIDABLE LIABILITY UNDER
SECTION 16(B) OF THE EXCHANGE ACT.

 

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I.              THE COMMITTEE MAY DELEGATE, AND REVOKE THE DELEGATION OF, ALL OR
ANY PORTION OF ITS AUTHORITY AND POWERS UNDER THE PLAN TO THE CHIEF EXECUTIVE
OFFICER OF THE COMPANY, EXCEPT THAT THE COMMITTEE MAY NOT DELEGATE ANY
DISCRETIONARY AUTHORITY WITH RESPECT TO SUBSTANTIVE DECISIONS OR FUNCTIONS
REGARDING THE PLAN OR AWARDS TO THE EXTENT (I) RELATED TO AWARDS GRANTED TO
EXECUTIVE OFFICERS, (II) INCONSISTENT WITH THE INTENT EXPRESSED IN
SECTION 8(H) OR (III) PROHIBITED BY APPLICABLE LAW.

 

SECTION 9:         ADJUSTMENT PROVISIONS

 

A.             IN THE EVENT OF ANY CHANGE IN OR AFFECTING THE OUTSTANDING SHARES
OF STOCK BY REASON OF A STOCK DIVIDEND OR SPLIT, RECAPITALIZATION,
RECLASSIFICATION, MERGER OR CONSOLIDATION (WHETHER OR NOT THE COMPANY IS A
SURVIVING CORPORATION), REORGANIZATION, COMBINATION OR EXCHANGE OF SHARES OR
OTHER SIMILAR CORPORATE CHANGES OR AN EXTRAORDINARY DIVIDEND IN CASH, SECURITIES
OR OTHER PROPERTY, THE BOARD OF DIRECTORS SHALL MAKE OR TAKE SUCH AMENDMENTS TO
THE PLAN AND OUTSTANDING AWARDS AND AWARD AGREEMENTS AND SUCH ADJUSTMENTS AND
ACTIONS HEREUNDER AND THEREUNDER AS IT DEEMS APPROPRIATE, IN ITS SOLE
DISCRETION, UNDER THE CIRCUMSTANCES, AND ITS DETERMINATION IN THAT RESPECT SHALL
BE FINAL AND BINDING.  SUCH AMENDMENTS, ADJUSTMENTS AND ACTIONS MAY INCLUDE, BUT
ARE NOT LIMITED TO, CHANGES IN THE NUMBER OF SHARES OF STOCK (OR OTHER
SECURITIES) THEN REMAINING SUBJECT TO THE PLAN, AND THE MAXIMUM NUMBER OF SHARES
THAT MAY BE DELIVERED TO ANY SINGLE PARTICIPANT PURSUANT TO THE PLAN, INCLUDING
THOSE THAT ARE THEN COVERED BY OUTSTANDING AWARDS, OR ACCELERATING THE VESTING
OF OUTSTANDING AWARDS.  NO FRACTIONAL INTERESTS WILL BE ISSUED UNDER THE PLAN
RESULTING FROM ANY ADJUSTMENTS.

 

B.             THE COMMITTEE SHALL MAKE ANY FURTHER ADJUSTMENTS AS IT DEEMS
NECESSARY TO ENSURE EQUITABLE TREATMENT OF ANY HOLDER OF AN AWARD AS THE RESULT
OF ANY TRANSACTION AFFECTING THE SECURITIES SUBJECT TO THE PLAN NOT DESCRIBED IN
(A), OR AS IS REQUIRED OR AUTHORIZED UNDER THE TERMS OF ANY APPLICABLE AWARD
AGREEMENT.

 

C.             THE EXISTENCE OF THE PLAN AND THE AWARDS GRANTED HEREUNDER SHALL
NOT AFFECT OR RESTRICT IN ANY WAY THE RIGHT OR POWER OF THE BOARD OF DIRECTORS
OR THE SHAREHOLDERS OF THE COMPANY TO MAKE OR AUTHORIZE ANY ADJUSTMENT,
RECAPITALIZATION, REORGANIZATION OR OTHER CHANGE IN ITS CAPITAL STRUCTURE OR ITS
BUSINESS, ANY MERGER OR CONSOLIDATION OF THE COMPANY, ANY ISSUE OF BONDS,
DEBENTURES, PREFERRED OR PRIOR PREFERENCE STOCK OR OTHER SECURITIES AHEAD OF OR
AFFECTING THE STOCK OR THE RIGHTS THEREOF, THE DISSOLUTION OR LIQUIDATION OF THE
COMPANY OR ANY SALE OR TRANSFER OF ALL OR ANY PART OF ITS ASSETS OR BUSINESS, OR
ANY OTHER CORPORATE ACT OR PROCEEDING.

 

SECTION 10:       MISCELLANEOUS

 

A.             OTHER PAYMENTS OR AWARDS.  NOTHING CONTAINED IN THE PLAN SHALL BE
DEEMED IN ANY WAY TO LIMIT OR RESTRICT THE COMPANY OR A SUBSIDIARY FROM MAKING
ANY AWARD OR PAYMENT TO ANY PERSON UNDER ANY OTHER PLAN, ARRANGEMENT OR
UNDERSTANDING, WHETHER NOW EXISTING OR HEREAFTER IN EFFECT.

 

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B.             PAYMENTS TO OTHER PERSONS.  IF PAYMENTS ARE LEGALLY REQUIRED TO
BE MADE TO ANY PERSON OTHER THAN THE PERSON TO WHOM ANY AMOUNT IS MADE AVAILABLE
UNDER THE PLAN, PAYMENTS SHALL BE MADE ACCORDINGLY. ANY SUCH PAYMENT SHALL BE A
COMPLETE DISCHARGE OF THE LIABILITY HEREUNDER.

 

C.             UNFUNDED PLAN.  THE PLAN SHALL BE UNFUNDED.  NO PROVISION OF THE
PLAN OR ANY AWARD OR AWARD AGREEMENT SHALL REQUIRE THE COMPANY OR A SUBSIDIARY,
FOR THE PURPOSE OF SATISFYING ANY OBLIGATIONS UNDER THE PLAN, TO PURCHASE ASSETS
OR PLACE ANY ASSETS IN A TRUST OR OTHER ENTITY TO WHICH CONTRIBUTIONS ARE MADE
OR OTHERWISE TO SEGREGATE ANY ASSETS, NOR SHALL THE COMPANY OR A SUBSIDIARY
MAINTAIN SEPARATE BANK ACCOUNTS, BOOKS, RECORDS OR OTHER EVIDENCE OF THE
EXISTENCE OF A SEGREGATED OR SEPARATELY MAINTAINED OR ADMINISTERED FUND FOR SUCH
PURPOSES. PARTICIPANTS SHALL HAVE NO RIGHTS UNDER THE PLAN OTHER THAN AS
UNSECURED GENERAL CREDITORS OF THE COMPANY OR A SUBSIDIARY, EXCEPT THAT INSOFAR
AS THEY MAY HAVE BECOME ENTITLED TO PAYMENT OF ADDITIONAL COMPENSATION BY
PERFORMANCE OF SERVICES, THEY SHALL HAVE THE SAME RIGHTS AS OTHER EMPLOYEES OR
CONSULTANTS, AS APPLICABLE, UNDER GENERALLY APPLICABLE LAW.

 

D.             LIMITS OF LIABILITY.  ANY LIABILITY OF THE COMPANY OR A
SUBSIDIARY TO ANY PARTICIPANT WITH RESPECT TO AN AWARD SHALL BE BASED SOLELY
UPON CONTRACTUAL OBLIGATIONS CREATED BY THE PLAN AND THE AWARD AGREEMENT. 
NEITHER THE COMPANY OR ITS SUBSIDIARIES, NOR ANY MEMBER OF THE BOARD OF
DIRECTORS OR OF THE COMMITTEE, NOR ANY OTHER PERSON PARTICIPATING IN ANY
DETERMINATION OF ANY QUESTION UNDER THE PLAN, OR IN THE INTERPRETATION,
ADMINISTRATION OR APPLICATION OF THE PLAN, SHALL HAVE ANY LIABILITY TO ANY PARTY
FOR ANY ACTION TAKEN, OR NOT TAKEN, IN GOOD FAITH UNDER THE PLAN.

 

E.             RIGHTS OF EMPLOYEES AND NON-EMPLOYEES.  STATUS AS AN ELIGIBLE
EMPLOYEE OR NON-EMPLOYEE SHALL NOT BE CONSTRUED AS A COMMITMENT THAT ANY AWARD
SHALL BE MADE UNDER THE PLAN TO SUCH ELIGIBLE EMPLOYEE OR NON-EMPLOYEE OR TO
ELIGIBLE EMPLOYEES OR NON-EMPLOYEES GENERALLY.  NOTHING CONTAINED IN THE PLAN OR
IN ANY AWARD AGREEMENT SHALL CONFER UPON ANY EMPLOYEE OR NON-EMPLOYEE ANY RIGHT
TO CONTINUE IN THE EMPLOY OR OTHER SERVICE OF OR, IN THE CASE OF PROSPECTIVE
EMPLOYEES, CONTRACTORS OR CONSULTANTS, BECOME EMPLOYED BY OR RENDER SERVICE TO
THE COMPANY OR A SUBSIDIARY OR CONSTITUTE ANY CONTRACT OR LIMIT IN ANY WAY THE
RIGHT OF THE COMPANY OR A SUBSIDIARY TO CHANGE SUCH PERSON’S COMPENSATION OR
OTHER BENEFITS OR, IN THE CASE OF PROSPECTIVE EMPLOYEES, CONTRACTORS OR
CONSULTANTS, PROSPECTIVE COMPENSATION OR BENEFITS OR TO TERMINATE THE EMPLOYMENT
OR OTHER SERVICE OR, IN THE CASE OF PROSPECTIVE EMPLOYEES, CONTRACTORS OR
CONSULTANTS, WITHDRAW AN OFFER OF EMPLOYMENT OR OFFER TO RETAIN SUCH PERSON WITH
OR WITHOUT CAUSE.

 

F.              SECTION HEADINGS.  THE SECTION HEADINGS CONTAINED HEREIN ARE FOR
THE PURPOSE OF CONVENIENCE ONLY, AND IN THE EVENT OF ANY CONFLICT, THE TEXT OF
THE PLAN, RATHER THAN THE SECTION HEADINGS, SHALL CONTROL.

 

G.             GENDER, ETC.  IN INTERPRETING THE PLAN, THE MASCULINE GENDER
SHALL INCLUDE THE FEMININE, THE NEUTER GENDER SHALL INCLUDE THE MASCULINE OR
FEMININE, AND THE SINGULAR SHALL INCLUDE THE PLURAL UNLESS THE CONTEXT CLEARLY
INDICATES OTHERWISE.

 

H.             INVALIDITY.  IF ANY TERM OR PROVISION CONTAINED HEREIN OR IN ANY
AWARD AGREEMENT SHALL TO ANY EXTENT BE INVALID OR UNENFORCEABLE, SUCH TERM OR
PROVISION, TO THE EXTENT PRACTICABLE, WILL BE REFORMED SO THAT IT IS VALID AND
AS CONSISTENT AS POSSIBLE WITH THE ORIGINAL PROVISIONS HEREOF, AND SUCH
INVALIDITY OR UNENFORCEABILITY SHALL NOT AFFECT ANY OTHER PROVISION OR PART
THEREOF.

 

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I.              APPLICABLE LAW.  THE PLAN, THE AWARD AGREEMENTS AND ALL ACTIONS
TAKEN HEREUNDER OR THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.

 

J.              COMPLIANCE WITH LAWS.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN
OR IN ANY AWARD AGREEMENT TO THE CONTRARY, THE COMPANY SHALL NOT BE REQUIRED TO
SELL OR DELIVER SHARES OF STOCK OR OTHER SECURITIES HEREUNDER OR THEREUNDER IF
THE SALE OR DELIVERY THEREOF WOULD CONSTITUTE A VIOLATION BY THE PARTICIPANT OR
THE COMPANY OF ANY PROVISIONS OF ANY LAW OR REGULATION OF ANY GOVERNMENTAL
AUTHORITY OR ANY NATIONAL SECURITIES EXCHANGE OR INTERDEALER QUOTATION SYSTEM,
AND AS A CONDITION OF ANY SALE OR DELIVERY THE COMPANY MAY REQUIRE SUCH
AGREEMENTS OR UNDERTAKINGS, IF ANY, AS THE COMPANY MAY DEEM NECESSARY OR
ADVISABLE IN ITS DISCRETION TO ASSURE COMPLIANCE WITH ANY SUCH LAW OR
REGULATION.

 

K.             EFFECTIVE DATE AND TERM.  THE PLAN WAS ADOPTED BY THE BOARD OF
DIRECTORS OF THE COMPANY AND SHALL BE SUBMITTED TO THE SOLE SHAREHOLDER OF THE
COMPANY, AND IF APPROVED, SHALL BE EFFECTIVE AS OF THE MINDSPEED DISTRIBUTION
DATE.  THE PLAN SHALL REMAIN IN EFFECT UNTIL ALL AWARDS GRANTED UNDER THE PLAN
HAVE BEEN EXERCISED OR TERMINATED UNDER THE TERMS OF THE PLAN AND APPLICABLE
AWARD AGREEMENTS, PROVIDED THAT AWARDS UNDER THE PLAN MAY ONLY BE GRANTED WITHIN
TEN (10) YEARS FROM THE EFFECTIVE DATE OF THE PLAN.

 

L.              AWARDS FOR COMPENSATION PURPOSES ONLY.  THE PLAN IS NOT INTENDED
TO CONSTITUTE AN “EMPLOYEE BENEFIT PLAN” WITHIN THE MEANING OF SECTION 3(3) OF
ERISA.

 

M.            PLAN HISTORY.  THE PLAN WAS AMENDED AND RESTATED EFFECTIVE JULY 1,
2008 TO ADJUST (IN ACCORDANCE WITH SECTION 9 OF THE PLAN) THE NUMBER OF SHARES
OF STOCK AVAILABLE UNDER THE PLAN, THE LIMITS ON THE NUMBER OF SHARES OF STOCK
THAT MAY BE GRANTED AS CERTAIN AWARDS AND THE ANNUAL LIMITS OF AWARDS THAT MAY
BE GRANTED TO PARTICIPANTS (AS SET FORTH IN SECTION 5(A) OF THE PLAN) AFTER
GIVING EFFECT TO A 1-FOR-5 REVERSE STOCK SPLIT OF THE COMPANY’S STOCK, WHICH
BECAME EFFECTIVE AT 11:59 P.M. EDT ON JUNE 30, 2008.  SUCH AMENDMENT AND
RESTATEMENT WAS NOT SUBJECT TO THE APPROVAL OF THE COMPANY’S SHAREHOLDERS.

 

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