Exhibit 10.1

 
MIPS Technologies, Inc.
Performance-Based Bonus Plan for Executives
Effective July 1, 2010
(adopted by the Board of Directors on August 12, 2010)

 
1.
Purpose. The purpose of the MIPS Technologies, Inc. Performance-Based Bonus Plan
for Executives is to enhance employee retention, to incentivize selected
employees to strengthen their focus on key corporate financial goals, and to
align individual and group actions with the corporate financial performance
objectives on behalf of the stockholders.

 
2.
Eligibility. The CEO and other executives or employees as recommended by the CEO
and approved by the Compensation and Nominating Committee of the Board of
Directors shall be eligible to participate in the plan.  An eligible employee
must be an employee in good standing at MIPS Technologies, Inc. or one of its
subsidiaries at the completion of each plan period and at the time of
payout.  The Board of Directors shall retain in its sole discretion the
authority to approve payments to the CEO.  Upon the recommendation of the CEO,
the Compensation and Nominating Committee shall in its sole discretion approve
payments to other participating executives or employees.

 
3.
Plan Period.  Each plan period shall be the MIPS Technologies, Inc. fiscal year.

 
4.
Financial Plan.  The financial plan is the Statement of Operations approved
annually by the Board of Directors for the upcoming fiscal year which includes
the overall corporate revenue and pro forma operating margin goals to be used
for the corporate performance calculations below.  The calculations described
below shall be based on the actual revenue and pro forma operating margin
derived on the same basis as the financial plan goals approved by the Board of
Directors.

 
5.
Calculation of Payments.  Individual payouts shall be calculated as follows:

a.  
A specific percentage of base salary shall be established for each selected
participant as the target for “on plan” compensation.  For the CEO, the target
shall be 70%.  For the senior executive staff, the target shall be 40%.   Other
selected participants may have other targets as determined by the CEO.

b.  
The target percentage of base salary shall be multiplied by a multiplier based
100% on overall corporate performance.

c.  
In calculating the multiplier associated with corporate performance, the
following applies:

i.  
Zero payment if either actual corporate revenue or pro forma operating margin is
less than 80% of the approved financial plan.

ii.  
Payment of one times the target percentage if both actual corporate revenue and
pro forma operating margin are exactly at financial plan numbers.

iii.  
Payment of a maximum of two times the target percentage if the actual pro forma
operating margin exceeds the financial plan by 30% or more, provided the actual
corporate revenue is equal to or exceeds the approved financial plan revenue
number.

iv.  
The multiplier is determined by adding the following three components
together:  (a) A number between zero (0) and one half (0.5) determined by taking
actual revenue for the plan period and calculating on a linear proportional
basis from 80% to 100% of the financial plan number; (b) a number between zero
(0) and one half (0.5) determined by taking actual pro forma operating margin
for the plan period and calculating on a linear proportional basis from 80% to
100% of the financial plan number; and (c) a number between zero (0) and one
(1.0) determined by taking actual pro forma operating margin for the plan period
and calculating  on a linear proportional basis from 100% to 130% of the
financial plan number.

 
v.
For purposes of this bonus plan, the actual pro forma operating margin shall be
derived on the same basis as the financial plan which generally shall be by
taking GAAP operating margin less non cash costs (such as for 123R stock based
compensation and certain other amortized costs) and other exceptional charges
(such as for acquisitions or restructurings).

d. The Board of Directors and the Compensation and Nominating Committee, as
applicable, shall have discretion to vary the amount of the multiplier in light
of the CEO’s and other executive’s or employee’s performance to goals,
notwithstanding the above calculation.

 
6.
Payments.  Payments will be paid in cash, typically within two months after the
completion of each plan period, unless the participant has exercised a right
under a company established plan to defer such payment, in which case, when
applicable, payment in accordance with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended, will be made in accordance with
such deferral plan and applicable law.  A participant has no right to any
payment if such participant is not employed on the date of payment
unless otherwise determined by the Compensation and Nominating Committee in its
sole discretion.

 
7.
Amendment or Termination of Plan.  The plan shall continue in effect until
modified or eliminated by the Board of Directors.  The Board of Directors may
amend modify or terminate the plan at any time without the consent of any
person.