Exhibit 10.1



 




 




    EXHIBIT 10.1



 




    Mindspeed
    Technologies, Inc.

    



 




    2003
    Long-Term Incentives Plan,

    





    as
    amended and restated



 



    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 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




    

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    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).



 



    “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.




    

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    (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.



 



    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.



 



    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




    

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    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 19,300,000 (nineteen million three
    hundred thousand). Subject to the maximum number of shares
    available under the Plan, no more than 10,000,000 (ten million)
    shares shall be available for Awards of Restricted Stock and
    Restricted Stock Units (to the extent settled in Stock), no more
    than 2,000,000 (two million) shares shall be available for
    Awards of Unrestricted Stock, and SARs shall be granted with
    respect to no more than 50,000 (fifty 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 900,000 (nine
    hundred thousand) shares of Stock, (ii) 250,000 (two
    hundred fifty thousand) shares of Restricted Stock and
    Restricted Stock Units (to the extent settled in Stock) or
    (iii) 250,000 (two hundred 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.



 



    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.




    

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    (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.



 



    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.



 



    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.




    

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    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.



 



    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.




    

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    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.



 



    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




    

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    consistent as possible with the original provisions hereof, and
    such invalidity or unenforceability shall not affect any other
    provision or part thereof.



 



    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.




    

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