Exhibit 10.3
**LSI LOGIC CORPORATION**
**RESTRICTED STOCK UNIT AGREEMENT**
     LSI Logic Corporation (the “Company”) hereby grants you (the “Employee”),the number of Restricted Stock Units under the Company’s 2003 Equity IncentivePlan (the “Plan”), indicated on the attached Notice of Grant of Award and AwardAgreement (the “Notice of Grant”) effective as of the date indicated on theNotice of Grant (the “Grant Date”). The Notice of Grant and this agreementcollectively are referred to as the “Agreement.”
*IMPORTANT:*
     Your signature to this Agreement indicates your agreement andunderstanding that this grant is subject to all of the terms and conditionscontained in this Agreement and the Plan. For example, important additionalinformation on vesting and forfeiture of the Restricted Stock Units covered bythis grant is contained in the Notice of Grant. PLEASE BE SURE TO READ ALL OFTHE NOTICE OF GRANT, WHICH CONTAINS CERTAIN SPECIFIC TERMS AND CONDITIONS OFTHIS AGREEMENT.
*TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT*
     1. Grant. The Company hereby grants to the Employee under the Plan thenumber of Restricted Stock Units indicated in the Notice of Grant, subject toall of the terms and conditions in this Agreement and the Plan. When theRestricted Stock Units are paid to the Employee, par value will be deemed paidby the Employee for each Restricted Stock Unit by past services rendered by theEmployee, and will be subject to the appropriate tax withholdings.
     2. Company’s Obligation to Pay. Each Restricted Stock Unit has a valueequal to the Fair Market Value of a Share on the date of grant. Unless anduntil the Restricted Stock Units have vested in the manner set forth inparagraphs 3 or 4, the Employee will have no right to payment of suchRestricted Stock Units. Prior to actual payment of any vested Restricted StockUnits, such Restricted Stock Units will represent an unsecured obligation.
     3. Vesting Schedule/Period of Restriction. Except as otherwise providedin paragraph 4 of this Agreement, the Restricted Stock Units awarded by thisAgreement are scheduled to vest in accordance with the vesting schedule setforth in the Notice of Grant. Restricted Stock Units scheduled to vest on anysuch date actually will vest only if the Employee has not incurred aTermination of Service prior to such date. Vesting will continue during anyCompany-approved leave of absence.
     4. Committee Discretion. The Committee, in its discretion, may acceleratethe vesting of the balance, or some lesser portion of the balance, of theRestricted Stock Units at any time, subject to the terms of the Plan. If soaccelerated, such Restricted Stock Units will be considered as having vested asof the date specified by the Committee.
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     5. Payment after Vesting. Any Restricted Stock Units that vest inaccordance with paragraph 3 or 4 will be paid to the Employee (or in the eventof the Employee’s death, to his or her estate) in Shares as soon as practicablefollowing the date of vesting, subject to paragraph 8.
     6. Forfeiture. Notwithstanding any contrary provision of this Agreement,the balance of the Restricted Stock Units that have not vested pursuant toparagraphs 3 or 4 at the time of the Employee’s Termination of Service will beforfeited and automatically transferred to and reacquired by the Company at nocost to the Company. The Employee shall not be entitled to a refund of theprice paid for the Restricted Stock Units forfeited to the Company pursuant tothis paragraph 6.
     7. Death of Employee. Any distribution or delivery to be made to theEmployee under this Agreement will, if the Employee is then deceased, be madeto the administrator or executor of the Employee’s estate. Any suchadministrator or executor must furnish the Company with (a) written notice ofhis or her status as transferee, and (b) evidence satisfactory to the Companyto establish the validity of the transfer and compliance with any laws orregulations pertaining to said transfer.
     8. Withholding of Taxes. When the Shares are issued as payment for vestedRestricted Stock Units, the Employee will recognize immediate U.S. taxableincome if the Employee is a U.S. taxpayer. If the Employee is a non-U.S.taxpayer, the Employee will be subject to applicable taxes in his or herjurisdiction. The Company may, in its discretion, withhold a portion of thevested Restricted Stock Units that have an aggregate market value sufficient topay the federal, state and local income, employment and any other applicabletaxes required to be withheld by LSI Logic. No fractional Shares will bewithheld or issued pursuant to the grant of Restricted Stock Units and theissuance of Shares thereunder; any additional withholding necessary for thisreason will be done by the Company through the Employee’s paycheck.Accordingly, to the extent the Fair Market Value of the number of whole Shareswithheld by the Company exceeds the withholding taxes, the Company will payEmployee the difference. In the event the withholding requirements are notsatisfied through the withholding of Shares (or, through the Employee’spaycheck, as indicated above), no payment will be made to the Employee (or hisor her estate) for Restricted Stock Units unless and until satisfactoryarrangements (as determined by the Committee) have been made by the Employeewith respect to the payment of any income and other taxes which the Companydetermines must be withheld or collected with respect to such Restricted StockUnits.
     9. Rights as Stockholder. Neither the Employee nor any person claimingunder or through the Employee will have any of the rights or privileges of astockholder of the Company in respect of any Shares deliverable hereunderunless and until certificates representing such Shares (which may be in bookentry form) will have been issued, recorded on the records of the Company orits transfer agents or registrars, and delivered to the Employee (includingthrough electronic delivery to a brokerage account). After such issuance,recordation and delivery, the Employee will have all the rights of astockholder of the Company with respect to voting such Shares and receipt ofdividends and distributions on such Shares.
     10. No Effect on Employment. Subject to any employment contract with theEmployee, the terms of such employment will be determined from time to time bythe Company, or the Affiliate employing the Employee, as the case may be, andthe Company, or the Affiliate employing the Employee, as the case may be, willhave the right, which is hereby expressly reserved, to terminate
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or change the terms of the employment of the Employee at any time for anyreason whatsoever, with or without good cause. The transactions contemplatedhereunder and the vesting schedule set forth in the Notice of Grant do notconstitute an express or implied promise of continued employment for any periodof time.
     11. Address for Notices. Any notice to be given to the Company under theterms of this Agreement will be addressed to the Company, in care of StockAdministration Department, at LSI Logic Corporation, 1621 Barber Lane,Milpitas, CA 95035, or at such other address as the Company may hereafterdesignate in writing.
     12. Grant is Not Transferable. Except to the limited extent provided inparagraph 7 above, this grant of Restricted Stock Units and the rights andprivileges conferred hereby will not be transferred, assigned, pledged orhypothecated in any way (whether by operation of law or otherwise) and will notbe subject to sale under execution, attachment or similar process, until youhave been issued the Shares. Upon any attempt to transfer, assign, pledge,hypothecate or otherwise dispose of this grant, or any right or privilegeconferred hereby, or upon any attempted sale under any execution, attachment orsimilar process, this grant and the rights and privileges conferred herebyimmediately will become null and void.
     13. Restrictions on Sale of Securities. The Shares issued as payment forvested Restricted Stock Units awarded under this Agreement will be registeredunder the federal securities laws and will be freely tradable upon receipt.However, your subsequent sale of the Shares will be subject to any marketblackout-period that may be imposed by the Company and must comply with theCompany’s insider trading policies (see the “Securities Laws” paragraph of the*LSI Logic Employee Handbook*Standards of Business Conduct section), and anyother applicable securities laws.
     14. Binding Agreement. Subject to the limitation on the transferabilityof this grant contained herein, this Agreement will be binding upon and inureto the benefit of the heirs, legatees, legal representatives, successors andassigns of the parties hereto.
     15. Additional Conditions to Issuance of Certificates for Shares. TheCompany shall not be required to issue any certificate or certificates forShares hereunder prior to fulfillment of all the following conditions: (a) theadmission of such Shares to listing on all stock exchanges on which such classof stock is then listed; (b) the completion of any registration or otherqualification of such Shares under any state or federal law or under therulings or regulations of the Securities and Exchange Commission or any othergovernmental regulatory body, which the Committee shall, in its absolutediscretion, deem necessary or advisable; (c) the obtaining of any approval orother clearance from any state or federal governmental agency, which theCommittee shall, in its absolute discretion, determine to be necessary oradvisable; and (d) the lapse of such reasonable period of time following thedate of vesting of the Restricted Stock Units as the Committee may establishfrom time to time for reasons of administrative convenience.
     16. Plan Governs. This Agreement is subject to all terms and provisionsof the Plan. In the event of a conflict between one or more provisions of thisAgreement and one or more provisions of the Plan, the provisions of the Planwill govern. Capitalized terms used and not defined in this Agreement willhave the meaning set forth in the Plan.
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     17. Committee Authority. The Committee will have the power to interpretthe Plan and this Agreement and to adopt such rules for the administration,interpretation and application of the Plan as are consistent therewith and tointerpret or revoke any such rules (including, but not limited to, thedetermination of whether or not any Restricted Stock Units have vested). Allactions taken and all interpretations and determinations made by the Committeein good faith will be final and binding upon the Employee, the Company and allother interested persons. No member of the Committee will be personally liablefor any action, determination or interpretation made in good faith with respectto the Plan or this Agreement.
     18. Captions. Captions provided herein are for convenience only and arenot to serve as a basis for interpretation or construction of this Agreement.
     19. Agreement Severable. In the event that any provision in thisAgreement will be held invalid or unenforceable, such provision will beseverable from, and such invalidity or unenforceability will not be construedto have any effect on, the remaining provisions of this Agreement.
     20. Modifications to the Agreement. This Agreement constitutes the entireunderstanding of the parties on the subjects covered. The Employee expresslywarrants that he or she is not accepting this Agreement in reliance on anypromises, representations, or inducements other than those contained herein.Modifications to this Agreement or the Plan can be made only in an expresswritten contract executed by a duly authorized officer of the Company.
     21. Amendment, Suspension or Termination of the Plan. By accepting thisaward, the Employee expressly warrants that he or she has received a right topurchase stock under the Plan, and has received, read and understood adescription of the Plan. The Employee understands that the Plan isdiscretionary in nature and may be modified, suspended or terminated by theCompany at any time.
     22. Notice of Governing Law. This grant of Restricted Stock Units shallbe governed by, and construed in accordance with, the laws of the State ofCalifornia without regard to principles of conflict of laws.
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