exv10w50



 






Exhibit 10.50




CONFIDENTIAL TREATMENT REQUESTED

BY LSI LOGIC CORPORATION




CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE STAFF
OF THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].




 





	 	 	 
	Notice of Grant of Stock Options

	 	LSI LOGIC CORPORATION

ID: 94-2712976

1621 BARBER LANE

MILPITAS, CALIFORNIA 95035






 





	 	 	 
	Abhijit Y. Talwalkar

	 	Option Number:
	 

	 	Plan: 2003 Equity Incentive Plan






 





Effective June 1, 2005, you have been granted a nonstatutory stock option to buy 2,000,000 shares
of LSI LOGIC CORPORATION (the “Company”) common stock at an exercise price of $7.38 per share.




The total option price of the shares granted is $14,760,000.



The number of shares indicated in the table below are scheduled to become vested on the respective
dates shown below if and only if both: (1) the performance criteria shown below are satisfied and
(2) you continue to be an employee of the Company on each such date.



The latest this option will expire is the Expiration Date shown below; however, if your employment
with the Company is terminated, this option may expire sooner, as described in the attached Stock
Option Agreement (the “Agreement”). Capitalized terms that are not defined in this Notice of Grant
or the Agreement have the same meaning as in the referenced stock option plan.



Subject to the provisions of Section 3 of the Agreement, this option is scheduled to vest according
to the schedule set forth in this Notice of Grant assuming that the Company’s yearly performance
goals set forth below are met (with appropriate adjustments to be made for acquisitions and
divestitures). The targets listed below for the Company’s Annual Percentage Growth of Revenue and
Annual Operating Profit (“OP”) as Percentage of Revenue for a particular year and the Company’s
cumulative targets (with such cumulative targets through and including that year) for Percentage
Growth and Weighted Average OP Percentage must be met before any vesting occurs in that particular
year. “Annual Percentage Growth of Revenue” shall mean the percentage growth of Company revenue
year to year, starting with a [*] as projected at the May meeting of the Company’s Board of
Directors. OP shall be determined per the Company’s internal reporting standard [*]. “Cumulative
Percentage Growth” shall be determined per the cumulative percentage growth of Company revenue with
a [*] (and [*] at the May meeting of the Company’s Board of Directors). The “Cumulative


 









 






Weighted Average OP Percentage” shall be determined per the cumulative weighted average of OP as a
percentage of Company revenue beginning with [*].



If the Company’s performance goals are not met in a particular year and therefore there is no
vesting of the shares associated with such targets, then such shares shall vest in a subsequent
year if the cumulative goals for both revenue and weighted average of OP are met in a subsequent
year. By means of example only, if the Company does not achieve the Annual Percentage Growth of
Revenue Target in [*], then no shares shall vest on [*]. If [*] the Company then achieves the
Cumulative Percentage Growth and Cumulative Weighted Average OP Percentage [*], then the shares
originally scheduled to vest on [*] instead shall fully vest and become exercisable on [*]. The
vesting of shares described in the preceding sentence shall not affect the vesting of the shares
otherwise scheduled to vest on [*], which shares may or may not actually vest on such date,
depending on whether or not the [*] actually are met.



Any questions of interpretation and determination relating to the achievement of the performance
goals set forth in this Agreement (including, but not limited to, adjustments for any Company
mergers, acquisitions, dispositions or other transactions) shall be decided by the Compensation
Committee of the Company’s Board of Directors in its sole discretion.



In general, the Committee expects not to adjust the performance goals for acquisitions because in
all events, the Cumulative Weighted Average OP Percentage targets must be satisfied, whether or not
an acquisition occurs. The Committee expects to adjust the performance goals for any dispositions
that specifically are reported in the Company’s Securities and Exchange Commission filings or
described in a press release. In the event of such a disposition, an adjustment will be made to
remove historical revenue of the disposed business(es) for both the Annual and Cumulative Growth of
Revenue goals. For purposes of computing both the OP and Cumulative Weighted Average OP Percentage
targets, Operating Profit in the year of disposition will exclude profit or loss for the disposed
business(es). The Cumulative Weighted Average OP Percentage calculated through the year prior to
year of the disposition will remain unchanged and be weighted into the current year calculation
without historical adjustment. In the case of a disposition not described in the second sentence
of this paragraph, no adjustment will be made to the reported actual or historical results and the
applicable goals also will remain unchanged.



Notwithstanding the foregoing, any remaining unvested shares shall fully vest and become
exercisable on June 1, 2011, subject to your continued employment on such date.



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Annual	 	 	 	Cumulative	 	Cumulative
	 	 	 	 	Percentage	 	Annual OP as	 	Percentage	 	Weighted
	 	 	Number of	 	Growth of	 	Percentage of	 	Growth of	 	Average OP
	Vesting Date	 	Shares	 	Revenue1	 	Revenue	 	Revenue	 	Percentage
	December 31, 2006
	 	666,666	 	[*]	 	[*]	 	[*]	 	[*]
	December 31, 2007
	 	666,667	 	[*]	 	[*]	 	[*]	 	[*]
	December 31, 2008
	 	666,667	 	[*]	 	[*]	 	[*]	 	[*]
	December 31, 2009
	 	—	 	[*]	 	[*]	 	[*]	 	[*]
	December 31, 2010
	 	—	 	[*]	 	[*]	 	[*]	 	[*]
	December 31, 2011
	 	Remaining unvested shares
	 	—	 	—	 	—	 	—









 




			
	1	 	The revenue growth percentage [*]




-2-









 










Expiration Date of Option: June 1, 2012




 





By your signature below, you agree that this option is granted under and governed by the terms and
conditions of the Agreement (and the stock option plan referenced therein), which is attached and
made a part of this document. You acknowledge that you have received, read and understand this
Notice of Grant, the Agreement and the referenced stock option plan, and that you have had an
opportunity to obtain the advice of counsel prior to signing below. You agree to accept as
binding, conclusive and final all decisions or interpretations of the Administrator regarding any
questions relating to the referenced stock option plan, this Notice of Grant and the Agreement.




 





	 	 	 
	/s/ Abhijit Y. Talwalkar                    

	 	August 9, 2005                    
	ABHIJIT Y. TALWALKAR

	 	DATE







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