exv10w1



 





Exhibit 10.1









July 2, 2007




Mr. Umesh Padval

LSI Corporation

1873 Barber Lane

Milpitas, CA 95035




Dear Umesh,




The purpose of this letter is to detail the terms of a special retention bonus (the “Retention
Bonus”) developed for you in order to provide you with a financial incentive to remain an active
employee in good standing with the company and to achieve the performance goals set forth in this
letter.



As you know, LSI recently announced that it would explore strategic options for the Consumer
Products Group (CPG) with a goal of optimizing the value of the business for our customers,
employees and shareholders. Therefore, it is important to stay focused on delivering on our
commitments to our customers and to each other. Because your continued performance and
contributions are critical, the company is pleased to provide you with an opportunity to receive a
Retention Bonus as set forth below.



Retention Bonus




You will be eligible to receive a Retention Bonus equal to a maximum payout of $250,000 if (a) you
remain in your current position as an employee in good standing within the CPG organization through
August 31, 2007 (the “Retention Date”), and (b) you achieve the performance goals set forth
on Annex A (the “Performance Goals”).



The Retention Bonus, if earned, will be paid in a single lump sum payment within thirty (30) days
of the Retention Date. If you do not achieve the Performance Goals or if at any time prior to
Retention Date, (1) you voluntarily terminate your employment with the company, or (2) your
employment with the company is terminated for cause (as defined below), then your right to receive
the applicable retention payment shall lapse. If the company terminates your employment without
cause prior to the Retention Date (whether or not the Performance Goals are achieved), then the
Retention Bonus shall be deemed to be earned, and will be paid to you in a single lump sum within
thirty (30) days of any such termination.



Solely, for the purpose of this letter, termination “for cause” shall mean the termination of your
employment by the company following the occurrence of any of the following: (a) violation of the
company’s code of conduct; (b) conviction of (including a plea of guilty or nolo contendere) of a
felony or any crime of theft, dishonesty or moral turpitude; (c) an omission or dereliction of any
statutory or common law duty of loyalty to the company; or (d) you willfully neglect the duties of
your employment.



 









 





For the purpose of any benefit calculations (i.e., 401(k), ESPP, etc.), any payment made hereunder
is not included in benefit calculations.



Any payment shall be subject to any applicable taxes, and all applicable taxes shall be deducted
from any payment that is made to you.



Employment as a Technical Advisor




On September 1, 2007, you will resign your position as EVP CPG and officer and become a Technical
Consultant to the company until March 31, 2008 at a monthly payment of $15,000 per month, subject
to you executing the company’s standard form of Separation Agreement and General Release to include
non-solicit and non-compete covenants in the form attached as Annex B for a period
ending on 3/31/2008, the date of your termination. In addition, during your term as a Technical
Advisor to the company you would continue to be eligible for all company benefits other than
vacation accrual and a car allowance.



Employment At Will




Please be aware that this letter is not an employment contract and should not be construed or
interpreted as creating an implied or expressed guarantee of continued employment. The employment
relationship is by mutual consent. This means that you have the right to terminate your employment
at any time and for any reason. Likewise, the company reserves the right to terminate your
employment on the same basis.



Contingency of Offer




This terms and conditions set forth in this letter are contingent upon the approval of the
Compensation Committee of our Board of Directors.



Acceptance




Please acknowledge your written acceptance of this offer by signing and returning a copy to Jon
Gibson, Vice President — Human Resources.



*     *     *




We look forward to your continued contributions to the success of our company and CPG.



Sincerely,




/s/ Jon R Gibson




Jon R Gibson

Vice President, Human Resources

Acknowledged and Agreed:




/s/ Umesh Padval




Umesh Padval

July 6, 2007




 









 





Annex A




Performance Goals




1. Sale of the CPG Business




A bona fide buyer enters into a definitive purchase agreement for the purchase of all or
substantially all of the CPG business by July 15, 2007, and the closing of any such transaction
occurs on or before August 31, 2007. The decision of whether or note to enter into any Definitive
Agreement shall be in the sole and absolute discretion of the company and its Board of Directors.



2. Alternative Transaction




If the business is not sold or in the process of being sold as set forth above, then the CPG team
under your direction must meet any alternative goals and objectives for the business established by
the CEO in his sole discretion, and as approved by the Compensation Committee.



*     *     *




In order to receive the Retention Bonus either of the Performance Goals (1 or 2) above must be met
but not both. Notwithstanding anything to the contrary contained in this letter, no payment shall
be required to be made if neither of the Performance Goals is met for any reason. Determination of
whether a Performance Goal has been achieved shall be made by LSI’s President and Chief Executive
Officer, in his sole and absolute discretion, and approved by the Compensation Committee of the
Board of Directors.



 









 





Annex B




Form of Restrictive Covenants




Non-Solicitation




Until March 31, 2008, you shall not, without the prior written consent of the LSI’s Chief Executive
Officer, (i) directly or indirectly solicit (or encourage any company or business organization in
which you are an officer, employee, partner, director, consultant or member of a technical advisory
board to solicit or employ) or (ii) refer to any employee search firms, any person who was employed
by LSI as of the date hereof.



Non-Competition




Until March 31, 2008, you shall not, without the prior written consent of the LSI’s Chief Executive
Officer, at any time or for any reason, anywhere in the world, directly or indirectly (i) engage in
any business or activity, whether as an employee, consultant, partner, principal, agent,
representative, stockholder (except as a holder of less than 5% of the combined voting power of the
outstanding stock of a publicly held company) or in any other individual, corporate or
representative capacity, or render any services or provide any advice to any business, activity,
person or entity, if you know or reasonably should know that such business, activity, service,
person or entity, directly or indirectly, competes in any material manner with LSI’s business as
constituted on the date hereof, or (ii) meaningfully assist, help or otherwise support any person,
business, corporation, partnership or other entity or activity, whether as an employee, consultant,
partner, principal, agent, representative, stockholder (other than in the capacity as a stockholder
of less than 5% of the combined voting power of the outstanding shares of stock of a publicly held
company) or in any other individual, corporate or representative capacity, to create, commence or
otherwise initiate, or to develop, enhance or otherwise further, any business or activity if you
know or reasonably should know that such business, activity, service, person or entity, directly or
indirectly, competes in any material manner with LSI’s business as constituted on the date hereof.
For the purposes of this Agreement, LSI’s competitors shall be those companies listed in the
“Competition” section of LSI’s Form 10-K for the fiscal year ended December 31, 2006.



If at any time you violate the provisions above, any amounts remaining unpaid as set forth in this
Agreement as well as any benefits provided for in this Agreement (other than those from qualified
retirement or welfare plans) and any continuing vesting of stock options or restricted stock units,
if any, shall immediately be forfeited and terminated, and any amounts already paid to me in
accordance with this Agreement, except for the sum of One Thousand Dollars ($1,000) shall, at LSI’s
sole discretion, be required to be repaid by you to LSI within ten (10) business days of LSI’s
request in writing therefore. This provision shall not affect LSI’s right to otherwise specifically
enforce any provision relating to non-solicitation or non-competition that is in this Agreement or
in any other agreement, document or plan applicable to me.