exhibit10-1.htm


    Exhibit
10.1


      


       

      LSI
CORPORATION INCENTIVE PLAN

      


       

      1.  Purposes of the
Plan. The purpose of the LSI Corporation Incentive Plan is to motivate
and reward Participants by making a significant portion of their cash
compensation directly dependent upon achieving performance goals that further
the Company’s business and strategic objectives. It is the Company’s intention
that the compensation paid hereunder will qualify as “performance-based” within
the meaning of Section 162(m) of the Internal Revenue Code of 1986, and will
thereby be fully deductible by the Company.

       

      2.  Definitions.

       

      (a)
“Affiliate” means any corporation or other entity (including, but not limited
to, partnerships and joint ventures) controlled by the Company.

       

      (b)
“Actual Award” means, as to any Performance Period, the actual award, if any,
payable to a Participant, as determined pursuant to Section 6 for a
Performance Period. Each Actual Award is determined by a Payout Formula for a
Performance Period, subject to the Committee’s authority under Section 8(d) to
reduce the Award otherwise payable.

       

      (c) “Board”
means the Board of Directors of the Company.

       

      (d)
“CEO” means the chief executive officer of the Company.

       

      (e) “Committee”
means the Compensation Committee of the Board, or a sub-committee of the
Compensation Committee, which shall consist solely of two or more members of the
Board who qualify as “outside directors” within the meaning of
Section 162(m).

       

      (f) “Company”
means LSI Corporation.

       

      (g) “Determination
Date” means the latest possible date that will not jeopardize a Target Award or
an Actual Award’s qualification as performance-based compensation under
Section 162(m).

       

      (h) “Earnings
Per Share” means, as to any Performance Period, the Company’s earnings per
share, determined in accordance with GAAP or such other basis determined by the
Committee.

       

      (i) “Employee”
means any employee of the Company or of an Affiliate, whether such employee is
so employed at the time the Plan is adopted or becomes so employed subsequent to
the adoption of the Plan.

       

      (j)
“GAAP” means generally accepted accounting principles in the United
States.

       

      (k) “Maximum
Award” means as to any Participant during any period of three (3) consecutive
Plan Years, $9,000,000.

       

      (l) “Operating
Income” means as to any Performance Period, the Company’s operating income,
determined in accordance with GAAP or such other basis determined by the
Committee.

       

      (m) “Participant”
means as to any Performance Period, an Employee who has been selected by the
Committee for participation in the Plan for that Performance
Period.

       

      (n) “Payout
Formula” means the formula or payout matrix established by the Committee
pursuant to Section 7 in order to determine the Actual Awards, if any, to
Participants. The formula or matrix may differ from Participant to
Participant.

       

      (o) “Performance-Based
Compensation” means compensation that is intended to qualify as
“performance-based compensation” within the meaning of
Section 162(m).

       

      (p) “Performance
Goals” means the goal(s) (or combined goal(s)) determined by the Committee (in
its discretion) to be applicable to a Participant for an award for a Performance
Period. As determined by the Committee, the Performance Goal(s) for any award
applicable to a Participant may provide for a targeted level or levels of
achievement using one or more of the following measures: (a) Earnings Per
Share, (b) Operating Income, (c) Profit, (d) Return On Equity,
(e) Revenue and (f) Total Shareholder Return. Performance Goals may
differ from Participant to Participant, Performance Period to Performance Period
and from award to award. Any criteria used may be measured, as applicable,
(i) in absolute terms, (ii) in relative terms (including, but not limited
to, passage of time and/or against another company or companies), (iii) on
a per-share basis, (iv) against the performance of the Company as a whole
or a segment of the Company and/or (v) on a pre-tax or after-tax basis.
Prior to the Determination Date, the Committee may determine that any element(s)
normally included in or excluded from the applicable measures shall be included
in or excluded from the calculation of any Performance Goal with respect to any
Participants, whether or not such determinations result in any Performance Goal
being measured on a basis other than GAAP.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (q) “Performance
Period” means any Plan Year or such other shorter or longer period, as
determined by the Committee in its sole discretion.  Unless the
Committee determines otherwise, the Performance Period for a Participant shall
be a Plan Year.

       

      (r) 
“Plan” means this LSI Corporation Incentive Plan.

       

      (s) “Plan
Year” means the Company’s fiscal year.

       

      (t) “Profit”
means as to any Performance Period, the Company’s income, determined in
accordance with GAAP or such other basis determined by the
Committee.

       

       (v) “Return
On Equity” means as to any Performance Period, the percentage equal to the
Company’s Profit divided by average shareholder’s equity, determined in
accordance with GAAP or such other basis determined by the
Committee.

       

      (w) “Revenue”
means as to any Performance Period, the Company’s revenues determined in
accordance with GAAP or such other basis determined by the
Committee.

       

      (x) “Section
162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as amended,
as that Section may be interpreted from time to time by the Internal Revenue
Service, whether by regulation, notice or otherwise.

       

      (y) “Section
409A” means Section 409A of the Internal Revenue Code of 1986, as amended, as
that Section may be interpreted from time to time by the Internal Revenue
Service, whether by regulation, notice or otherwise.

       

      (z) “Shares”
means shares of the Company’s common stock.

       

      (aa) “Target
Award” means the target award payable under the Plan to a Participant for the
Performance Period, expressed as a percentage of his or her base salary or a
specific dollar amount, as determined by the Committee in accordance with
Section 6.

       

      (bb) “Total
Shareholder Return” means as to any Performance Period, the total return (based
on change in share price and taking into account reinvestment of any dividends)
of a Share.

       

      3.  Administration
of the Plan.

       

      (a) The
Committee shall be responsible for the general administration and interpretation
of the Plan. Subject to the limitations on Committee discretion imposed under
Section 162(m) and to the terms of the Plan, the Committee shall have such
powers as may be necessary to discharge its duties hereunder, including, but not
by way of limitation, the following powers and duties:

       

      
        	
                 
      

              	
                (i) 

              	
                to
      construe and interpret the terms of the Plan, and to determine eligibility
      and the amount, manner and time of payment of awards
      hereunder;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                to
      prescribe forms and procedures for purposes of Plan participation and
      payments of Actual Awards; and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                to
      adopt rules and regulations and to take such actions as it deems necessary
      or desirable for the proper administration of the
  Plan.

              


      

       

      (b) Any
rule or decision by the Committee that is not inconsistent with the provisions
of the Plan shall be conclusive and binding and shall be given the maximum
deference permitted by law.

       

      4.  Eligibility.
The Committee may, in its discretion, select the Employee(s) to be Participants
for any given Performance Period. The Committee, in its sole discretion, also
may designate as Participants one or more individuals (by name or position) who
are expected to become Employees during a Performance Period. Participation in
the Plan is in the sole discretion of the Committee, and on a Performance Period
by Performance Period basis. Accordingly, an Employee who is a Participant for a
given Performance Period in no way is guaranteed or assured of being selected
for participation in any subsequent Performance Period. Performance Periods may
be for different periods of time and may overlap for different
Participants.

       

      5.  Performance
Goals. For each Performance Period, the Committee shall establish on or
before the Determination Date and in a manner intended to comply with the “in
writing” requirements of Section 162(m), Performance Goals for each Participant.
The Committee may request or may be provided market data to substantiate the
appropriateness of the Performance Goal. Each Participant’s Actual Award shall
become payable only if the minimum level of achievement of the pre-established
Performance Goal(s) specified by the Committee are attained.

       

      6.  Award
Determination. For each Performance Period, the Committee, in its sole
discretion, shall establish on or before the Determination Date and in a manner
intended to comply with the “in writing” requirements of Section 162(m), a
Target Award for each Participant. Subject to the limitations set forth in
Sections 8(d) and 11, the Actual Award for each Participant shall be
determined by applying the Payout Formula to the level of actual performance
that has been certified by the Committee in accordance with
Section 8(a).

      
        
           

        

        
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      7.  Payout Formula
Determination.
On or prior to the Determination Date, the Committee, in its sole
discretion, shall establish a Payout Formula or Formulae for purposes of
determining the Actual Award (if any) payable to each Participant. The
Committee’s establishment of the Payout Formula or Formulae for any given
Performance Period shall be made on or before the Determination Date. Each
Payout Formula shall (a) evidenced in a manner intended to comply with the
“in writing” requirements of Section 162(m), (b) be based on a comparison
of actual performance to the Performance Goal(s), (c) provide for the
payment of a Participant’s Target Award if the Performance Goal(s) for the Plan
Year are achieved, and (d) if determined by the Committee, provide for an
Actual Award greater than or less than the Participant’s Target Award, depending
upon the extent to which actual performance exceeds or falls below the
Performance Goals; provided, however, that if not determined otherwise by the
Committee, a Participant’s Actual Award shall equal the Participant’s Target
Award if the actual Performance Goal(s) are exceeded and shall be zero if the
actual Performance Goal(s) are not achieved or exceeded. Notwithstanding the
preceding, in no event shall a Participant receive an Actual Award which would
cause the aggregate amount of all Actual Awards made to that Participant in any
period of three consecutive Plan Years to exceed the Maximum Award.

       

      8.  Award
Payment.

       

      (a) Certification.
The Committee shall certify in a manner intended to comply with the “in writing”
requirements of Section 162(m) the level of attainment of any Performance Goals
applicable to each Participant for a Performance Period prior to any payments
under this Plan.

       

      (b) Form
of Distributions. The Company shall distribute all Awards to the Participants in
a lump sum in cash, less applicable withholding.

       

      (c) Timing
of Distributions. Subject to Sections 8(d) and 11, the Company shall distribute
amounts payable to each Participant following the determination of the Award for
a Performance Period under Section 6 hereof. Unless specified otherwise by
the Committee or in a separate arrangement between the Company and the
Participant, in each case in a manner that is exempt from or compliant with
Section 409A, each Actual Award will be payable no later than March 15
of the year following the end of the Company’s fiscal year in which the Actual
Award, if any, is no longer subject to a “substantial risk of forfeiture” within
the meaning of Section 409A.  It is the intent of the Plan that
each award hereunder is subject to a “substantial risk of forfeiture” within the
meaning of Section 409A until the Actual Award is determined in accordance
with Section 6 and, to the extent the requirement for an employee to remain
employed through the payment date has not been waived pursuant to
Section 11(a), until the Actual Award is paid to the applicable
Participant. Each payment and
benefit payable under this Plan is intended to constitute a separate payment for
purposes of Section 1.409A-2(b)(2) of the regulations interpreting Section
409A.

       

      (d) Limitations.
The Committee may not increase an Actual Award, but may, in its sole discretion,
eliminate or decrease an Actual Award payable to any Participant below that
which otherwise would be payable under the Payout Formula.

       

      9.  Term of
Plan. The Plan
shall continue until terminated pursuant to Section 10.  The Plan
as amended May 14, 2009 shall first apply to Performance Periods beginning on or
after that date.

       

      10.  Amendment and
Termination of the Plan. The Committee may amend, modify, suspend or
terminate the Plan, in whole or in part, at any time, including the adoption of
amendments deemed necessary or desirable to correct any defect or to supply
omitted data or to reconcile any inconsistency in the Plan or in any Award
granted hereunder or to account for a change in the equity or capitalization
structure of the Company through merger, consolidation, reorganization,
recapitalization, spin-off, significant change in strategic direction or
otherwise; provided, however, that no amendment, alteration, suspension or
discontinuation shall be made which would impair any payments to any Participant
made prior to such amendment, modification, suspension or termination; provided
further, however, that in no event may such an amendment or modification result
in an increase in the amount of compensation payable pursuant to such award. At
no time before the actual distribution of funds to any Participant under the
Plan shall any Participant accrue any vested interest or right whatsoever under
the Plan except as otherwise stated in this Plan.

       

      11. Termination of
Employment.

       

      (a) In
the event that a Participant’s employment with the Company terminates by reason
of the Participant’s total and permanent disability or death, the Committee may,
in its sole discretion, pay to the Participant or the Participant’s
representative, as the case may be, all or a portion of the Actual Award for the
Performance Period in which such termination occurs; provided, that any such
payment shall be made no later than March 15 of the year immediately following
the Company’s fiscal year in which the Actual Award is no longer subject to a
“substantial risk of forfeiture” within the meaning of Section 409A.
Notwithstanding the foregoing, a separate arrangement between the Company and
the Participant or the Committee may provide for a different timing of
distribution that is exempt from or compliant with
Section 409A.

       

      (b) Except
as provided in Section 11(a), no award shall be paid to a Participant with
respect to a Performance Period if the Participant terminates employment before
the time of payment.

       

      12.  Withholding.
Distributions pursuant to this Plan shall be subject to all applicable federal,
state and other tax or similar withholding requirements.

       

      13.  Employment.
This Plan does not constitute a contract of employment or compensation or impose
on either the Participant or the Company any obligation to retain the
Participant as an employee. This Plan does not change the status of the
Participant as an employee at-will, the policies of the Company regarding
termination of employment, nor guarantee further continuing participation in the
Plan.

       

      14.  Successors.
The provisions of this Plan shall inure to the benefit of, and be binding upon,
the successors, assigns, heirs, executors and administrators of the parties
hereto.

      
        
           

        

        
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      15.  Nonassignment.
The rights of a Participant under this Plan shall not be assignable or
transferable by the Participant except by will or the laws of
intestacy.

       

      16.  Governing
Law. The Plan shall be construed in accordance with and governed by the
laws of the State of Delaware, but without regard to its conflict of law
provisions.

      



      
        
          
             

          

           


        

        
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