exv10w2



 





EXHIBIT 10.2




International

Employee Stock

Purchase Plan




LSI LOGIC CORPORATION




Plan Document




Revision Date: February 2004





 









 







This International Employee Stock Purchase Plan must be read together with
the Country Addendum for the country in which you are employed. Where terms of
the Country Addendum are inconsistent with those stated in this document, the
terms of the Country Addendum shall govern.




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TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page

	Introduction
	 	 	1	 
	Eligibility
	 	 	2	 
	Who May Participate
	 	 	2	 
	Enrollment
	 	 	3	 
	Enrolling in the IESPP
	 	 	3	 
	How the Plan Works
	 	 	4	 
	Offering Period/Purchase Period
	 	 	4	 
	Purchase Date/Purchase Price
	 	 	4	 
	Determination of Fair Market Value
	 	 	5	 
	Examples
	 	 	5	 
	Automatic Re-Enrollment in Subsequent Offering Period
	 	 	6	 
	Automatic Early Transfer to a New Offering Period
	 	 	6	 
	Payroll Deductions
	 	 	7	 
	Confirm IESPP Changes and Enrollment
	 	 	7	 
	Exchange Rate
	 	 	8	 
	Limitations on Shares You May Purchase
	 	 	8	 
	Use of Excess Funds
	 	 	9	 
	Changing Your Contribution Level
	 	 	9	 
	E*TRADE OptionsLink Account
	 	 	9	 
	Activating Your E*TRADE OptionsLink and E*TRADE Brokerage Account
	 	 	9	 
	Deposit of Shares
	 	 	10	 
	Sale of Shares
	 	 	10	 
	Account Records
	 	 	11	 
	Report of Sales to LSI Logic
	 	 	11	 
	Employee Stock Purchase Transmittals
	 	 	11	 
	Withdrawing from the IESPP
	 	 	11	 
	Termination of Plan Participation/Participation While on a Leave of Absence
	 	 	12	 
	Designating Your Beneficiary
	 	 	12	 
	Nonassignability
	 	 	13	 
	Administration of the IESPP
	 	 	13	 
	Amendment and Termination of the IESPP
	 	 	13	 
	Capital Changes
	 	 	14	 
	Conditions upon Issuance of Company Common Stock
	 	 	14	 
	Designation of Employer Subsidiaries and Country Addendum
	 	 	14	 
	Third Party Fiduciaries
	 	 	15	 
	Notices
	 	 	15	 
	Tax Consequences
	 	 	16	 
	Tax Implications of Purchasing and Selling Your Company Common Stock
	 	 	16	 
	Withholding and Employee-Paid Social Insurance
	 	 	16	 
	Other Information
	 	 	17	 
	Obtaining Additional Information
	 	 	17	 







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Introduction



The Board of Directors of LSI Logic Corporation (the “Company”) has adopted the
International Employee Stock Purchase Plan (the “IESPP”) in order to provide
employees of designated LSI Logic subsidiaries with the opportunity to purchase
common stock of the Company at a below current market price through convenient
payroll deductions. If you decide to participate in the Plan, you can set aside
from 1% to 15% of your eligible compensation which will then be used to
purchase stock for you twice a year. Participation in the IESPP is voluntary.



As used in this IESPP, “Company Board” means the Board of Directors of the LSI
Logic Corporation. “Employer Subsidiary” means those subsidiaries of the
Company that have been designated by the Company as participants in the IESPP.
For more information about the Plan or its administration, you may contact the
LSI Logic Corporation Stock Administration Department, Mail Stop D-206, 1621
Barber Lane, Milpitas CA 95035, 1-408-433-6810.



IMPORTANT NOTE:



An effort has been made to have the terms of the IESPP apply to all IESPP
participants regardless of the country in which the participant is employed.
Notwithstanding that effort, certain different or additional terms may apply
for the IESPP as it applies to the country in which you are employed to
accommodate local requirements. Those terms are set forth in the Country
Addendum. Therefore, this document must be read together with the Country
Addendum that applies to your Employer Subsidiary. Where terms of your Country
Addendum are different from those stated in this document, the terms of the
Country Addendum shall apply.



This IESPP, together with the Country Addendum, if any, constitute part of a
prospectus covering securities that have been registered in the United States
under the Securities Act of 1933.





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Eligibility




Who May Participate




You qualify to participate in the IESPP if all of the following are true:





	•	 	You are working as a regular employee of an Employer Subsidiary.
	 
	•	 	You are regularly scheduled by an Employer Subsidiary to work for
more than 20 hours per week and more than five months in each calendar
year.
	 
	•	 	You do not own five percent or more of the total combined voting
power or value of all classes of stock of the Company or of any
subsidiary of the Company, and




Temporary employees and independent contractors providing services to the
Company are not eligible to participate, regardless of the length of such
service.



Participation in the Plan does not create a contract for employment or limit in
any way the right of the Company to terminate the participant’s employment at
any time, with or without cause, or confer on a participant any right to
continue in the employ of the Company.




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Enrollment




Enrolling in the IESPP



An eligible employee may become a participant in the IESPP by completing the
attached IESPP Subscription Agreement authorizing payroll deductions and
submitting it to your local Human Resource representative prior to an
Enrollment Date.



There are two Enrollment Dates each calendar year: May 15 and November 15.



Open enrollment is held during April and October before each Enrollment Date.



You must submit a completed IESPP Subscription Agreement during Open Enrollment
in order to participate as of the next Enrollment Date if:





	•	 	You are a new participant,
	 
	•	 	You are enrolling following a period of non-participation.




Your payroll deductions begin with the first payroll after the Enrollment Date.



New hires starting employment after the ESPP Open Enrollment Period and before
the beginning of the Offering Period can enroll up to and including the first
day of the Offering Period. The Subscription Agreement must be received no
later than the first day of the Offering Period.



If you miss the deadline for enrolling, you must wait until the next Open
Enrollment to enroll in the IESPP.





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How the Plan Works




Offering Period/Purchase Period




An Offering Period lasts for 12 months unless you:





	•	 	withdraw
	 
	•	 	cease to be an Eligible Employee, or
	 
	•	 	are automatically transferred to a new Offering Period.




Each 12-month Offering Period consists of two consecutive Purchase Periods of
six months each. Offering Periods begin either on May 15 or November 15.




Purchase Date/Purchase Price



A Purchase Date is the last trading day of each Purchase Period within an
Offering Period. The Purchase Dates will be the last trading day on or before
May 14 or November 14.



On each Purchase Date your payroll deductions accumulated during the Purchase
Period are used to automatically purchase the maximum number of whole shares of
Company common stock that you are entitled to purchase under the IESPP.



The Purchase Price you will pay for the stock purchased under the IESPP is equal to the lower of:





	Þ	 	85% of the fair market value of the Company common stock on the Enrollment Date; or
	 
	Þ	 	85% of the fair market value of the Company common stock on the Purchase Date.




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Determination of Fair Market Value



The fair market value of LSI Logic’s stock on a particular date is the closing
price of the stock on the New York Stock Exchange on that date in the United
States, as reported by the Wall Street Journal. However, if a closing price is
not available for a particular date, then the fair market value to be used for
that date will be the previous business day’s closing stock price. For
example, if the Enrollment date falls on a Saturday, the closing price of the
stock on the preceding Friday (or on the next preceding NYSE trading day, if
that Friday is not a business day) would be the fair market value on the
Enrollment Date.




Examples



The examples in this booklet are intended as illustrations only and are not
based on any actual or predicted value or performance of Company common stock.




Fair Market Value Higher on Purchase Date than on Enrollment Date



Let’s assume that the fair market value of Company common stock was US$8.00 per
share on the Enrollment Date. Assume that on a future Purchase Date in the
Offering Period, the fair market value of the common stock had risen to
US$10.00 per share.




As illustrated below, your Purchase Price would be US$6.80:




The lower of:




  85% x US$8.00= US$6.80 or

85% x US$10.00= US$8.50




Your Purchase Price is US$6.80




Fair Market Value Lower on Purchase Date than on the Enrollment Date



Let’s assume that the fair market value of Company common stock was US$8.00 per
share on the Enrollment Date. Assume that six months later the fair market
value of the Company common stock had decreased and the closing price of the
stock on the New York Stock Exchange on the Purchase Date was US$7.00 per
share.




As illustrated below, your Purchase Price would be US$5.95.




The lower of:




    85% x US$8.00= US$6.80 or

85% x US$7.00= US$5.95




Your Purchase Price is US$5.95





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Automatic Re-Enrollment in Subsequent Offering Period



A new Offering Period begins each May 15 and November 15; however, you may be
enrolled in only one Offering Period at a time. Once you have completed an
IESPP Subscription Agreement authorizing payroll deductions to initially enroll
in the IESPP, you will be re-enrolled automatically as a participant in future
Offering Periods when an Offering Period in which you are currently enrolled
ends UNLESS:





	•	 	You withdraw from participation
	 
	•	 	Your employment terminates
	 
	•	 	You become otherwise ineligible to participate in the IESPP, or your
participation has terminated for any other reason
	 
	•	 	Your Employer Subsidiary withdraws from the IESPP
	 
	•	 	The IESPP terminates





Automatic Early Transfer to a New Offering Period



If the fair market value of the Company common stock is lower on a Purchase
Date than it was on the Enrollment Date, you are automatically withdrawn from
that Offering Period immediately after you purchase shares on such Purchase
Date and automatically re-enrolled in the next Offering Period. The effect of
this is to automatically begin a new 12-month Offering Period.



For example, in the second example described above, the fair market value on
the Enrollment Date was US$8.00, but had declined to US$7.00 on the Purchase
Date. Regardless of where you are in the current 12-month Offering Period, you
would be automatically withdrawn from that Offering Period following your
purchase of shares and re-enrolled in the next Offering Period.



Your payroll deductions will continue at the same rate during the new Offering
Period as in the prior Offering Period unless you instruct your local Human
Resource representative otherwise by submitting an ESPP Change Form within the
deadlines.




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Payroll Deductions



You may contribute from 1% to 15% of your eligible compensation to the IESPP.
The percentage you deduct must be expressed in whole numbers. For purposes of
the IESPP, your eligible compensation includes all regular and recurring
straight time earnings, payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses, commissions, but exclusive of other
compensation. Unless otherwise expressly provided in your Company Addendum,
eligible compensation excludes:





	•	 	car allowances
	 
	•	 	transportation allowances
	 
	•	 	housing allowances
	 
	•	 	dependent allowances
	 
	•	 	one-time incentive payments
	 
	•	 	one-time recognition awards (dinner for two, bravo & winners circle awards, and cash substitute)
	 
	•	 	disability pay (other than short-term salary continuation)
	 
	•	 	other compensation




Unless otherwise required under the laws of your country, all payroll
deductions contributed by IESPP participants will be held by the Company or the
Employer Subsidiary’s in its general fund until such time as the stock is
purchased. In order for payroll deductions to be applied to a particular
purchase date, they must be from a payroll date that is more than three
business days before that purchase date. Also, once payroll deductions are
taken, there are no restrictions on the Company’s or Employer Subsidiary’s use
of such accumulated payroll deductions.



Stock deductions calculated on retroactive pay adjustments, will be included in
the purchase period when the retroactive adjustment is paid.



Confirm IESPP Changes and Enrollment



It is your responsibility to review your first paycheck after the effective
date of change or an initial enrollment to make sure your instructions were
carried out.



If you have a problem with any IESPP change or enrollment you must notify Stock
Administration no later than 45 days from the beginning of the Offering Period
and provide your original fax confirmation from your requested change or
enrollment. For the November 15th Offering Period, the last day to notify
Stock Administration of any IESPP change or enrollment problems is December
31st. For the May 15th Offering Period, the last day to notify Stock
Administration of any IESPP change or enrollment problems is June 30th.




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Exchange Rate



The exchange rate used for calculating the number of shares of stock to be
purchased with your payroll deductions is the NYSE Composite exchange rate
reported by Bloomberg Financial System using the closing rate on the last
Wednesday of the fiscal month ending closest to the Purchase Date.




Limitations on Shares You May Purchase



On each Enrollment Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase on
each Exercise Date during such Offering Period (at the applicable Purchase
Price) up to a number of full shares of the Company’s Common Stock determined
by dividing such Employee’s payroll deductions accumulated prior to such
Exercise Date and retained in the Employee’s account as of the Exercise Date by
the applicable Purchase Price; provided that in no event shall an Employee be
permitted to purchase more than 1,000 shares in each Purchase Period within
Offering Periods commencing in the year 2003, provided further that such
purchase shall be subject to the limitations set forth below. The Board may,
for future Offering Periods, increase or decrease, in its absolute discretion,
the maximum number of shares of the Company’s Common Stock an Employee may
purchase during each Purchase Period of such Offering Period.



No employee will be permitted to purchase shares under the IESPP, if,
immediately after enrollment, the employee would own five percent or more of
the total combined voting stock of LSI Logic or of any subsidiary of LSI Logic
(including stock which may be purchased through the IESPP or pursuant to stock
options).



No employee will be permitted to purchase shares under the IESPP or any other
employee stock purchase plans of LSI Logic or its subsidiaries having a value
of more than $25,000 (determined using the fair market value of the shares on
such employee’s Enrollment Date) in any calendar year. This means that your
annual payroll contributions cannot exceed US$21,250.



The Company Board initially reserved 300,000 shares of Company common stock for
purchase by all participants under the IESPP, then increased that amount by an
additional 300,000 shares in March 1999, those shares were adjusted for the
stock split in February 2000, then increased that amount by an additional
1,000,000 in August 2000, an additional 27,273 in Jan 2001, and an additional
1,000,000 in August 2002 for a total reserve of 3,227,273 shares. If the
total number of shares to be purchased on any Purchase Date exceeds the
remaining reserved shares then available under the IESPP, a pro rata allocation
of the available Company common stock will be made among the participants, and
the IESPP will terminate unless additional Company common stock are added to
the IESPP.



Additional limitations on the number of shares of Company common stock that an
employee may purchase apply for employees of certain Employer Subsidiaries.
Please refer to the applicable Country Addendum.




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Use of Excess Funds



Any contributions remaining in your account after the purchase has been made
for the current Purchase Date that are not sufficient to purchase a full share,
or exceed the amount required to purchase 1,000 shares, or exceed the $25,000
cap described above, will be refunded to you following the purchase of shares.



Changing Your Contribution Level



Once you are enrolled in the IESPP, you may reduce your contributions to a
lower level (but not below 1% of your eligible compensation) at any time.
Reducing your contribution level does not change your Purchase Price. To
reduce your contribution level, complete an ESPP Change Form and submit to your
local Human Resource representative showing the change in contribution level.



You may also increase your contribution level to a maximum of 15%. Increases
in your contribution level are only effective as of the beginning of a Purchase
Period. Increasing your contribution level does not change your Purchase
Price. To increase your contribution level, submit an ESPP Change Form to your
local Human Resource representative at least two weeks before the next Purchase
Period begins showing the change in contribution level.



The ESPP Change Form is available on the Stock Administration web site under
Planet LSI.



E*TRADE OptionsLink Account



The E*TRADE OptionsLink account is used for both the option program and the
Employee Stock Purchase Plan. For new IESPP participants, the OptionsLink
accounts are opened approximately 2 months prior to the purchase as long as you
are a current participant. E*TRADE will mail a welcome package to your home
once they receive the new account information from LSI Logic. In order to trade
you will need to complete the activation form and the form W-8BEN included in
the package and return to E*TRADE. If you have not received a welcome package
and you would like to activate your account so you can begin trading, then you
can follow the instructions below.



Activating Your E*TRADE OptionsLink and E*TRADE Brokerage Account



In order to begin trading in your E*TRADE OptionsLink account, the account
activation form and Form W-8BEN must be completed and received by E*TRADE. The
activation form and Form W-8BEN are included in the welcome package, or you can
login to www.optionslink.com and download these forms, or activate online which
is much faster. If you need assistance activating your account, call E*TRADE’s
International Customer Service number at 1-650-599-0125 and press “0”, # to
reach an operator. When your OptionsLink account is opened, an E*TRADE
Brokerage Account is automatically opened with it. There is no fee to activate
the E*TRADE Brokerage Account. When you sell shares from your OptionsLink
account the proceeds are deposited into your brokerage account. Your E*TRADE
Brokerage Account has no minimum balance, your funds earn interest, and you
have free check-writing privileges with funds in that account.




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Deposit of Shares



Shortly after the close of each Purchase Period, LSI Logic will deposit your
purchased shares into your E*TRADE OptionsLink Account. Once your shares have
been deposited to your account, you may sell them at any time.



Sale of Shares



After you have activated your E*TRADE OptionsLink Account, you can login to
your account at www.optionslink.com to sell your shares.



Or, call the Interactive Voice Response System at 1-650-599-0125 from outside
the U.S.



Each IESPP purchase with sellable shares is tracked individually. You choose
which IESPP shares you want to sell in your OptionsLink account. That sale will
then be reported to LSI for disposition tracking purposes. Such sales will be
subject to commission charges at competitive rates.



There are no brokerage account fees or inactivity fees for your E*TRADE
accounts. The schedule below applies to transactions for selling shares:




	 	 	 	 	 	 	 
	

	 	IESPP Sales
	 	$	19.95	 
	Additional Charges:	 	 	 	 
	

	 	Broker Assisted Sale
	 	$	35	 
	

	 	Check Via Mail
	 	$	5	 
	

	 	Check Via Federal Express
	 	$	20	 
	

	 	Wire Transfer
	 	$	25	 
	

	 	Hold proceeds in E*TRADE
	 	No Charge







These rates are effective March 2003 and are subject to change without notice.



Employees have the flexibility to determine when and how they receive proceeds
from a sale:





	•	 	Sweep the proceeds into your E*TRADE Brokerage account (this account
earns interest and has free check-writing capabilities)
	 
	•	 	Wire Transfer
	 
	•	 	Mail or Overnight a check




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Account Records



E*TRADE will provide each employee with a brokerage account statement
summarizing your account activity as well as written trade confirmations on all
executed orders. If there has been activity in your account, you will receive
a statement monthly; otherwise you will receive one quarterly, provided there
are assets in the account.



Report of Sales to LSI Logic



E*TRADE will provide LSI Logic with monthly reporting for all IESPP sales. For
more information regarding tax consequences of sale of shares acquired under
the IESPP see the applicable Country Addendum.



Employee Stock Purchase Transmittals



Twice a year, following each Purchase Date, you will receive an Employee Stock
Purchase Transmittal, from the Stock Administration Department at LSI Logic
which will detail the number of Company common stock purchased for you on the
preceding Purchase Date, the price paid per share and any remaining cash
balance in your account. The remaining cash balance will be refunded to you
following the purchase of shares.



Withdrawing from the IESPP



You may withdraw from the IESPP at any time by submitting an ESPP Change Form
to your local Human Resource representative of your Employer Subsidiary no
later than 30 days prior to the Purchase Date. The ESPP Change Form is
available on the Stock Administration web site under Planet LSI. Your
accumulated funds will be returned to you without interest unless the laws of
your country require otherwise as soon as practicable after your notice of
withdrawal has been received and processed. After withdrawal, you may not
re-enroll in the same Offering Period, although you may enroll in future
Offering Periods by completing an IESPP Subscription Agreement and submitting
it to your local Human Resource representative during a later enrollment
period.



If you re-enroll after withdrawal, your Purchase Price is determined on the
Enrollment Date of the new Offering Period.




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Termination of Plan Participation/Participation While on a Leave of Absence



Your eligibility to participate in an Offering Period under the IESPP is
dependent on your maintaining continuous status as a regular employee scheduled
to work at least 20 hours per week during the Offering Period. If the number
of hours you are scheduled to work drops below 20 hours per week, you will be
deemed to have withdrawn from the Plan.



However, generally you may continue to participate in the Plan during a leave
of absence which is approved by your Employer Subsidiary. Unless you receive
regular straight time earnings during a leave of absence you will not make
contributions to the IESPP during your leave. Contributions made to the IESPP
prior to an approved leave of absence will be used to purchase stock at the end
of the Purchase Period. Payroll deductions will resume at the time you return
to active status. If you wish to discontinue participation in the Plan you
must notify your local Human Resource representative as soon as you return to
active status.



If your employment with the Company or any of its subsidiaries terminates for
any reason prior to the last business day of the purchase period, then all
payroll deductions which you have contributed, but which have not yet been used
to purchase stock, will be returned to you without interest.



Notwithstanding the above, your transfer from one Employer Subsidiary to
another Employer Subsidiary or to the parent Company shall not alone be
considered a break in your continuous status as a regular employee. In the
event of such a transfer, however, your participation in the IESPP would be
subject to the Country Addendum applicable to your new Employer Subsidiary or
to the terms of the Company Employee Stock Purchase Plan if to the parent
Company.



Designating Your Beneficiary



You may designate one or more beneficiaries in your IESPP Subscription
Agreement to receive your unused payroll deductions in the event of your death,
which will be paid without interest, unless required by local law. You Per
Compensation Committee approval on 2/12/04, the reference to the beneficiary’s
ability to purchase shares remaining in deceased employee’s account was
deleted.may change your beneficiary at any time by submitting a revised IESPP
Subscription Agreement to your local Human Resource representative of your
Employer Subsidiary. If no living beneficiary is designated, payment of
contributions or delivery of the share certificate, as the case may be, will be
made to your estate.



Laws governing the disposition of decedent’s property vary widely from country
to country. It is highly recommended that you consult with your own
independent legal counsel to make certain that you have taken all necessary
steps to ensure that your desired disposition of undistributed Company common
stock and payroll deductions in the event of your death can be accomplished.




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Nonassignability



Unless where otherwise required under local law, none of your rights or
accumulated payroll deductions under the IESPP may be pledged, assigned,
transferred or otherwise disposed of for any reason (other than by will or the
laws of descent and distribution). Any such attempt may be treated by the
Company as an election to withdraw from the IESPP.



Administration of the IESPP



The IESPP is currently administered by the Company Board. All questions of
interpretation or application of the IESPP are determined in the sole
discretion of the Company Board (or its duly authorized committee) and its
decisions are final and binding upon all participants. Members of the Board who
are eligible employees are permitted to participate in the Plan but may not
vote on any matter affecting the administration of the Plan. No member of the
Board who is eligible to participate in the Plan may be a member of the
committee appointed by the Board to administer the Plan. No charges for
administrative or other costs may be made against the payroll deductions of a
participant in the IESPP. Members of the Board of Directors receive no
additional compensation for their services in connection with the
administration of the IESPP.



Subject to such rules, procedures and instructions as may be adopted by the
Company Board, each participating Employer Subsidiary shall be responsible for
making all payroll deductions (including related withholding and social
insurance contributions) for its participating employees, for filing and
distributing all reports and disclosures that may be required under local law,
and for otherwise ensuring compliance with all applicable local laws relating
to administration of the IESPP.



Amendment and Termination of the IESPP



The Company Board may at any time amend or terminate the IESPP or any
particular Country Addendum, or withdraw an Employer Subsidiary from the IESPP,
except that such amendment or termination will not adversely affect your
participation in an Offering Period for which you are already enrolled. Without
regard to whether any participant rights may be considered to have been
“adversely affected,” the Company Board shall be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Company common stock for each participant properly
correspond with amounts withheld from the participant’s compensation and
establish such other limitations or procedures as the Company Board determines
in its sole discretion advisable which are consistent with the IESPP.




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Capital Changes



If the number of Company common stock outstanding is increased or decreased by
way of stock split, stock dividend or otherwise (but not including conversion
of any convertible debentures), appropriate adjustments will be made in the
number of shares subject to purchase under the IESPP and in the Purchase Price
per share.



In the event of the proposed dissolution or liquidation of the Company, the
Offering Period then in progress will terminate immediately prior to such
dissolution or liquidation unless otherwise provided by the Company Board. In
the event of the proposed sale of all or substantially all of the assets of the
Company or the merger of the Company with or into another corporation, each
participant’s rights under the IESPP will be assumed or an equivalent right
will be substituted by the successor corporation, unless the Company Board
determines, in its discretion, to accelerate the Purchase Date(s) for all
current participants.



The Company Board, may also make provisions for adjusting the number of shares
subject to the IESPP and the Purchase Price per share in the event the Company
effects one or more reorganizations, recapitalizations, right’s offerings or
other increases or reductions of shares of the Company’s outstanding common
stock.



Conditions upon Issuance of Company Common Stock



Company common stock shall not be issued to you under this IESPP unless the
exercise of your option to purchase such Company common stock and the issuance
and delivery of such Company common stock pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Company common stock may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.



Designation of Employer Subsidiaries and Country Addendum



The Company Board may designate any subsidiary of the Company as a
participating Employer Subsidiary in the IESPP. The Company Board may, in
addition, modify one or more provisions of the IESPP solely as it applies to
such Employer Subsidiary. The applicable modified Country Addendum shall be
attached to the copy of the IESPP distributed to the Eligible Employees of the
applicable Employer Subsidiary.




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Third Party Fiduciaries



Certain countries may prohibit employees from directly owning Company common
stock purchased on their behalf under the IESPP. If local law so requires or
if the Company Board determines that distribution of proceeds could not be
accomplished without undue liability or expense to either the Company or your
Employer Subsidiary, your Employer Subsidiary may provide for maintenance of
the accounts with a third party fiduciary for your benefit. Please refer to
your applicable Country Addendum to determine whether such arrangements apply
to you.



Notices



Any notice or other communication from you to the Company in connection with
the IESPP shall be considered properly given only if and when it is received in
the form specified by the Company at the following location:




	 	 	 
	

	 	LSI Logic Corporation
	

	 	Stock Administration
	

	 	1621 Barber Lane
	

	 	Mail Stop D-206
	

	 	Milpitas, California 95035






Any notice or other communication from you to your Employer Subsidiary in
connection with the IESPP shall be considered properly given only if and when
it is received in the form specified by the Employer Subsidiary at the location
designated in the attached Country Addendum.



The Employer Subsidiary and the Company may at any time change such notice
addresses upon prior written notice to you.




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Tax Consequences




Tax Implications of Purchasing and Selling Your Company Common Stock



The Country Addendum applicable to you provides a brief summary of general
rules regarding the tax consequences in the country in which you are employed.
The Country Addendum does not purport to be a complete description of all tax
implications of participation in the IESPP, nor does it purport to discuss the
income tax implications of the IESPP under the laws of each state, province,
district or local government in which you may reside or otherwise be subject to
tax.




Withholding and Employee-Paid Social Insurance



Certain countries treat as taxable compensation the excess of the fair market
value of the Company common stock on the Purchase Date over the Purchase Price.
Certain countries also treat as taxable gain some or all of the excess, if
any, of the sale price over the fair market value of the Company common stock
as of the Purchase Date. (See your applicable Country Addendum for more
information.)



Some of those countries also require that the Employer Subsidiary withhold and
remit sums on behalf of the employee in respect of income taxes and/or social
insurance contributions. Any income, social or other taxes imposed on you for
the income arising from your participation in this IESPP will be your
responsibility.



The means by which this tax is satisfied will require that you pay all sums to
the Employer Subsidiary upon the purchase of Company common stock under the
IESPP, regardless of when you sell all or a portion of the Company common
stock. The attached Country Addendum will describe the mechanism by which such
economic burden is passed to you.



You are strongly urged to consult your own tax advisor concerning the
application of the various tax laws that may apply to your particular
situation.




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Other Information




Obtaining Additional Information



Upon written or oral request to the Company, you may obtain copies, without
charge, of any of the following documents, which are incorporated by reference:





	•	 	The Company’s Annual Report on Form 10-K for the most recent fiscal
year;
	 
	•	 	The Company’s definitive Proxy Statement for the Company’s most
recent Annual Meeting of Stockholders;
	 
	•	 	The Company’s Quarterly Report(s) on Form 10-Q for the quarter(s)
ended since the end of the Company’s most recent fiscal year;
	 
	•	 	The description of the Company common stock contained in the
Company’s Registration Statement on Form 8-A filed with the Securities
and Exchange Commission of August 29, 1989;
	 
	•	 	All documents filed by the Company pursuant to Sections 13, 14 and
15(d) of the Securities Exchange Act of 1934 after the date of the
Registration Statement under which securities described herein are
registered.




In addition, upon written or oral request to the Company, you may obtain a
copy, without charge, of the Company’s most recent Annual Report to
Stockholders.



Requests for any of the documents described above should be directed to:




	 	 	 
	

	 	LSI Logic Corporation
	

	 	Investor Relations
	

	 	1621 BarberLane.
	

	 	Mail Stop D-115
	

	 	Milpitas, California 95035
	

	 	Phone 01 408 433 6777






For further information concerning the IESPP, contact the LSI Logic Corporation
Stock Administration Department.





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