EX-10.1






CONEXANT SYSTEMS, INC.

2006 PEAK PERFORMANCE INCENTIVE PLAN




Section 1. Overview. The Peak Performance Incentive Plan (the “Plan”) may pay cash
bonuses (each, a “Bonus Award”) to select employees. Bonus Awards are paid annually. The amount
of a Bonus Award is based upon an employee’s Eligible Earnings, Bonus Target, performance during
the Performance Year, and the Incentive Pool made available for payments under the Plan for the
applicable Performance Year.



Section 2. Purpose. The Plan is designed to focus the efforts of certain employees of
Conexant Systems, Inc. and its subsidiaries (the “Company”) on the continued improvement in the
performance of the Company, and to aid in attracting, motivating and retaining superior employees
by providing an incentive and reward for those employees contributing to the performance of the
Company.



Section 3. Performance Year. The Plan is effective for the fiscal 2006 year beginning
October 1, 2005 and ending September 29, 2006 (the “Performance Year”).



Section 4. Eligibility. Those employees who are determined to be eligible to receive a
Bonus Award are called “Participants.”




	 	(a)	 	Eligible Participants. Except as specifically provided otherwise in this Plan, a
person must be employed by the company, on active status on the Company payroll, on salary
continuation, or on a formal leave of absence on or before June 30 and on the last day of
the Performance Year (except as provided in Sections 6 or 7 below) to be eligible for
participation in the Plan. A Participant may work either full-time or part-time as an
employee, as long as other eligibility criteria are met. Employees who are covered for
the full period of the Performance Year by the Sales Incentive program and employees that
are subject to a separate bonus plan (such as for a specific geographic location or line
of business) shall not be eligible to participate in the Plan.






	 	(b)	 	Determination of Participants. Prior to the beginning of the Performance Year,
or as soon as practicable thereafter, the Compensation Committee shall determine which
Executive Officers subject to SEC reporting (“Executive Officers”) are Participants and
the Chief Executive Officer and/or President shall determine which employees are eligible
to be Participants in the Plan. Additional Participants may be included during the
Performance Year and, as provided herein, an employee’s participation in the Plan may
terminate.





Section 5. Bonus Award. There is no minimum Bonus Award or guaranteed payment. A
Participant’s Bonus Award is calculated with reference to such Participant’s Bonus Target (as
defined below), that Participant’s performance for the Performance Year and the Incentive Pool (as
defined below) for the Performance Year.




(a) Bonus Targets.




	 	(1)	 	Each Participant has a target (the “Bonus Target”) stated as a percentage of
a Participant’s Eligible Earnings.






	 	(2)	 	Eligible Earnings refers only to amounts earned while a Participant is in the
Plan during the Performance Year. “Eligible Earnings” means all earnings, including
shift premiums, workweek premiums, and overtime (for U.S. salaried non-exempt
Employees only) paid during the Performance Year. The term “Eligible Earnings”
excludes incentive payments (such as FIRST program awards, sign-on bonuses, retention
bonuses, stock option exercises and vesting of restricted stock and performance
 shares), and excludes any payoffs for unused vacation, unused sick time, earnings from
workers’ compensation or any payments while an Employee is on suspension or
disciplinary time-off. For international employees, what is included in “Eligible
Earnings” may be adjusted by the company based on local law and payroll practices.






	 	(3)	 	The Compensation Committee establishes individual Bonus Targets for Executive
Officers. Bonus Targets for other employees are established by the Company’s Chief
Executive Officer and/or President in consultation with Human Resources.






	 	(b)	 	Determination of the Incentive Pool Amount. On or about the beginning of the
Performance Year, the Compensation Committee will establish the performance metric(s)
which, upon their achievement, would be taken into consideration when determining whether
or not to identify an amount available for payment of Bonus Awards under the Plan
(referred to as the “Incentive Pool”). The performance metric(s) will be set based on,
among other things, achievement of Company financial and business plans and achievement of
certain goals vs. the Company’s competitors. For fiscal year 2006, the Committee has
chosen achievement of certain operating profit goals as the primary performance metric for
determining the Incentive Pool. At the end of the Performance Year and closing of the
Company’s fiscal year financials, the Compensation Committee in its sole discretion may
identify an amount as the Incentive Pool, which amount may be greater than or less than
the amount determined solely by reference to the previously-established performance
metric(s). In exercising its discretion to determine whether to identify an Incentive
Pool amount, and, if so, in what amount, the Compensation Committee will consider all
circumstances then existing that it deems relevant, including, but not limited to, the
achievement of certain 2006 operating profit goals, market conditions, forecasts, and
anticipated expenses to be incurred or payable during the fiscal year.






	 	(c)	 	Determination of Bonus Award Amount.






	 	(1)	 	A Bonus Award is calculated with reference to: (i) a Participant’s Eligible
Earnings multiplied by that Participant’s Bonus Target (this is called the “Target
Award”), (ii) that Participant’s performance for the Performance Year, and (iii) the
Incentive Pool made available for Bonus Awards under the Plan for the Performance
Year.






	 	(2)	 	The amount of a Bonus Award to a Participant who is a Company Officer is
determined by the Compensation Committee. The amount of a Bonus Award to a
Participant who is not a Company Officer, is determined by the executive leader of a
Participant’s business unit or functional group and the Chief Executive Officer and/or
President. A Participant’s Bonus Award can be either greater than or less than
(including zero) a Participant’s Target Award.






	 	(3)	 	A Participant’s Bonus Award is linked to an assessment of a Participant’s
total job performance for the Performance Year. Factors that may be considered,
include but are not limited to, what a Participant does to advance Conexant’s success
and how a Participant does it, especially leadership, balance of short-term actions
with long-term goals, and resource allocation while prioritizing the needs of
customers, employees and stockholders.






	 	(4)	 	There is neither a minimum nor maximum amount of a Bonus Award that may be
paid to a Participant for the Performance Year. At Conexant’s discretion, a Bonus
Award amount may be prorated for those Participants who are eligible to participate in
the Plan for less than the full Performance Year; provided, however, all decisions
relating to Bonus Awards for Executive Officers must be made by the Compensation
Committee.






	 	(d)	 	Payment of Awards. To be eligible to receive a Bonus Award, a Participant must be
an employee in good standing and, on active status, receiving salary continuation or be on
a formal leave of absence at the time the Bonus Awards are distributed. As soon as
administratively practicable following the determination of a Participant’s Bonus Award or
within 2.5 months after the end of the performance year, such Bonus Award, less any
legally required withholding, shall be paid to a Participant (unless a Participant is on a
formal leave of absence) or, in the event of a Participant’s death, in accordance with
Section 6 hereof. If, at the time a Bonus Award is to be paid, a Participant is on a
formal leave of absence, a Participant shall receive his or her Bonus Award, if and when a
Participant returns to active status.





Section 6. Death of a Participant.




	 	(a)	 	Beneficiary. A Participant’s beneficiaries are those specified at the time of a
Participant’s death in a Participant’s will or a Participant’s heirs if a Participant does
not have a valid will. If a Participant dies prior to the date of any payment in
question, the amount otherwise payable shall be paid to a Participant’s beneficiary.






	 	(b)	 	Death during Performance Year. In case of a Participant’s death during the
Performance Year, the Company may pay a pro rata portion of the Bonus Award to which a
Participant would have been entitled for the Performance Year. Such pro rata portion
shall be equal to (i) the ratio which a Participant’s completed calendar months of
employment during the Performance Year bears to 12 multiplied by (ii) the amount to which
the Company determines a Participant would have been entitled, as determined in Section 5
herein, had a Participant continued in Active Status through the end of the Performance
Year.






	 	(c)	 	Death after Performance Year. In case of the death of a Participant after the
end of the Performance Year, but before the delivery of a Bonus Award to which he or she
may be entitled, such Bonus Award shall be delivered to a Participant’s beneficiary.





Section 7. Disability of Participant. In the event of a Participant’s Disability during
the Performance Year, a Participant shall become eligible for a portion of an Award, based on a pro
rata portion of the Performance Year represented by the time prior to the absence from work caused
by the Disability. Disability is the permanent and total disability of a person within the meaning
of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.



Section 8. Termination of Employment. Upon an employee’s termination during the
Performance Year for any reason other than those specified in Sections 6 or 7 hereof, such former
employee shall no longer be a Participant and shall not have any right to a Bonus Award under the
Plan.



Section 9. Miscellaneous




	 	(a)	 	Administration of the Plan. Except as otherwise required for the Executive
Officers under the Charter of the Compensation Committee, the Company’s Chief Executive
Officer and/or President have the sole discretion to: (i) adopt such rules, regulations,
agreements and instruments as it deems necessary to administer the Plan; (ii) interpret
the terms of the Plan; (iii) determine an employee’s eligibility under the Plan; (iv)
determine whether a Participant is to receive a Bonus Award under the Plan; (v) determine
the amount of any Bonus Award to a Participant; (vi) determine when a Bonus Award is to be
paid to a Participant; (vii) amend, suspend or terminate the Plan, without notice; and
(viii) take any and all other actions it deems necessary or advisable for the proper
administration of the Plan.






	 	(b)	 	Notification. A copy of this Plan shall be provided to each Participant upon
request. A Participant shall have no right to or interest in an Award unless and until a
Participant’s Award has been determined and paid to a Participant.






	 	(c)	 	Nature of the Plan. Whether to grant any Bonus Awards under this Plan, and in
what amounts, are under the Compensation Committee and management’s discretion.
Participation in this Plan is not intended, nor should it be interpreted, to create any
entitlement to participate in this or any future incentive plans or to receive the same or
similar incentive payments that may be received under this Plan. No Participant should
make any decision based on any hope or expectation of receiving any incentive under this
Plan. Nothing contained in nor will any action under the Plan confer upon any individual
any right to continue in the employment of the Company and does not constitute any
contract or agreement of employment or interfere in any way with the right of the Company
to terminate any individual’s employment.






	 	(d)	 	Termination and Notification. The Company may at any time modify, terminate or
from time to time, suspend and, if suspended, may reinstate the provisions of this Plan.






	 	(e)	 	Withholding Tax. As required by law, federal, state or local taxes that are
subject to the withholding of tax at the source shall be withheld by the Company as
necessary to satisfy such requirements.






	 	(f)	 	Award Limitations. Bonus Awards made under this Plan are not considered for the
purpose of calculating any extra benefits; any termination, severance, redundancy, or
end-of-service premium payments; other bonuses or long-service awards; overtime premiums;
pension or retirement benefits; or future base pay or any other payment to be made by the
Company to a Participant or former Participant.






	 	(g)	 	All Rights Reserved. The Company expressly reserves all rights and control over
the Plan. Although the Company expects that the Plan will continue, the Company may
change, amend, or terminate any provisions of the Plan, or the Plan itself, at any time,
in its sole discretion.






	 	(h)	 	Unfunded Plan. Nothing contained in this plan will be deemed to require the
Company to deposit, invest or set aside amounts for the payment of any Bonus Awards.
Participation in the Plan does not give a Participant any ownership, security, or other
rights in any assets of the Company.






	 	(i)	 	Applicable Law. The Plan will be governed by and construed in accordance with
the laws of the State of Delaware.






	 	(j)	 	Validity. In the event any provision of the Plan is held invalid, void, or
unenforceable, the same will not affect, in any respect whatsoever, the validity of any
other provision of the Plan.