Document:

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                                                                     Exhibit 4.2

                          REGISTRATION RIGHTS AGREEMENT

                                     BETWEEN

                              LSI LOGIC CORPORATION

                                       AND

                              LEHMAN BROTHERS INC.

                          DATED AS OF OCTOBER 30, 2001

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        REGISTRATION RIGHTS AGREEMENT, dated as of October 30, 2001, between LSI
Logic Corporation, a Delaware corporation (together with any successor entity,
herein referred to as the "COMPANY"), and Lehman Brothers Inc., as initial
purchaser (the "INITIAL PURCHASER") under the Purchase Agreement (as defined
below).

        Pursuant to the Purchase Agreement, dated as of October 24, 2001,
between the Company and the Initial Purchaser (the "PURCHASE AGREEMENT"), the
Initial Purchaser has agreed to purchase from the Company $450,000,000
($517,500,000 if the Initial Purchaser exercises its option in full) in
aggregate principal amount of 4.00% Convertible Subordinated Notes due 2006 (the
"SECURITIES"). The Securities initially may be convertible into fully paid,
nonassessable shares of common stock, par value $0.01 per share, of the Company
on the terms, and subject to the conditions, set forth in the Indenture (as
defined herein). To induce the Initial Purchaser to purchase the Securities, the
Company has agreed to provide the registration rights set forth in this
Agreement pursuant to Section 1 of the Purchase Agreement.

        The parties hereby agree as follows:

        1. Definitions. As used in this Agreement, the following capitalized
terms shall have the following meanings:

        "ADDITIONAL INTEREST": As defined in Section 3(a) hereof.

        "ADDITIONAL INTEREST PAYMENT DATE": Each May 1 and November 1.

        "AFFILIATE": The definition of "Affiliate" in the Indenture.

        "AGREEMENT": This Registration Rights Agreement, as amended, modified or
otherwise supplemented from time to time.

        "BLUE SKY APPLICATION": As defined in Section 6(a) hereof.

        "BUSINESS DAY": The definition of "Business Day" in the Indenture.

        "COMMISSION": Securities and Exchange Commission.

        "COMMON STOCK": The definition of "Common Stock" in the Indenture.

        "COMPANY": As defined in the preamble hereto.

        "EFFECTIVENESS PERIOD": As defined in Section 2(a)(iii) hereof.

        "EFFECTIVENESS TARGET DATE": As defined in Section 2(a)(ii) hereof.

        "EXCHANGE ACT": Securities Exchange Act of 1934, as amended.

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        "HOLDER": A Person who owns, beneficially or otherwise, Transfer
Restricted Securities.

        "HOLDER QUESTIONNAIRE": As defined in Section 2(b) hereof.

        "INDEMNIFIED HOLDER": As defined in Section 6(a) hereof.

        "INDENTURE": The Indenture, dated as of October 30, 2001 between the
Company and State Street Bank and Trust Company of California, N.A., as trustee
(the "TRUSTEE"), pursuant to which the Securities are to be issued, as such
Indenture is amended, modified or supplemented from time to time in accordance
with the terms thereof.

        "INITIAL PURCHASER": As defined in the preamble hereto.

        "MAJORITY OF HOLDERS": Holders holding over 50% of the aggregate
principal amount of Transfer Restricted Securities outstanding; provided,
however that in determining whether Transfer Restricted Securities are
outstanding, Transfer Restricted Securities held for the account of the Company
or of any of its Affiliates shall be disregarded; provided, further that for
purpose of this definition, a holder of shares of Common Stock that constitute
Transfer Restricted Securities when issued upon conversion of the Securities
shall be deemed to hold an aggregate principal amount of Securities (in addition
to the principal amount of Securities held by such holder) equal to the quotient
of (x) the number of such shares of Common Stock received upon conversion of the
Securities and then held by such holder and (y) the conversion rate(s) in effect
at the time such Holder converted Securities into such shares of Common Stock as
determined in accordance with the Indenture.

        "NASD": National Association of Securities Dealers, Inc.

        "PERSON": An individual, partnership, corporation, company,
unincorporated organization, trust, joint venture or a government or agency or
political subdivision thereof.

        "PURCHASE AGREEMENT": As defined in the preamble hereto.

        "PROSPECTUS": The prospectus included in a Shelf Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.

        "QUESTIONNAIRE DEADLINE": As defined in Section 2(b) hereof.

        "RECORD HOLDER": With respect to any Additional Interest Payment Date,
each Person who is a Holder on the Register on the April 15 or October 15
immediately preceding the relevant Additional Interest Payment Date. In the case
of a Holder of shares of Common Stock issued upon conversion of the Securities,
"Record Holder" shall mean each Person who is a Holder of shares of Common Stock
which constitute Transfer

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Restricted Securities on the April 15 or October 15 immediately preceding the
relevant Additional Interest Payment Date.

        "REGISTER": The definition of "Register" in the Indenture.

        "REGISTRAR": The definition of "Registrar" in the Indenture.

        "REGISTRATION DEFAULT": As defined in Section 3(a) hereof.

        "SALE NOTICE": As defined in Section 4(e) hereof.

        "SECURITIES": As defined in the preamble hereto.

        "SECURITIES ACT": Securities Act of 1933, as amended.

        "SHELF FILING DEADLINE": As defined in Section 2(a)(i) hereof.

        "SHELF REGISTRATION STATEMENT": As defined in Section 2(a)(i) hereof.

        "SUSPENSION NOTICE". As defined in Section 4(c) hereof.

        "SUSPENSION PERIOD". As defined in Section 4(b)(i) hereof.

        "TIA": Trust Indenture Act of 1939, as amended, the rules and
regulations of the Commission thereunder, in each case, as in effect on the date
the Indenture is qualified under the TIA.

        "TRANSFER RESTRICTED SECURITIES": Each Security and each share of Common
Stock issued upon conversion of Securities for which a Holder has submitted its
Holder Questionnaire by the Questionnaire Deadline until the earliest of:

                (i) the date on which such Security or such share of Common
        Stock issued upon conversion thereof has been effectively registered
        under the Securities Act and disposed of in accordance with the Shelf
        Registration Statement;

                (ii) the date on which such Security or such share of Common
        Stock issued upon conversion thereof is transferred in compliance with
        Rule 144 under the Securities Act or may be sold or transferred by a
        person who is not an affiliate of the Company pursuant to Rule 144 under
        the Securities Act (or any other similar provision then in force)
        without any volume or manner of sale restrictions thereunder; or

                (iii) the date on which such Security or such share of Common
        Stock issued upon conversion ceases to be outstanding (whether as a
        result of redemption, repurchase and cancellation, conversion or
        otherwise).

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        UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which Transfer Restricted Securities are sold to an underwriter for reoffering
to the public pursuant to the Shelf Registration Statement.

        Unless the context otherwise requires, the singular includes the plural,
and words in the plural include the singular.

        2. Shelf Registration

        (a) The Company shall:

                (i) not later than 90 days after the date hereof (the "SHELF
        FILING DEADLINE"), cause to be filed a registration statement pursuant
        to Rule 415 under the Securities Act (the "SHELF REGISTRATION
        STATEMENT"), which Shelf Registration Statement shall provide for
        resales of all Transfer Restricted Securities held by Holders that have
        provided the information required pursuant to the terms of Section 2(b)
        hereof;

                (ii) use its reasonable efforts to cause the Shelf Registration
        Statement to be declared effective by the Commission not later than 180
        days after the date hereof (the "EFFECTIVENESS TARGET DATE"); and

                (iii) use its reasonable efforts to keep the Shelf Registration
        Statement continuously effective, supplemented and amended as required
        by the provisions of Section 4(b) hereof (and subject to the right of
        the Company to suspend the use of the Shelf Registration Statement by
        delivery of a Suspension Notice in accordance with Section 4(b)(i)
        hereof) to the extent necessary to ensure that (A) it is available for
        resales by the Holders of Transfer Restricted Securities entitled,
        subject to Section 2(b), to the benefit of this Agreement and (B) it
        conforms with the requirements of this Agreement and the Securities Act
        and the rules and regulations of the Commission promulgated thereunder
        as announced from time to time, for a period (the "EFFECTIVENESS
        PERIOD") until the earliest of:

                        (1) two years following the last date of original
                issuance of any of the Securities; or

                        (2) the date when the Holders of Transfer Restricted
                Securities are able to sell all such Transfer Restricted
                Securities immediately without restriction pursuant to the
                volume limitation provisions of Rule 144 under the Securities
                Act; and

                        (3) the date when all of the Transfer Restricted
                Securities of those Holders that complete and deliver in a
                timely manner the Holder Questionnaire described below are
                registered under the Shelf Registration Statement and disposed
                of in accordance with the Shelf Registration Statement.

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        (b) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in the Shelf Registration Statement pursuant to
this Agreement unless such Holder furnishes to the Company in writing, prior to
or on the 20th Business Day after the date of the Holder Questionnaire (or, in
the case of a Holder that is a transferee of Transfer Restricted Securities,
prior to or on the earlier of (i) the 20th business day after the completion of
such transfer to the transferee and (ii) 9:00 a.m., San Francisco time, on the
second Business Day before the effectiveness of the Shelf Registration
Statement) (the "QUESTIONNAIRE DEADLINE"), such information as the Company may
reasonably request for use in connection with the Shelf Registration Statement
or Prospectus or preliminary Prospectus included therein and in any application
to be filed with or under state securities laws (the form of which request is
attached as Annex A to the offering memorandum dated October 24, 2001 regarding
the sale of the Securities to the Initial Purchaser and is referred to herein as
the "HOLDER QUESTIONNAIRE"). In connection with all requests for information
from Holders of Transfer Restricted Securities with respect to inclusion of
Transfer Restricted Securities in the Shelf Registration Statement, the Company
shall notify such Holders of the requirements set forth in the preceding
sentence. The Company agrees and undertakes that (i) it shall distribute a
Holder Questionnaire no later than 20 Business Days prior to the effectiveness
of the Shelf Registration Statement to each Holder at the address set forth on
the Register of Securities maintained by the Registrar of the Securities or the
records of the transfer agent of the Common Stock at such time, and (ii) upon
the request of any Holder prior to 9:00 a.m., San Francisco time, on the second
Business Day before the effectiveness of the Shelf Registration Statement, the
Company shall distribute a Holder Questionnaire to such Holder at the address
set forth in such request. Holders that do not complete the Holder Questionnaire
and timely deliver it to the Company shall not be named as selling
securityholders in the Prospectus or preliminary Prospectus included in the
Shelf Registration Statement and therefore shall not be permitted to sell any
Transfer Restricted Securities pursuant to the Shelf Registration Statement.
Notwithstanding the foregoing, upon request from a Holder that did not return a
Holder Questionnaire on a timely basis because it was a subsequent transferee of
Transfer Restricted Securities after the company distributed the Holder
Questionnaire, (i) the Company shall distribute a Holder Questionnaire to such
Holder at the address set forth in the request and (ii) upon receipt of a
properly completed Holder Questionnaire from such Holder, the Company shall use
its reasonable efforts to name such Holder as a selling securityholder by means
of a pre-effective amendment or, if permitted by the Commission, by means of a
Prospectus supplement to the Shelf Registration Statement; provided, however,
that the Company shall have no obligation to pay Additional Interest to such
Holder for its failure to file a pre-effective amendment or Prospectus
supplement. Each Holder as to which the Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make information previously furnished to the Company by
such Holder not materially misleading.

        NO HOLDER OF TRANSFER RESTRICTED SECURITIES SHALL BE ENTITLED TO
ADDITIONAL INTEREST PURSUANT TO SECTION 3 HEREOF UNLESS SUCH HOLDER SHALL HAVE
PROVIDED ALL SUCH REASONABLY REQUESTED INFORMATION PRIOR TO OR ON THE
QUESTIONNAIRE DEADLINE.

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        3. Additional Interest.

        (a) If:

                (i) the Shelf Registration Statement is not filed with the
        Commission prior to or on the Shelf Filing Deadline;

                (ii) the Shelf Registration Statement has not been declared
        effective by the Commission prior to or on the Effectiveness Target
        Date;

                (iii) except as provided in Section 4(b)(i) hereof, the Shelf
        Registration Statement is filed and declared effective but, during the
        Effectiveness Period, shall thereafter cease to be effective or fail to
        be usable for its intended purpose without being succeeded within five
        Business Days by a post-effective amendment to the Shelf Registration
        Statement, a supplement to the Prospectus or a report filed with the
        Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
        Act that cures such failure and, in the case of a post-effective
        amendment, is itself immediately declared effective; or

                (iv) (A) prior to or on the 45th or 60th day, as the case may
        be, of any Suspension Period, such suspension has not been terminated or
        (B) Suspension Periods exceed an aggregate of 90 days in any 360 day
        period,

(each such event referred to in foregoing clauses (i) through (iv), a
"REGISTRATION DEFAULT"), the Company hereby agrees to pay liquidated damages in
the form of additional interest ("ADDITIONAL INTEREST") with respect to the
Transfer Restricted Securities from and including the day following the
Registration Default to but excluding the earlier of (1) the day on which the
Registration Default has been cured and (2) the date the Shelf Registration
Statement is no longer required to be kept effective, accruing at a rate:

                (A) in respect of the Securities, to each holder of Securities,
        (x) with respect to the first 90-day period during which a Registration
        Default shall have occurred and be continuing, equal to 0.25% per annum
        of the principal amount of the Securities, and (y) with respect to the
        period commencing on the 91st day following the day the Registration
        Default shall have occurred and be continuing, equal to 0.50% per annum
        of the principal amount of the Securities; provided that in no event
        shall Additional Interest accrue at a rate per year exceeding 0.50% of
        the principal amount of the Securities; and

                (B) in respect of any shares of Common Stock, to each holder of
        shares of Common Stock issued upon conversion of Securities, (x) with
        respect to the first 90-day period in which a Registration Default shall
        have occurred and be continuing, equal to 0.25% per annum of the
        principal amount of the converted Securities, and (y) with respect to
        the period commencing the 91st day following the day the Registration
        Default shall have occurred and be continuing, equal to 0.50% per annum
        of the principal amount of the converted Securities; provided that in no
        event shall Additional Interest accrue at a rate per year exceeding
        0.50% of the principal amount of the converted Securities.

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        (b) All accrued Additional Interest shall be paid in arrears to Record
Holders by the Company on each Additional Interest Payment Date in the same
manner as the payment of interest on the Securities. Upon the cure of all
Registration Defaults relating to any particular Security or share of Common
Stock, the accrual of Additional Interest with respect to such Security or share
of Common Stock will cease. The Company agrees to deliver all notices,
certificates and other documents contemplated by the Indenture in connection
with the payment of Additional Interest.

        Notwithstanding any other provision of this Agreement, no Additional
Interest shall accrue as to any Transfer Restricted Security from and after the
earlier of the date such security is no longer a Transfer Restricted Security
and the expiration of the Effectiveness Period. All obligations of the Company
set forth in this Section 3 that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such Transfer Restricted Security shall have been satisfied in full.

        The parties hereto agree that the Holders of Transfer Restricted
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if a Registration Default were to
occur. The parties hereto further agree that the Additional Interest provided
for in this Section 3 constitutes a reasonable estimate of the damages that may
be incurred by Holders of Transfer Restricted Securities by reason of a
Registration Default. Therefore, the parties hereto agree that the sole damages
payable for a violation of the terms of this Agreement with respect to which
Additional Interest is expressly provided for (including any non-compliance with
a covenant that results, directly or indirectly, in a Registration Default)
shall be such Additional Interest.

        4. Registration Procedures.

        (a) In connection with the Shelf Registration Statement, the Company
shall comply with all the provisions of Section 4(b) hereof and shall use its
reasonable efforts to effect such registration to permit the sale of the
Transfer Restricted Securities, and pursuant thereto, shall prepare and file
with the Commission a Shelf Registration Statement relating to the registration
on any appropriate form under the Securities Act.

        (b) In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the Company shall:

                (i) Subject to any notice by the Company in accordance with this
        Section 4(b) of the existence of any fact or event of the kind described
        in Section 4(b)(iii)(D) and the Company's right to invoke a Suspension
        Period in the manner described in this Section 4(b)(i), use its
        reasonable efforts to keep the Shelf Registration Statement continuously
        effective during the Effectiveness Period; upon the occurrence of any
        event that would cause the Shelf Registration Statement or the
        Prospectus contained therein (A) to contain a material misstatement or
        omission or (B) not be effective and usable for resale of Transfer
        Restricted Securities during the Effectiveness Period, unless a
        Suspension Period

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        is then in effect, the Company shall file promptly an appropriate
        amendment to the Shelf Registration Statement, a supplement to the
        Prospectus or a report filed with the Commission pursuant to Section
        13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case of clause
        (A), correcting any such misstatement or omission, and, in the case of
        either clause (A) or (B), use its reasonable efforts to cause such
        amendment to be declared effective and the Shelf Registration Statement
        and the related Prospectus to become usable for their intended purposes
        as soon as practicable thereafter. Notwithstanding the foregoing, the
        Company may suspend the effectiveness of the Shelf Registration
        Statement by written notice to the Holders for a period not to exceed an
        aggregate of 45 days in any 90-day period or 90 days in any 360-day
        period (each such period, a "SUSPENSION PERIOD") if:

                        (x) an event occurs and is continuing as a result of
                which the Shelf Registration Statement, the Prospectus, any
                amendment or supplement thereto, or any document incorporated by
                reference therein would, in the Company's judgment, contain an
                untrue statement of a material fact or omit to state a material
                fact required to be stated therein or necessary to make the
                statements therein not misleading; and

                        (y) the Company reasonably determines that the
                disclosure of such event at such time would have a material
                adverse effect on the Company and its subsidiaries taken as a
                whole;

        provided that, in the event the disclosure relates to a previously
        undisclosed proposed or pending material business transaction, the
        disclosure of which the Company determines in good faith would be
        reasonably likely to impede the Company's ability to consummate such
        transaction, the Company may extend the 45-day Suspension Period from 45
        days to 60 days. The Company shall not be required to specify in the
        written notice to the Holders the nature of the event giving rise to the
        Suspension Period.

                (ii) Prepare and file with the Commission such amendments and
        post-effective amendments to the Shelf Registration Statement as may be
        necessary to keep the Shelf Registration Statement effective during the
        Effectiveness Period; cause the Prospectus to be supplemented by any
        required Prospectus supplement, and as so supplemented to be filed
        pursuant to Rule 424 (it being understood that, subject to the
        circumstances set forth in the penultimate sentence of each of Sections
        2(b) and 4(d), the Company shall not be required to file a prospectus
        supplement pursuant to 424(b) with respect to any Holder that failed to
        submit its Holder Questionnaire by the Questionnaire Deadline) under the
        Securities Act, and to comply fully with the applicable provisions of
        Rules 424 and 430A under the Securities Act in a timely manner; and
        comply with the provisions of the Securities Act with respect to the
        disposition of all securities covered by the Shelf Registration
        Statement during the applicable period in accordance with the intended
        method or methods of distribution by the sellers thereof set forth in
        the Shelf Registration Statement or supplement to the Prospectus.

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                (iii) Advise in writing the underwriter(s), if any, and the
        selling Holders promptly (in the case of Holders, at the address set
        forth on the Register of Securities maintained by the Registrar of the
        Securities or the records of the transfer agent of the Common Stock at
        such time) of each of the following:

                        (A) when the Prospectus or any Prospectus supplement or
                post-effective amendment has been filed, and, with respect to
                the Shelf Registration Statement or any post-effective amendment
                thereto, when the same has become effective,

                        (B) any request by the Commission for amendments to the
                Shelf Registration Statement or amendments or supplements to the
                Prospectus or for additional information relating thereto,

                        (C) the issuance by the Commission of any stop order
                suspending the effectiveness of the Shelf Registration Statement
                under the Securities Act or of the suspension by any state
                securities commission of the qualification of the Transfer
                Restricted Securities for offering or sale in any jurisdiction,
                or the initiation of any proceeding for any of the preceding
                purposes, or

                        (D) the existence of any fact or the happening of any
                event, during the Effectiveness Period (but not as to the
                substance of any such fact or event), that makes any statement
                of a material fact made in the Shelf Registration Statement, the
                Prospectus, any amendment or supplement thereto, or any document
                incorporated by reference therein untrue, or that requires the
                making of any additions to or changes in the Shelf Registration
                Statement or the Prospectus in order to make the statements
                therein not misleading (provided, however, that no notice by the
                Company shall be required pursuant to this clause (D) in the
                event that the Company either promptly files a Prospectus
                supplement to update the Prospectus or a Form 8-K or other
                appropriate Exchange Act report that is incorporated by
                reference into the Shelf Registration Statement, which, in
                either case, contains the requisite information with respect to
                such material event that results in such Shelf Registration
                Statement no longer containing any such untrue or misleading
                statements).

        If at any time the Commission shall issue any stop order suspending the
        effectiveness of the Shelf Registration Statement, or any state
        securities commission or other regulatory authority shall issue an order
        suspending the qualification or exemption from qualification of the
        Transfer Restricted Securities under state securities or Blue Sky laws,
        the Company shall use its reasonable efforts to promptly obtain the
        withdrawal or lifting of such order and will provide to each Holder (in
        the case of Holders, at the address set forth on the Register of
        Securities maintained by the Registrar of the Securities or the records
        of the transfer agent of the Common Stock at such time) who is named in
        the Shelf Registration Statement prompt notice of the withdrawal of any
        such order.

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                (iv) If requested by any selling Holders or the underwriter(s),
        if any, incorporate in the Shelf Registration Statement or Prospectus,
        pursuant to an amendment prior to effectiveness if necessary, such
        information as such selling Holders and underwriter(s), if any, may
        reasonably request to have included therein, including, without
        limitation information relating to the "Plan of Distribution" of the
        Transfer Restricted Securities as specified by such Holder in such
        Holder Questionnaire to be delivered prior to the Questionnaire
        Deadline.

                (v) Furnish to each selling Holder (in the case of Holders, at
        the address set forth in the Register of Securities or the records of
        the transfer agent of the Common Stock at such time) and each of the
        underwriter(s), if any, upon their request, without charge, at least one
        copy of the Shelf Registration Statement, as first filed with the
        Commission, and of each amendment thereto (and any documents
        incorporated by reference therein or exhibits thereto (or exhibits
        incorporated in such exhibits by reference) as such Person may request).

                (vi) Deliver to each selling Holder (in the case of Holders, at
        the address set forth in the Register of Securities or the records of
        the transfer agent of the Common Stock at such time) and underwriter(s),
        if any, without charge, as many copies of the Prospectus (including each
        preliminary prospectus) and any amendment or supplement thereto as such
        Persons reasonably may request; subject to any notice by the Company in
        accordance with this Section 4(b) of the existence of any fact or event
        of the kind described in Section 4(b)(iii) (D), the Company hereby
        consents to the use of the Prospectus and any amendment or supplement
        thereto by each of the selling Holders in connection with the offering
        and the sale of the Transfer Restricted Securities covered by the
        Prospectus or any amendment or supplement thereto.

                (vii) In connection with an Underwritten Offering, the Company
        shall:

                        (A) upon request, furnish to each underwriter, if any,
                in such substance and scope as they may reasonably request and
                as are customarily made by issuers to underwriters in primary
                underwritten offerings for selling security holders, upon the
                date of closing of any sale of Transfer Restricted Securities in
                an Underwritten Registration:

                                (1) a certificate, dated the date of such
                        closing, signed by the Chief Financial Officer of the
                        Company confirming, as of the date thereof, the matters
                        customarily covered in an officer's certificate to
                        underwriters in connection with underwritten offerings
                        of securities;

                                (2) opinions, each dated the date of such
                        closing, of counsel to the Company covering such of the
                        matters as are customarily covered in legal opinions to
                        underwriters in connection with underwritten offerings
                        of securities; and

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                                (3) customary comfort letters, dated the date of
                        such closing, from the Company's independent accountants
                        (and from any other accountants whose report is
                        contained or incorporated by reference in the Shelf
                        Registration Statement) in the customary form and
                        covering matters of the type customarily covered in
                        comfort letters to underwriters in connection with
                        underwritten offerings of securities; and

                        (B) deliver such other documents and certificates as may
                be reasonably requested by such parties to evidence compliance
                with clause (A) above and with any customary conditions
                contained in the underwriting agreement or other agreement
                entered into by the selling Holders pursuant to this clause (x).

                (viii) Before any public offering of Transfer Restricted
        Securities, cooperate with the selling Holders, the underwriter(s), if
        any, and their counsel in connection with the registration and
        qualification of the Transfer Restricted Securities under the securities
        or Blue Sky laws of such jurisdictions in the United States as the
        selling Holders or underwriter(s), if any, may reasonably request and do
        any and all other acts or things necessary or advisable to enable the
        disposition in such jurisdictions of the Transfer Restricted Securities
        covered by the Shelf Registration Statement; provided, however, that the
        Company shall not be required (A) to register or qualify as a foreign
        corporation or a dealer of securities where it is not now so qualified
        or to take any action that would subject it to the service of process in
        any jurisdiction where it is not now so subject or (B) to subject
        themselves to taxation in any such jurisdiction if they are not now so
        subject.

                (ix) Cooperate with the selling Holders and underwriter(s), if
        any, to facilitate the timely preparation and delivery of certificates
        representing Transfer Restricted Securities to be sold and not bearing
        any restrictive legends (unless required by applicable securities laws);
        and enable such Transfer Restricted Securities to be in such
        denominations and registered in such names as the Holders may request at
        least two Business Days before any sale of Transfer Restricted
        Securities.

                (xii) Use its reasonable efforts to cause the Transfer
        Restricted Securities covered by the Shelf Registration Statement to be
        registered with or approved by such other U.S. governmental agencies or
        authorities as may be necessary to enable the seller or sellers thereof
        to consummate the disposition of such Transfer Restricted Securities.

                (xiii) Subject to Section 4(b)(i) hereof, if any fact or event
        contemplated by Section 4(b)(iii)(D) hereof shall exist or have
        occurred, use its reasonable efforts to prepare a supplement or
        post-effective amendment to the Shelf Registration Statement or related
        Prospectus or any document incorporated therein by reference or file any
        other required document so that, as thereafter

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                                                                              13

        delivered to the purchasers of Transfer Restricted Securities, the
        Prospectus will not contain an untrue statement of a material fact or
        omit to state any material fact required to be stated therein or
        necessary to make the statements therein, in light of the circumstances
        in which they are made, not misleading; provided that the Company shall
        not be required to comply with the foregoing obligations during any
        Suspension Period or any period during which Additional Interest is
        accruing.

                (xiv) Provide CUSIP numbers for all Transfer Restricted
        Securities not later than the effective date of the Shelf Registration
        Statement and provide the Trustee under the Indenture with certificates
        for the Securities that are in a form eligible for deposit with The
        Depository Trust Company.

                (xv) Cooperate and assist in any filings required to be made
        with the NASD and in the performance of any due diligence investigation
        by any underwriter that is required to be retained in accordance with
        the rules and regulations of the NASD.

                (xvi) Otherwise use its reasonable efforts to comply with all
        applicable rules and regulations of the Commission and all reporting
        requirements under the rules and regulations of the Exchange Act.

                (xvii) Cause the Indenture to be qualified under the TIA not
        later than the effective date of the Shelf Registration Statement
        required by this Agreement, and, in connection therewith, cooperate with
        the Trustee and the holders of Securities to effect such changes to the
        Indenture as may be required for such Indenture to be so qualified in
        accordance with the terms of the TIA; and execute and use its reasonable
        efforts to cause the Trustee thereunder to execute all documents that
        may be required to effect such changes and all other forms and documents
        required to be filed with the Commission to enable such Indenture to be
        so qualified in a timely manner.

                (xviii) Cause all Common Stock covered by the Shelf Registration
        Statement to be listed or quoted, as the case may be, on each securities
        exchange or automated quotation system on which Common Stock is then
        listed or quoted.

        (c) Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice (a "SUSPENSION NOTICE") from the Company of the
existence of any fact of the kind described in Section 4(b)(iii)(D) hereof, such
Holder will, and will use its reasonable efforts to cause any underwriter(s) in
an Underwritten Offering to, forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement until:

                (i) such Holder has received copies of the supplemented or
        amended Prospectus contemplated by Section 4(b)(xiii) hereof; or

                (ii) such Holder is advised in writing by the Company that the
        use of the Prospectus may be resumed, and has received copies of any
        additional or supplemental filings that are incorporated by reference in
        the Prospectus.

<PAGE>

                                                                              14

Each Holder agrees to keep the receipt of a Suspension Notice and its contents
confidential. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice of
suspension.

        (d) Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall furnish to the Company in writing, within 20
Business Days after the date of the Holder Questionnaire, such information
regarding such Holder and the proposed distribution by such Holder of its
Transfer Restricted Securities as the Company may reasonably request for use in
connection with the Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. Holders that do not complete the Holder
Questionnaire and deliver it to the Company shall not be named as selling
securityholders in the Prospectus or preliminary Prospectus included in the
Shelf Registration Statement and therefore shall not be permitted to sell any
Transfer Restricted Securities pursuant to the Shelf Registration Statement;
provided, however, that notwithstanding the foregoing, transferees of all or a
portion of a Holder's Transfer Restricted Securities who furnish the Company a
completed Holder Questionnaire on or prior to the earlier of (i) the 20th
business day after the completion of such transfer to the transferee and (ii)
9:00 a.m., San Francisco time, on the second Business Day before the
effectiveness of the Shelf Registration Statement shall be named as selling
securityholders in the Prospectus or preliminary Prospectus included in the
Shelf Registration Statement, provided, further, that upon request from a Holder
that did not return a Holder Questionnaire on a timely basis because it was a
subsequent transferee of Transfer Restricted Securities after the Company
distributed the Holder Questionnaire, (i) the Company shall distribute a Holder
Questionnaire to such Holder at the address set forth in the request and (ii)
upon receipt of a properly completed Holder Questionnaire from such Holder, the
Company shall use its reasonable efforts to name such Holder as a selling
securityholder by means of a pre-effective amendment or, if permitted by the
Commission, by means of a Prospectus supplement to the Shelf Registration
Statement (provided, that the Company shall have no obligation to pay Additional
Interest to such Holder for its failure to file a pre-effective amendment or
Prospectus supplement). Each Holder who intends to be named as a selling Holder
in the Shelf Registration Statement shall promptly furnish to the Company in
writing such other information as the Company may from time to time reasonably
request in writing.

        (e) Upon the effectiveness of the Shelf Registration Statement, each
Holder shall notify the Company at least five Business Days prior to any
intended distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "SALE NOTICE"), which notice shall be effective for
five Business Days. Each Holder of Transfer Restricted Securities, by accepting
the same, agrees to hold any communication by the Company in response to a Sale
Notice in confidence. Upon receipt of a Sale Notice, the Company shall inform
each Holder in writing of the existence of a Suspension Period or otherwise, of
the kind of event described in Section 4(b)(iii)(D).

<PAGE>

                                                                              15

        5. Registration Expenses.

                All expenses incident to the Company's performance of or
compliance with this Agreement shall be borne by the Company regardless of
whether a Shelf Registration Statement becomes effective, including, without
limitation:

                (i) all registration and filing fees and expenses (including
        filings made with the NASD);

                (ii) all fees and expenses of compliance with federal securities
        and state Blue Sky or securities laws;

                (iii) all expenses of printing (including printing of
        Prospectuses and certificates for the Common Stock to be issued upon
        conversion of the Securities) and the Company's expenses for messenger
        and delivery services and telephone;

                (iv) all fees and disbursements of counsel to the Company;

                (v) all application and filing fees in connection with listing
        (or authorizing for quotation) the Common Stock on a national securities
        exchange or automated quotation system pursuant to the requirements
        hereof; and

                (vi) all fees and disbursements of independent certified public
        accountants of the Company.

        The Company shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company. Notwithstanding the foregoing, the Holders of the Transfer Restricted
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such Transfer
Restricted Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such Holders (severally and jointly), other than
the counsel and experts that represent the Company specifically referred to
above.

        6. Indemnification and Contribution.

        (a) The Company shall indemnify and hold harmless each Holder, such
Holder's officers, directors and employees and each person, if any, who controls
such Holder within the meaning of the Securities Act (each, an "INDEMNIFIED
HOLDER"), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to resales of the Transfer
Restricted Securities), to which such Indemnified Holder may become subject,
insofar as any such loss, claim, damage, liability or action arises out of, or
is based upon:

                (i) any untrue statement or alleged untrue statement of a
        material fact contained in (A) the Shelf Registration Statement or
        Prospectus or any amendment or supplement thereto or (B) any blue sky
        application or other

<PAGE>

                                                                              16

        document or any amendment or supplement thereto prepared or executed by
        the Company (or based upon written information furnished by or on behalf
        of the Company expressly for use in such blue sky application or other
        document or amendment on supplement) filed in any jurisdiction
        specifically for the purpose of qualifying any or all of the Transfer
        Restricted Securities under the securities law of any state or other
        jurisdiction (such application or document being hereinafter called a
        "BLUE SKY APPLICATION"); or

                (ii) the omission or alleged omission to state therein any
        material fact required to be stated therein or necessary to make the
        statements therein, in the light of the circumstances under which they
        were made, not misleading,

and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statement or Prospectus or
amendment or supplement thereto or Blue Sky Application in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein;
provided, further, that the Company shall not be liable to any Indemnified
Holder under the indemnity agreement in this subsection (a) with respect to any
preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Indemnified Holder results from the fact that such Indemnified
Holder sold Transfer Restricted Securities to a Person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final Prospectus in any case where such
delivery is required by the Securities Act if the Company had previously
furnished copies thereof in sufficient quantities to such Indemnified Holder and
the loss, claim, damage or liability of such Indemnified Holder results from an
untrue statement or omission of a material fact contained in the preliminary
Prospectus which was (i) identified to such Indemnified Holder at or prior to
the earlier of the filing with the Commission or the furnishing to such
Indemnified Holder of the corrected Prospectus and (ii) corrected in the final
Prospectus. The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have to any Indemnified Holder.

        (b) Each Holder, severally and not jointly, shall indemnify and hold
harmless the Company, its officers, directors and employees and each person, if
any, who controls the Company within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such officer, employee or
controlling person may become subject, insofar as any such loss, claim, damage
or liability or action arises out of, or is based upon:

                (i) any untrue statement or alleged untrue statement of any
        material fact contained in the Shelf Registration Statement or
        Prospectus or any amendment or supplement thereto or any Blue Sky
        Application; or

<PAGE>

                                                                              17

                (ii) the omission or the alleged omission to state therein any
        material fact required to be stated therein or necessary to make the
        statements therein, in light of the circumstances under which they were
        made, not misleading,

but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall reimburse the Company and any such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Company or any such officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Holder may
otherwise have to the Company and any such officer, employee or controlling
person.

        (c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 6. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Holders shall have the right to employ a single counsel to represent jointly
a the Holders and their officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Holders against the Company under this Section 6 if the Holders
seeking indemnification shall have been advised by legal counsel that there may
be one or more legal defenses available to such Holders and their respective
officers, employees and controlling persons that are different from or
additional to those available to the Company, and in that event the fees and
expenses of such separate counsel shall be paid by the Company. No indemnifying
party shall:

                (i) without the prior written consent of the indemnified parties
        (which consent shall not be unreasonably withheld) settle or compromise
        or consent to the entry of any judgment with respect to any pending or
        threatened claim, action, suit or proceeding in respect of which
        indemnification or contribution may be sought hereunder (whether or not
        the indemnified parties are actual or potential parties to such claim or
        action) unless such settlement, compromise or consent

<PAGE>

                                                                              18

        includes an unconditional release of each indemnified party from all
        liability arising out of such claim, action, suit or proceeding, or

                (ii) be liable for any settlement of any such action effected
        without its written consent (which consent shall not be unreasonably
        withheld), but if settled with its written consent or if there be a
        final judgment for the plaintiff in any such action, the indemnifying
        party agrees to indemnify and hold harmless any indemnified party from
        and against any loss of liability by reason of such settlement or
        judgment.

        (d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability
(or action in respect thereof) referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof):

                (i) in such proportion as is appropriate to reflect the relative
        benefits received by the Company from the offering and sale of the
        Transfer Restricted Securities on the one hand and a Holder with respect
        to the sale by such Holder of the Transfer Restricted Securities on the
        other, or

                (ii) if the allocation provided by clause (6)(d)(i) is not
        permitted by applicable law, in such proportion as is appropriate to
        reflect not only the relative benefits referred to in clause 6(d)(i) but
        also the relative fault of the Company on the one hand and the Holders
        on the other in connection with the statements or omissions or alleged
        statements or alleged omissions that resulted in such loss, claim,
        damage or liability (or action in respect thereof), as well as any other
        relevant equitable considerations.

The relative benefits received by the Company on the one hand and a Holder on
the other with respect to such offering and such sale shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Securities purchased under the Purchase Agreement (before deducting expenses)
received by the Company, on the one hand, bear to the total proceeds received by
such Holder with respect to its sale of Transfer Restricted Securities on the
other. The relative fault of the parties shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Holders on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each Holder agree that it would not be just and equitable if the amount of
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above in
this Section 6 shall be deemed to include, for purposes of this Section 6, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or

<PAGE>

                                                                              19

claim. Notwithstanding the provisions of this Section 6, no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Transfer Restricted Securities purchased by it were resold
exceeds the amount of any damages which such Holder has otherwise been required
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute as provided in this
Section 6(d) are several and not joint.

        7. Rule 144A. In the event the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.

        8. Underwritten Registrations. The Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering if approved
by the Company in its sole discretion; provided, however that no such Holder may
participate in any Underwritten Registration hereunder unless such Holder:

                (i) agrees to sell such Holder's Transfer Restricted Securities
        on the basis provided in any underwriting arrangements approved by the
        Persons entitled hereunder to approve such arrangements; and

                (ii) completes and executes all reasonable questionnaires,
        powers of attorney, indemnities, underwriting agreements, lock-up
        letters and other documents required under the terms of such
        underwriting arrangements.

In any such Underwritten Offering, the investment banker or investment bankers
and manager or managers that will administer the offering will be selected by a
Majority of Holders whose Transfer Restricted Securities are included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Company. If requested by the underwriter(s), if any, the
Company agrees to make appropriate officers of the Company available to the
underwriters for meetings with prospective purchasers of the Transfer Restricted
Securities and prepare and present to potential investors customary "road show"
or marketing materials in a manner consistent with other new issuances of other
securities similar to the Transfer Restricted Securities.

        9. Miscellaneous.

        (a) Actions Affecting Transfer Restricted Securities. The Company shall
not, directly or indirectly, take any action with respect to the Transfer
Restricted Securities as a class that would adversely affect the ability of the
Holders of Transfer Restricted Securities to include such Transfer Restricted
Securities in a registration undertaken pursuant to this Agreement.

<PAGE>

                                                                              20

        (b) No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Company shall
not grant to any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. The Company has not previously
entered into any agreement (which has not expired or been terminated) granting
any registration rights with respect to its securities to any Person which
rights conflict with the provisions hereof.

        (c) Amendments and Waivers. This Agreement may not be amended, modified
or supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Company has obtained the written consent of
a Majority of Holders.

        (d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, facsimile
transmission, or air courier guaranteeing overnight delivery:

                (i) if to a Holder, at the address set forth on the records of
        the Registrar under the Indenture or the transfer agent of the Common
        Stock, as the case may be; and

                (ii) if to the Company:

                      LSI Logic Corporation
                      1551 McCarthy Boulevard
                      Milpitas, California  95035
                      Attention:  General Counsel
                      Tel:  (408) 433-8000
                      Fax:  (408) 954-3353;

                      with a copy to:

                      Wilson Sonsini Goodrich & Rosati
                      650 Page Mill Road
                      Palo Alto, California  94304
                      Attention:  Michael Occhiolini
                      Tel:  (650) 493-9300
                      Fax:  (650) 493-6811

        All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if transmitted by
facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.

<PAGE>

                                                                              21

        (e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that (i) this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder and (ii) nothing contained
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Transfer Restricted Securities, in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Transfer Restricted
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement.

        (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

        (g) Securities Held by the Company or Their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Company or its "affiliates" (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

        (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

        (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        (j) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

        (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

<PAGE>

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                  LSI LOGIC CORPORATION

                                  By     /s/ Bryon Look
                                    ------------------------------------------
                                         Name:  Bryon Look
                                         Title:  Executive Vice President & CEO

                                  LEHMAN BROTHERS INC.

                                  By     /s/ Kyle T. Ryland
                                    ------------------------------------------
                                         Name:  Kyle T. Ryland
                                         Title:  Managing DirectorExhibit 4.01

 

Exhibit 4.01

INTUIT INC.

 

2002 EQUITY INCENTIVE PLAN

 

As Adopted by the Board on October 24, 2001

And Amended by the Board on November 26, 20011

and Approved by Stockholders on January 18, 2002

     1. PURPOSE. The purpose of the Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company its Parent or Subsidiaries by
offering them an opportunity to participate in the Company’s future performance
through awards of Options, Restricted Stock and Stock Bonuses. Capitalized
terms not defined in the text are defined in Section 23.

     2. SHARES SUBJECT TO THE PLAN.

          2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the
following number of Shares are available for grant and issuance under the Plan:
(a) 8,000,000 Shares, plus (b) the additional number of shares resulting from
(i) any authorized shares not issued or subject to outstanding grants under the
Company’s 1993 Equity Incentive Plan (the “Prior Plan”) on the Effective Date
(as defined in Section 19) and (ii) any shares that are issuable upon exercise
of options granted pursuant to the Prior Plan that, after the Effective Date,
expire or become unexercisable for any reason without having been exercised in
full; plus (c) Shares that are subject to: (i) issuance upon exercise of an
Option but cease to be subject to the Option for any reason other than exercise
of the Option; (ii) an Award that otherwise terminates without Shares being
issued; or (iii) are subject to an Award that is forfeited or are repurchased
by the Company at the original issue price. No more than 10,000,000 shares
shall be issued as ISOs. At all times the Company will reserve and keep
available a sufficient number of Shares to satisfy the requirements of all
outstanding Options granted under the Plan and all other outstanding but
unvested Awards granted under the Plan.

          2.2 Adjustment of Shares. If the number of outstanding Shares is changed
by a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company, without consideration, then (a) the number of Shares
reserved for issuance under the Plan, (b) the Exercise Prices of and number of
Shares subject to outstanding Options, (c) the number of Shares subject to
other outstanding Awards, (d) the 10,000,000 maximum number of shares that may
be issued as ISOs set forth in Section 2.1; (e) the 2,000,000 and 3,000,000
maximum number of shares that may be issued to an individual in any one
calendar year set forth in Section 3; and (f) the annual 500,000 Share limit on
the aggregate number of Shares that may be: (i) made subject to an Option
granted at an Exercise Price of less than Fair Market Value on the date of
grant, (ii) issued under the Plan as a Stock Bonus; and (iii) issued under the
Plan as a Restricted Stock Award at a Purchase Price of less than Fair Market
Value on the date the Award is made, will be proportionately adjusted, subject
to any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided that fractions of a Share
will not be issued but will either be paid in cash at Fair Market Value, or
will be rounded up to the nearest Share, as determined by the Committee; and
provided further that the Exercise Price of any Option may not be decreased to
below the par value of the Shares.

     3. ELIGIBILITY. ISOs may be granted only to employees (including officers
and directors who are also employees) of the Company or of a Parent or
Subsidiary. All other Awards may be granted to employees, officers, directors,
consultants, independent contractors and advisors of the Company or any Parent
or Subsidiary; provided that such consultants, contractors and advisors render
bona fide services not in connection with the offer and sale of securities in a
capital-raising transaction. The Committee (or its designee under 4.1(c)) will
from time to time determine and designate among the eligible persons who will
be granted one or more Awards under the

	1  	Amended by the Board on
November 26, 2001 solely to reserve 8,000,000 new shares
for grant and issuance under Section 2.1(a) of the Plan.

 

1

 

Plan. A person may be granted more than one Award under the Plan. However, no
person will be eligible to receive more than 2,000,000 Shares in any calendar
year under this Plan pursuant to the grant of Awards hereunder, other than new
employees of the Company or of a Parent or Subsidiary (including new employees
who are also officers and directors of the Company or any Parent or
Subsidiary), who are eligible to receive up to a maximum of 3,000,000 Shares in
the calendar year in which they commence their employment.

     4. ADMINISTRATION.

          4.1 Committee Authority. The Plan shall be administered by the Committee.
Subject to the terms and conditions of the Plan, the Committee will have full
power to implement and carry out the Plan. Without limiting the previous
sentence, the Committee will have the authority to:

	       	(a)	  	construe and interpret the Plan, any Award Agreement and any
other agreement or document executed pursuant to the Plan;
	 
	       	(b)	  	prescribe, amend and rescind rules and regulations relating
to the Plan, including determining the forms and agreements used in
connection with the Plan; provided that the Committee may delegate
to the President, the Chief Financial Officer or the officer in
charge of Human Resources, in consultation with the General Counsel,
the authority to approve revisions to the forms and agreements used
in connection with the Plan that are designed to facilitate Plan
administration, and that are not inconsistent with the Plan or with
any resolutions of the Committee relating to the Plan;
	 
	       	(c)	  	select persons to receive Awards; provided that the Committee
may delegate to one or more executive officers of the Company the
authority to grant an Award under the Plan to Participants who are
not Insiders of the Company;
	 
	       	(d)	  	determine the terms of Awards;
	 
	       	(e)	  	determine the number of Shares or other consideration subject
to Awards;
	 
	       	(f)	  	determine whether Awards will be granted singly, in
combination, or in tandem with, in replacement of, or as
alternatives to, other Awards under the Plan or any other incentive
or compensation plan of the Company or any Parent or Subsidiary;
	 
	       	(g)	  	grant waivers of Plan or Award conditions;
	 
	       	(h)	  	determine the vesting, exercisability, transferability, and payment
of Awards;
	 
	       	(i)	  	correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award Agreement;
	 
	       	(j)	  	determine whether an Award has been earned;
	 
	       	(k)	  	amend the Plan, except for amendments that increase the
number of Shares available for issuance under the Plan or change the
eligibility criteria for participation in the Plan; or any other
amendments that require approval of the stockholders of the Company;
or
	 
	       	(l)	  	make all other determinations necessary or advisable for the
administration of the Plan.

          4.2 Committee Interpretation and Discretion. Any determination made by
the Committee with respect to any Award shall be made in its sole discretion at
the time of grant of the Award or, unless in contravention of any express term
of the Plan or Award, at any later time, and such determination shall be final
and binding on the Company and all persons having an interest in any Award
under the Plan. Any dispute regarding the interpretation of the Plan or any
Award Agreement shall be submitted by Participant or the Company to the

 

2

 

Committee for review. The resolution of such a dispute by the Committee shall
be final and binding on the Company and Participant.

     5. OPTIONS. The Committee may grant Options to eligible persons and will
determine (a) whether the Options will be ISOs or NQSOs; (b) the number of
Shares subject to the Option, (c) the Exercise Price of the Option, (d) the
period during which the Option may be exercised, and (e) all other terms and
conditions of the Option, subject to the following:

          5.1 Form of Option Grant. Each Option granted under the Plan will be
evidenced by a Stock Option Agreement that will expressly identify the Option
as an ISO or NQSO. The Stock Option Agreement will be substantially in a form
(which need not be the same for each Participant) that the Committee or an
officer of the Company (pursuant to Section 4.1(b)) has from time to time
approved, and will comply with and be subject to the terms and conditions of
the Plan.

          5.2 Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant the Option, unless a later
date is otherwise specified by the Committee. The Stock Option Agreement, and
a copy of the Plan and the current Prospectus for the Plan (plus any additional
documents required to be delivered under applicable laws), will be delivered to
the Participant within a reasonable time after the Option is granted. The
Plan, the Prospectus and other documents may delivered in any manner (including
electronic distribution or posting) that meets applicable legal requirements.

          5.3 Exercise Period and Expiration Date. Options will be exercisable
within the times or upon the occurrence of events determined by the Committee
and set forth in the Stock Option Agreement, subject to the provisions of
Section 5.6, and subject to Company policies established by the Committee (or
by individuals to whom the Committee has delegated responsibility) from time to
time with respect to vesting during leaves of absences. The Stock Option
Agreement shall set forth the last date that the option may be exercised (the
“Expiration Date”); provided that no Option will be exercisable after the
expiration of ten years from the date the Option is granted; and provided
further that no ISO granted to a Ten Percent Stockholder will be exercisable
after the expiration of five years from the date the Option is granted. The
Committee also may provide for Options to become exercisable at one time or
from time to time, periodically or otherwise, in such number of Shares or
percentage of Shares subject to the Option as the Committee determines.

          5.4 Exercise Price. The Exercise Price of an Option will be determined by
the Committee when the Option is granted and may be less than Fair Market Value
(but not less than the par value of the Shares); provided that (i) the Exercise
Price of an ISO will not be less than the Fair Market Value of the Shares on
the date of grant and (ii) the Exercise Price of any ISO granted to a Ten
Percent Stockholder will not be less than 110% of the Fair Market Value of the
Shares on the date of grant. Notwithstanding the foregoing, no more than
500,000 Shares annually (less any Shares that have been issued under the Plan
as Stock Bonuses or as Restricted Stock Awards at a price of less than Fair
Market Value on the date of grant) may be made subject to Options granted an
Exercise Price that is less than Fair Market Value on the date of grant.
Payment for the Shares purchased must be made in accordance with Section 8 of
the Plan and the Stock Option Agreement.

          5.5 Procedures for Exercise. A Participant or Authorized Transferee may
exercise Options by following the procedures established by the Company’s Stock
Administration Department, as communicated and made available to Participants
through the stock pages on the Intuit Legal Department intranet web site,
and/or through the Company’s electronic mail system.

          5.6 Termination.

     (a)  Vesting. Any Option granted to a Participant will cease to vest on the
Participant’s Termination Date, if the Participant is Terminated for any reason
other than “total disability” (as defined in this Section 5.6(a)) or death (or
his or her death occurs within three months of Termination). Any Option
granted to a Participant who is an employee who has been actively employed by
the Company or any Subsidiary for one year or more or a director will vest as
to 100% of the Shares subject to such Option, if the Participant is Terminated
due to “total disability” or death (or his or her death occurs within three
months of Termination). For purposes of this Section

 

3

 

5.6(a), “total disability” shall mean: (A) (i) for so long as such definition
is used for purposes of the Company’s group life insurance and accidental death
and dismemberment plan or group long term disability plan, that the Participant
is unable to perform each of the material duties of any gainful occupation for
which the Participant is or becomes reasonably fitted by training, education or
experience and which total disability is in fact preventing the Participant
from engaging in any employment or occupation for wage or profit; or, (ii) if
such definition has changed, such other definition of “total disability” as
determined under the Company’s group life insurance and accidental death and
dismemberment plan or group long term disability plan; and (B) the Company
shall have received from the Participant’s primary physician a certification
that the Participant’s total disability is likely to be permanent. Any Option
granted to an employee who is Terminated by the Company, or any Subsidiary or
Parent within one year following the date of a Corporate Transaction, will
immediately vest as to such number of Shares as the Participant would have been
vested twelve months after the date of Termination had the Participant remained
employed for that twelve month period.

     (b)  Post-Termination Exercise Period. Following a Participant’s
Termination, the Participant’s Option may be exercised to the extent vested as
set forth in Section 5.6(a):

	       	(i)	  	no later than 90 days after the Termination Date
if a Participant is Terminated for any reason except death or
Disability, unless a longer time period, not exceeding five
years, is specifically set forth in the Participant’s Stock
Option Agreement; provided that no Option may be exercised
after the Expiration Date of the Option; or
	 
	       	(ii)	  	no later than (A) twelve months after the
Termination Date in the case of Termination due to Disability
or (B) eighteen months after the Termination Date in the case
of Termination due to death or if a Participant dies within
three months of the Termination Date, unless a longer time
period, not exceeding five years, is specifically set forth in
the Participant’s Stock Option Agreement; provided that no
Option may be exercised after the Expiration Date of the
Option.

          5.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option;
provided that the minimum number will not prevent a Participant from exercising
an Option for the full number of Shares for which it is then exercisable.

          5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISOs are exercisable for
the first time by a Participant during any calendar year (under the Plan or
under any other incentive stock option plan of the Company or any Parent or
Subsidiary) shall not exceed $100,000. If the Fair Market Value of Shares on
the date of grant with respect to which ISOs are exercisable for the first time
by a Participant during any calendar year exceeds $100,000, the Options for the
first $100,000 worth of Shares to become exercisable in that calendar year will
be ISOs, and the Options for the Shares with a Fair Market Value in excess of
$100,000 that become exercisable in that calendar year will be NQSOs. If the
Code is amended after the Effective Date of the Plan to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs, such
different limit shall be automatically incorporated into the Plan and will
apply to any Options granted after the effective date of the amendment.

          5.9 Notice of Disqualifying Dispositions of Shares Acquired on Exercise of
an ISO. If a Participant sells or otherwise disposes of any Shares acquired
pursuant to the exercise of an ISO on or before the later of (1) the date two
years after the Date of Grant, and (2) the date one year after the exercise of
the ISO (in either case, a “Disqualifying Disposition”), the Participant must
immediately notify the Company in writing of such disposition. The Participant
may be subject to income tax withholding by the Company on the compensation
income recognized by the Participant from the Disqualifying Disposition.

          5.10 Modification, Extension or Renewal. The Committee may modify, extend
or renew outstanding Options and authorize the grant of new Options in
substitution therefor; provided that any such action may not, without the
written consent of Participant, impair any of Participant’s rights under any
Option previously granted; and provided, further that without stockholder
approval, the modified, extended, renewed or new Option may not have a lower
Exercise Price than the outstanding Option. Any outstanding ISO that is
modified, extended,

 

4

 

renewed or otherwise altered shall be treated in accordance with Section 424(h)
of the Code. The Committee may reduce the Exercise Price of outstanding
Options without the consent of Participants affected, by a written notice to
them; provided, however, that unless prior stockholder approval is secured, the
Exercise Price may not be reduced below that of the outstanding Option.

          5.11 No Disqualification. Notwithstanding any other provision in the
Plan, no term of the Plan relating to ISOs will be interpreted, amended or
altered, and no discretion or authority granted under the Plan will be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

     6. RESTRICTED STOCK AWARDS. The Committee may award Restricted Stock
Awards under the Plan to any eligible person. The Committee will determine the
number of Shares subject to the Restricted Stock Award, the Purchase Price, the
restrictions on the Shares and all other terms and conditions of the Restricted
Stock Award, subject to the following:

          6.1 Restricted Stock Purchase Agreement. All purchases under a Restricted
Stock Award will be evidenced by Restricted Stock Purchase Agreement, which
will be in substantially a form (which need not be the same for each
Participant) that the Committee has from time to time approved, and will comply
with and be subject to the terms and conditions of the Plan. A Participant can
accept a Restricted Stock Award only by signing and delivering to the Company a
Restricted Stock Purchase Agreement, and full payment of the Purchase Price,
within thirty days from the date the Restricted Stock Purchase Agreement was
delivered to the Participant. If the Participant does not accept the
Restricted Stock Award in this manner within thirty days, then the offer of the
Restricted Stock Award will terminate, unless the Committee determines
otherwise.

          6.2 Purchase Price. The Purchase Price for a Restricted Stock Award will
be determined by the Committee, and may be less than Fair Market Value (but not
less than the par value of the Shares) on the date the Restricted Stock Award
is granted. Notwithstanding the foregoing, the Committee may not award
Restricted Stock for more than 500,000 Shares annually (less any Shares that
have been made subject to Options granted with an Exercise Price of less than
Fair Market Value on the date of grant or Stock Bonuses) with a Purchase Price
that is less than Fair Market Value on the date of grant. Payment of the
Purchase Price must be made in accordance with Section 8 of the Plan and the
Restricted Stock Purchase Agreement, and in accordance with any procedures
established by the Company’s Stock Administration Department, as communicated
and made available to Participants through the stock pages on the Intuit Legal
Department intranet web site, and/or through the Company’s electronic mail
system.

          6.3 Terms of Restricted Stock Awards. Restricted Stock Awards will be
subject to all restrictions, if any, that the Committee may impose. These
restrictions may be based on completion of a specified number of years of
service with the Company or upon completion of the performance goals as set out
in advance in the Participant’s Restricted Stock Purchase Agreement, which
shall be in substantially in a form (which need not be the same for each
Participant) as the Committee or an officer of the Company (pursuant to Section
4.1(b)) shall from time to time approve, and shall comply with and be subject
to the terms and conditions of the Plan and the Restricted Stock Purchase
Agreement. Prior to the grant of a Restricted Stock Award, the Committee shall:
(a) determine the nature, length and starting date of any Performance Period
for the Restricted Stock Award; (b) select from among the Performance Factors
to be used to measure performance goals, if any; and (c) determine the number
of Shares that may be awarded to the Participant. Prior to the payment for
Shares to be purchased under any Restricted Stock Award, the Committee shall
determine the extent to which such Restricted Stock Award has been earned.
Performance Periods may overlap and a Participant may participate
simultaneously with respect to Restricted Stock Awards that are subject to
different Performance Periods and having different performance goals and other
criteria.

     7. STOCK BONUSES.

          7.1 Awards of Stock Bonuses. The Committee may award Stock Bonuses to any
eligible person. No payment will be required for Shares awarded pursuant to a
Stock Bonus. A Stock Bonus may be awarded for past services already rendered
to the Company, or any Parent or Subsidiary pursuant to a Stock Bonus

 

5

 

Agreement, which shall be in substantially a form (which need not be the same
for each Participant) that the Committee has from time to time approved, and
will comply with and be subject to the terms and conditions of the Plan.
Notwithstanding the foregoing, the Committee may not award Stock Bonuses for
more than 500,000 Shares annually (less any Shares that have been made subject
to Options granted with an Exercise Price of less than Fair Market Value on the
Date of Grant and any Shares that have been issued under the Plan as Restricted
Stock at a Purchase Price of less than Fair Market Value on the date of grant).

          7.2 Terms of Stock Bonuses. Stock Bonuses will be subject to all
restrictions, if any, that the Committee imposes. These restrictions may be
based upon completion of a specified number of years of service with the
Company or upon completion of the performance goals as set out in advance in
the Participant’s Stock Bonus Agreement. The terms of Stock Bonuses may vary
from Participant to Participant and between groups of Participants. Prior to
the grant of a Stock Bonus, the Committee shall: (a) determine the nature,
length and starting date of any Performance Period for the Stock Bonus; (b)
select from among the Performance Factors to be used to measure performance
goals; and (c) determine the number of Shares that may be awarded to the
Participant. Prior to the issuance of any Shares or other payment to a
Participant pursuant to a Stock Bonus, the Committee will determine the extent
to which the Stock Bonus has been earned. Performance Periods may overlap and
a Participant may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and having different performance
goals and other criteria.

          7.3 Form of Payment to Participant. The Committee will determine whether
a Stock Bonus will be paid to the Participant in the form of cash, whole
Shares, or a combination thereof, based on the Fair Market Value on the date of
payment, and in either a lump sum payment or in installments.

          7.4 Termination During Performance Period. If a Participant is Terminated
during a Performance Period for any reason, then the Participant will be
entitled to payment (whether in Shares, cash or otherwise) with respect to the
Stock Bonus only to the extent earned as of the date of Termination in
accordance with the Stock Bonus Agreement, unless the Committee determines
otherwise.

     8. PAYMENT FOR SHARE PURCHASES.

          8.1 Payment. Payment for Shares purchased pursuant to the Plan may be
made by any of the following methods (or any combination of such methods) that
are described in the applicable Stock Option Agreement or other Award Agreement
and that are permitted by law:

	       	(a)	  	in cash (by check);
	 
	       	(b)	  	in the case of exercise by the Participant, Participant’s
guardian or legal representative or the authorized legal
representative of Participants’ heirs or legatees after
Participant’s death, by cancellation of indebtedness of the Company
to the Participant;
	 
	       	(c)	  	by surrender of Shares that either: (1) were obtained by the
Participant or Authorized Transferee in the public market; or (2) if
the Shares were not obtained in the public market, they have been
owned by the Participant or Authorized Transferee for more than six
months and have been paid for within the meaning of SEC Rule 144
(and, if the Shares were purchased from the Company by use of a
promissory note, the note has been fully paid with respect to the
Shares);
	 
	       	(d)	  	by tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing interest at a
rate sufficient to avoid imputation of income under Sections 483 and
1274 of the Code; provided, however, that a Participant who is not
an employee of the Company may not purchase Shares with a promissory
note unless the note is adequately secured by collateral other than
the Shares; and provided, further, that the portion of the Purchase
Price or Exercise Price equal to the par value of the Shares must be
paid in cash.

 

6

 

	       	(e)	  	in the case of exercise by the Participant, Participant’s
guardian or legal representative or the authorized legal
representative of Participants’ heirs or legatees after
Participant’s death, by waiver of compensation due or accrued to
Participant for services rendered;
	 
	       	(f)	  	by tender of property; or
	 
	       	(g)	  	with respect only to purchases upon exercise of an Option,
and provided that a public market for the Company’s stock exists:

	              	(1)	  	through a “same day sale” commitment from
Participant or Authorized Transferee and an NASD Dealer
whereby the Participant or Authorized Transferee irrevocably
elects to exercise the Option and to sell a portion of the
Shares purchased in order to pay the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon receipt of
the Shares to forward the Exercise Price directly to the
Company; or
	 
	              	(2)	  	through a “margin” commitment from Participant or
Authorized Transferee and an NASD Dealer whereby Participant
or Authorized Transferee irrevocably elects to exercise the
Option and to pledge the Shares purchased to the NASD Dealer
in a margin account as security for a loan from the NASD
Dealer in the amount of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of the Shares to
forward the Exercise Price directly to the Company.

          8.2 Loan Guarantees. The Committee may, in its sole discretion, help a
Participant pay for Shares purchased under the Plan by authorizing a guarantee
by the Company of a third-party loan to the Participant.

          8.3 Issuance of Shares. Upon payment of the applicable Purchase Price or
Exercise Price (or a commitment for payment from the NASD Dealer designated by
the Participant or Authorized Transferee in the case of an exercise by means of
a “same-day sale” or “margin” commitment), and compliance with other conditions
and procedures established by the Company for the purchase of shares, the
Company shall issue the Shares registered in the name of Participant or
Authorized Transferee (or in the name of the NASD Dealer designated by the
Participant or Authorized Transferee in the case of an exercise by means of a
“same-day sale” or “margin” commitment) and shall deliver certificates
representing the Shares (in physical or electronic form, as appropriate). The
Shares may be subject to legends or other restrictions as described in Section
14 of the Plan.

     9. WITHHOLDING TAXES.

          9.1 Withholding Generally. Whenever Shares are to be issued under Awards
granted under the Plan, the Company may require the Participant to pay to the
Company an amount sufficient to satisfy federal, state and local withholding
tax requirements prior to the delivery of any certificate(s) for the Shares.
If a payment in satisfaction of an Award is to be made in cash, the payment
will be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.

          9.2 Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may, in its sole
discretion, allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined. All elections by a Participant to have
Shares withheld for this purpose shall be made in writing in a form acceptable
to the Committee.

     10. PRIVILEGES OF STOCK OWNERSHIP. No Participant or Authorized
Transferee will have any rights as a stockholder of the Company with respect to
any Shares until the Shares are issued to the Participant or Authorized
Transferee. After Shares are issued to the Participant or Authorized
Transferee, the Participant or

 

7

 

Authorized Transferee will be a stockholder and have all the rights of a
stockholder with respect to the Shares; provided, however, that if the Shares
are Restricted Stock, any new, additional or different securities the
Participant or Authorized Transferee may become entitled to receive with
respect to the Shares by virtue of a stock dividend, stock split or any other
change in the corporate or capital structure of the Company will be subject to
the same restrictions as the Restricted Stock; provided further, that the
Participant or Authorized Transferee will have no right to retain such
dividends or distributions with respect to Shares that are repurchased at the
Participant’s original Exercise Price or Purchase Price pursuant to Section 14.

     11. TRANSFERABILITY. Except as otherwise provided in this Section 11, no
Award and no interest therein, shall be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent and distribution and no Award may be made subject to execution,
attachment or similar process.

          11.1 Awards Other Than NQSOs. All Awards other than NQSO’s shall be
exercisable (a) during a Participant’s lifetime only by Participant or the
Participant’s guardian or legal representative; and (b) after Participant’s
death, by the legal representative of the Participant’s heirs or legatees.

          11.2 NQSOs. During a Participant’s lifetime an NQSO shall be exercisable
by Participant or the Participant’s guardian or legal representative, and with
the permission of the Committee, may be transferred to an Authorized
Transferee.

     12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase all or a portion of a Participant’s Shares that are not
“Vested” (as defined in the Award Agreement), following the Participant’s
Termination, at any time within ninety days after the later of (i) the
Participant’s Termination Date or (ii) the date the Participant purchases
Shares under the Plan, for cash or cancellation of purchase money indebtedness
with respect to Shares, at the Participant’s original Exercise Price or
Purchase Price; provided that upon assignment of the right to repurchase, the
assignee must pay the Company, upon assignment of the right to repurchase, cash
equal to the excess of the Fair Market Value of the Shares over the original
Purchase Price.

     13. CERTIFICATES. All certificates for Shares or other securities
delivered under the Plan (whether in physical or electronic form, as
appropriate) will be subject to stock transfer orders, legends and other
restrictions that the Committee deems necessary or advisable, including without
limitation restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system on which the Shares may be
listed.

     14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant’s Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other transfer
instruments approved by the Committee, appropriately endorsed in blank, with
the Company or an agent designated by the Company, to hold in escrow until such
restrictions have lapsed or terminated, and the Committee may cause a legend or
legends referencing such restrictions to be placed on the certificates. Any
Participant who is permitted to execute a promissory note as partial or full
consideration for the purchase of Shares under the Plan will be required to
pledge and deposit with the Company all or part of the Shares purchased as
collateral to secure the payment of the Participant’s obligation to the Company
under the promissory note; provided, however, that the Committee may require or
accept other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company will have full recourse against the
Participant under the promissory note notwithstanding any pledge of the
Participant’s Shares or other collateral. In connection with any pledge of the
Shares, the Participant will be required to execute and deliver a written
pledge agreement in a form that the Committee has from time to time approved.
The Shares purchased with the promissory note may be released from the pledge
on a pro rata basis as the promissory note is paid.

     15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be
effective unless the Award is in compliance with all applicable state, federal
and foreign securities laws, rules and regulations of any governmental body,
and the requirements of any stock exchange or automated quotation system on
which the Shares may then be listed, as they are in effect on the date of grant
of the Award and also on

 

8

 

the date of exercise or other issuance. Notwithstanding any other provision in
the Plan, the Company shall have no obligation to issue or deliver certificates
for Shares under the Plan prior to (a) obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable,
and/or (b) completion of any registration or other qualification of such shares
under any state, federal or foreign law or ruling of any governmental body that
the Company determines to be necessary or advisable. The Company shall be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state,
federal or foreign securities laws, stock exchange or automated quotation
system, and the Company shall have no liability for any inability or failure to
do so.

     16. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted
under the Plan shall confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary or limit in any way the right of the
Company or any Parent or Subsidiary to terminate Participant’s employment or
other relationship at any time, with or without cause.

     17. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with prior stockholder approval and the
consent of the respective Participants, to issue new Awards in exchange for the
surrender and cancellation of any or all outstanding Awards. The Committee may
at any time buy from a Participant an Option previously granted with payment in
cash, Shares or other consideration, based on such terms and conditions as the
Committee and the Participant shall agree.

     18. CORPORATE TRANSACTIONS.

          18.1 Assumption or Replacement of Awards by Successor. In the event of a
Corporate Transaction any or all outstanding Awards may be assumed or replaced
by the successor corporation, which assumption or replacement shall be binding
on all Participants. In the alternative, the successor corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue,
in place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
corporation, if any, refuses to assume or replace the Awards, as provided
above, pursuant to a Corporate Transaction or if there is no successor
corporation due to a dissolution or liquidation of the Company, such Awards
shall immediately vest as to 100% of the Shares subject thereto at such time
and on such conditions as the Board shall determine and the Awards shall expire
at the closing of the transaction or at the time of dissolution or liquidation.

          18.2 Other Treatment of Awards. Subject to any greater rights granted to
Participants under Section 18.1, in the event of a Corporate Transaction, any
outstanding Awards shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation or sale of assets.

          18.3 Assumption of Awards by the Company. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise,
by either (a) granting an Award under the Plan in substitution of such other
company’s award, or (b) assuming such award as if it had been granted under the
Plan if the terms of such assumed award could be applied to an Award granted
under the Plan. Such substitution or assumption shall be permissible if the
holder of the substituted or assumed award would have been eligible to be
granted an Award under the Plan if the other company had applied the rules of
the Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

     19. ADOPTION AND STOCKHOLDER APPROVAL. The Plan was adopted by the Board
on October 24, 2002 (the “Adoption Date”). The Plan will become effective when
approved by stockholders of the Company, consistent with applicable laws,
within twelve months after the Adoption Date (the “Effective Date”).

 

9

 

     20. TERM OF PLAN. The Plan will terminate ten years from the Adoption
Date.

     21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend the Plan in any respect, including without limitation amendment of any
form of Award Agreement or instrument to be executed pursuant to the Plan. In
addition, pursuant to Section 4.1(k), the Board has delegated to the Committee
the authority to make certain amendments to the Plan. Notwithstanding the
foregoing, neither the Board nor the Committee shall, without the approval of
the stockholders of the Company, amend the Plan in any manner that requires
such stockholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans, or pursuant to the Exchange
Act or any rule promulgated thereunder. In addition, no amendment that is
detrimental to a Participant may be made to any outstanding Award without the
consent of the Participant.

     22. NONEXCLUSIVITY OF THE PLAN; UNFUNDED PLAN. Neither the adoption of
the Plan by the Board, the submission of the Plan to the stockholders of the
Company for approval, nor any provision of the Plan shall be construed as
creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under the
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases. The Plan shall be unfunded. Neither the Company nor
the Board shall be required to segregate any assets that may at any time be
represented by Awards made pursuant to the Plan. Neither the Company, the
Committee, nor the Board shall be deemed to be a trustee of any amounts to be
paid under the Plan.

     23. DEFINITIONS. As used in the Plan, the following terms shall have the
following meanings:

	       	(a)	  	“Authorized Transferee” means the permissible recipient, as
authorized by this Plan and the Committee, of an NQSO that is
transferred during the Participant’s lifetime by the Participant by
gift or domestic relations order. For purposes of this definition a
“permissible recipient” is: (i) a child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law of the Participant,
including any such person with such relationship to the Participant
by adoption; (ii) any person (other than a tenant or employee)
sharing the Participant’s household; (iii) a trust in which the
persons in (i) or (ii) have more than fifty percent of the
beneficial interest; (iv) a foundation in which the persons in (i)
or (ii) or the Participant control the management of assets; or (v)
any other entity in which the person in (i) or (ii) or the
Participant own more than fifty percent of the voting interest.
	 
	       	(b)	  	“Award” means any award under the Plan, including any Option,
Restricted Stock or Stock Bonus.
	 
	       	(c)	  	“Award Agreement” means, with respect to each Award, the
signed written agreement between the Company and the Participant
setting forth the terms and conditions of the Award.
	 
	       	(d)	  	“Board” means the Board of Directors of the Company.
	 
	       	(e)	  	“Code” means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
	 
	       	(f)	  	“Committee” means the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.
Each member of the Committee shall be (i) a “non-employee director”
for purposes of Section 16 and Rule 16b-3 of the Exchange Act, and
(ii) an “outside director” for purposes of Section 162(m) of the
Code, unless the Board has fewer than two such outside directors.

 

10

 

	       	(g)	  	“Company” means Intuit Inc., a corporation organized under
the laws of the State of Delaware, or any successor corporation.
	 
	       	(h)	  	“Corporate Transaction” means (a) a merger or consolidation
in which the Company is not the surviving corporation (other than a
merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other
transaction in which there is no substantial change in the
stockholders of the Company and the Awards granted under the Plan
are assumed or replaced by the successor corporation, which
assumption shall be binding on all Participants), (b) a dissolution
or liquidation of the Company, (c) the sale of substantially all of
the assets of the Company, (d) a merger in which the Company is the
surviving corporation but after which the stockholders of the
Company immediately prior to such merger (other than any stockholder
that merges, or which owns or controls another corporation that
merges, with the Company in such merger) cease to own their shares
or other equity interest in the Company; or (e) any other
transaction which qualifies as a “corporate transaction” under
Section 424(a) of the Code wherein the stockholders of the Company
give up all of their equity interest in the Company (except for the
acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company).
	 
	       	(i)	  	“Disability” means a disability within the meaning of Section
22(e)(3) of the Code, as determined by the Committee.
	 
	       	(j)	  	“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
	 
	       	(k)	  	“Exercise Price” means the price at which a Participant who
holds an Option may purchase the Shares issuable upon exercise of
the Option.
	 
	       	(l)	  	“Fair Market Value” means, as of any date, the value of a
share of the Company’s Common Stock determined as follows:

	              	(1)	  	if such Common Stock is then quoted on the NASDAQ
National Market, its last reported sale price on the NASDAQ
National Market on such date or, if no such reported sale
takes place on such date, the average of the closing bid and
asked prices;
	 
	       	(2)	  	if such Common Stock is publicly traded and is
then listed on a national securities exchange, the last
reported sale price on such date or, if no such reported sale
takes place on such date, the average of the closing bid and
asked prices on the principal national securities exchange on
which the Common Stock is listed or admitted to trading;
	 
	       	(3)	  	if such Common Stock is publicly traded but is
not quoted on the NASDAQ National Market nor listed or
admitted to trading on a national securities exchange, the
average of the closing bid and asked prices on such date, as
reported by The Wall Street Journal, for the over-the-counter
market; or
	 
	       	(4)	  	if none of the foregoing is applicable, by the
Board of Directors in good faith.

	       	(m)	  	“Insider” means an officer or director of the Company or any
other person whose transactions in the Company’s Common Stock are
subject to Section 16 of the Exchange Act.
	 
	       	(n)	  	“ISO” means an Incentive Stock Option within the meaning of the
Code.
	 
	       	(o)	  	“NASD Dealer” means broker-dealer that is a member of the
National Association of Securities Dealers, Inc.

 

11

 

	       	(p)	  	“NQSO” means a nonqualified stock option that does not
qualify as an Incentive Stock Option within the meaning of the Code.
	 
	       	(q)	  	“Option” means an award of an option to purchase Shares
pursuant to Section 5 of the Plan.
	 
	       	(r)	  	“Parent” means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if at the
time of the granting of an Award under the Plan, each of such
corporations other than the Company owns stock possessing 50% or
more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
	 
	       	(s)	  	“Participant” means a person who receives an Award under the
Plan.
	 
	       	(t)	  	“Performance Award” means an award of Shares, or cash in lieu
of Shares, pursuant to Section 8 of the Plan.
	 
	       	(u)	  	“Performance Factors” means the factors selected by the
Committee from among the following measures to determine whether the
performance goals established by the Committee and applicable to
Awards have been satisfied:

	              	(1)	  	Net revenue and/or net revenue growth;
	 
	       	(2)	  	Earnings before income taxes and amortization
and/or earnings before income taxes and amortization growth;
	 
	       	(3)	  	Operating income and/or operating income growth;
	 
	       	(4)	  	Net income and/or net income growth;
	 
	       	(5)	  	Earnings per share and/or earnings per share
growth;
	 
	       	(6)	  	Total stockholder return and/or total stockholder
return growth;
	 
	       	(7)	  	Return on equity;
	 
	       	(8)	  	Operating cash flow return on income;
	 
	       	(9)	  	Adjusted operating cash flow return on income;
	 
	       	(10)	  	Economic value added; and
	 
	       	(11)	  	Individual business objectives.

	       	(v)	  	“Performance Period” means the period of service determined
by the Committee, not to exceed five years, during which years of
service or performance is to be measured for Restricted Stock Awards
or Stock Bonuses.
	 
	       	(w)	  	“Plan” means this Intuit 2002 Equity Incentive Plan, as amended from
time to time.
	 
	       	(x)	  	“Prospectus” means the prospectus relating to the Plan, as
amended from time to time, that is prepared by the Company and
delivered or made available to Participants pursuant to the
requirements of the Securities Act.
	 
	       	(y)	  	“Purchase Price” means the price to be paid for Shares
acquired under the Plan, other than Shares acquired upon exercise of
an Option.

 

12

 

	       	(z)	  	“Restricted Stock Award” means an award of Shares pursuant to Section
6 of the Plan.
	 
	       	(aa)	  	“SEC” means the Securities and Exchange Commission.
	 
	       	(bb)	  	“Securities Act” means the Securities Act of 1933, as
amended, and the regulations promulgated thereunder.
	 
	       	(cc)	  	“Shares” means shares of the Company’s Common Stock $0.01 par
value, reserved for issuance under the Plan, as adjusted pursuant to
Sections 2 and 19, and any successor security.
	 
	       	(dd)	  	“Stock Bonus” means an award of Shares, or cash in lieu of
Shares, pursuant to Section 7 of the Plan.
	 
	       	(ee)	  	“Subsidiary” means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if,
at the time of granting of the Award, each of the corporations other
than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
	 
	       	(ff)	  	“Ten Percent Stockholder” means any person who directly or by
attribution owns more than ten percent of the total combined voting
power of all classes of stock of the Company or any Parent or
Subsidiary.
	 
	       	(gg)	  	“Termination” or “Terminated” means, for purposes of the Plan
with respect to a Participant, that the Participant has ceased to
provide services as an employee, director, consultant, independent
contractor or adviser, to the Company or a Parent or Subsidiary;
provided that a Participant shall not be deemed to be Terminated if
the Participant is on a leave of absence approved by the Committee
or by an officer of the Company designated by the Committee; and
provided further, that during any approved leave of absence, vesting
of Awards shall be suspended or continue in accordance with
guidelines established from time to time by the Committee. Subject
to the foregoing, the Committee shall have sole discretion to
determine whether a Participant has ceased to provide services and
the effective date on which the Participant ceased to provide
services (the “Termination Date”).

 

13

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