Document:

exv10w1

 

EXHIBIT 10.1

Mindspeed Technologies, Inc.

Summary of Director Compensation Arrangements

     We currently pay our non-employee directors annual base compensation of $30,000, and our
non-employee chairman of the board, $80,000, both of which are paid quarterly. They each also
receive committee participation compensation for each committee on which they serve equal to $2,500
annually for the governance and board composition committee and the compensation and management
development committee ($7,500 if serving as chairman of such committee) and $5,000 annually for the
audit committee ($10,000 if serving as chairman of such committee). Each non-employee director
also receives $1,250 for each board or committee meeting attended in person or by telephone. Each
director has the option each year to receive all or a portion of his cash compensation due via
shares or restricted shares valued at the closing price of our common stock on the date each
payment would otherwise be made. Directors who are our employees are not paid any additional
compensation for their service on our board of directors. Our board of directors may from time to
time appoint additional standing or ad hoc committees, and may compensate directors who serve on
them differently than we currently compensate members of our standing committees. We reimburse
each of our directors for reasonable out-of-pocket expenses that they incur in connection with
their service on our board of directors.

     Our non-employee directors are eligible to participate in our directors stock plan, which is
administered by our compensation and management development committee under authority delegated by
our board of directors. The directors stock plan provides that upon initial election to the board,
each non-employee director is granted an option to purchase 40,000 shares of our common stock at an
exercise price per share equal to its fair market value on the date of grant. The options become
exercisable in four equal installments on each of the first, second, third and fourth anniversaries
of the date the options are granted. In addition, each non-employee director is granted an option
to purchase 20,000 shares of our common stock following each annual meeting of stockholders. The
directors stock plan also permits the board or the compensation and management development
committee to grant one or more non-employee directors with additional compensation under the plan.
The directors stock plan is filed as Exhibit 10.2 to our Current Report on Form 8-K dated March 5,
2007. The terms of each option granted under the directors stock plan are substantially as set
forth in Exhibit 10.8 to our Quarterly Report on Form 10-Q that we filed with the SEC on August 9,
2005.

     The directors stock plan also provides that each non-employee director, upon initial election
to the board and following each annual meeting of stockholders, is granted specially restricted
shares in an amount equal to the lesser of: (i) 15,000 restricted shares, or (ii) the number of
restricted shares (rounded to nearest whole share) equal to $45,000 divided by the closing price of
our common stock on the date of grant. These specially restricted shares have all the attributes
of outstanding common stock, such as the right to vote the shares and receive dividends thereon,
except that the owner of these restricted

 

 

shares will have no right to transfer the shares until ten days after: (i) the recipient
retires from our board of directors after attaining age 55 and completing at least five years of
service as a director, or (ii) the recipient resigns from the board or ceases to be a director by
reason of antitrust laws, compliance with our conflict of interest policies, death, disability or
other circumstances the board determines not to be adverse to the best interests of our company.
The terms of each grant of specially restricted shares under the directors stock plan are
substantially as set forth in Exhibit 10.2 to our Quarterly Report on Form 10-Q that we filed with
the SEC on May 9, 2006.

     The compensation arrangements we have with our directors are reviewed and may be modified from
time to time by our board of directors.exv10w1

 

 

    EXHIBIT
10.1

 

    BROADCOM
    CORPORATION

 

    EXECUTIVE OFFICER PERFORMANCE BONUS PLAN

 

		
	
    I.  
	
    PURPOSES
    OF THE PLAN

 

    A.  The Broadcom Corporation Executive Officer
    Performance Bonus Plan (the “Plan”) is intended to
    promote the interests of Broadcom Corporation (the
    “Company”) and its shareholders by establishing a
    compensation program to provide the Company’s executive
    officers with incentive awards that are tied to the achievement
    of specific goals relating to the performance of the Company and
    that are intended to qualify as performance-based compensation
    for purposes of Section 162(m) of the Internal Revenue Code
    of 1986, as amended from time to time (the “Code”).

 

    B.  The Plan shall be in effect for the year ending
    December 31, 2007 and for each of the next four
    (4) years through the year ending December 31, 2011.
    Each year for which the Plan is in effect shall be designated a
    “Plan Year,” and bonuses may be earned under the Plan
    on the basis of the Company’s performance for each Plan
    Year.

 

		
	
    II.  
	
    PLAN
    ADMINISTRATION

 

    A.  The Plan shall be administered by a committee of
    two or more non-employee Board members each of whom shall
    qualify as an “outside director” under Code
    Section 162(m) and
    Section 1.162-27(e)
    of the Treasury Regulations thereunder. Such committee in its
    capacity as administrator of the Plan (the “Plan
    Administrator”) shall have full power and authority
    (subject to the express provisions of the Plan ) to:

 

    (i)  establish the specific performance objectives
    that must be attained for each Plan Year at one or more
    designated levels (e.g. threshold, above-threshold, target and
    above-target) for bonuses to be earned under the Plan for that
    Plan Year;

 

    (ii)  select the eligible individuals who are to
    participate in the Plan for such Plan Year;

 

    (iii)  set the bonus potential for each participant at
    each designated level of performance;

 

    (iv)  determine the actual bonus for each participant
    in an amount not to exceed the participant’s bonus
    potential for the actual level of performance attained for the
    Plan Year; and

 

    (v)  reduce the actual bonus payable to any
    participant below his or her bonus potential for the attained
    level of performance for the Plan Year.

 

    B.  The Plan Administrator shall also have full power
    and authority to interpret and construe the provisions of the
    Plan and adopt rules and regulations for the administration of
    the Plan.

 

    C.  Decisions of the Plan Administrator shall be final
    and binding upon all parties who may have an interest in the
    Plan or any bonus amount payable under the Plan.

 

		
	
    III.  
	
    ELIGIBILITY
    AND PARTICIPATION

 

    A.  The individuals eligible to participate in the
    Plan shall be limited to executive officers of the Company
    subject to the short-swing profit liability provisions of
    Section 16 of the Securities Exchange Act of 1934, as
    amended.

 

    B.  An individual selected for participation in the
    Plan shall cease to be a participant and shall not be entitled
    to any bonus payment under the Plan for a given Plan Year if
    that participant ceases Employee status for any reason prior to
    the date that bonuses for that Plan Year are paid under the Plan
    (the “Distribution Date”); provided, however,
    that the following participants shall receive a portion of the
    actual bonus to which they would otherwise have been entitled
    pursuant to Articles IV and V on the basis of actual
    Company performance had they continued in Employee status
    through the Distribution Date:

 

    (i)  any participant who ceases Employee status prior
    to the Distribution Date by reason of death or Disability;

 

    (ii)  any participant whose Employee status terminates
    under circumstances that entitle that individual to a full or
    pro-rata bonus pursuant to the express terms of any agreement or
    arrangement to which that individual and the Company are
    parties; and

    

    1

 

 

    (iii)  any participant whose Employee status
    terminates under special circumstances that warrant, in the Plan
    Administrator’s sole discretion, a pro-rated bonus award
    under the Plan.

 

    C.  In no event shall the bonus paid to any
    participant pursuant to Paragraph III.B(i) or
    (iii) exceed the dollar amount determined by dividing
    (a) the actual bonus to which that participant would have
    become entitled pursuant to Articles IV and V on the basis
    of actual Company performance had he or she continued in
    Employee status through the Distribution Date by (b) a
    fraction the numerator of which is the number of days such
    individual remained in active Employee status during the
    applicable Plan Period (as defined below) and the denominator of
    which is the total number of days in that Plan Period.

 

    D.  For purposes of this Article III, the
    following definitions shall be in effect:

 

    (i)  A participant shall be deemed to continue in
    “Employee” status for so long as that individual
    remains in the employ of the Company or any subsidiary of the
    Company.

 

    (ii)  A participant shall be deemed to have ceased
    Employee status by reason of a “Disability” if such
    cessation of Employee status is occasioned by his or her absence
    from his or her duties with the Company on a full-time basis for
    120 consecutive business days as a result of incapacity due to
    mental or physical illness which is both (A) determined to
    be total and permanent by two (2) physicians selected by
    the Company or its insurers and acceptable to such participant
    or his or her legal representative, and (B) entitles the
    participant to the payment of long-term disability benefits from
    the Company’s long-term disability plan.

 

    (iii)  The “Plan Period” shall mean the
    period beginning with the first day of the Plan Year and ending
    with the Distribution Date for the bonuses earned for that Plan
    Year.

 

    (vi)  Each corporation (other than the Company) in an
    unbroken chain of corporations beginning with the Company shall
    be considered to be a “subsidiary” of the Company,
    provided that each such corporation (other than the last
    corporation in the unbroken chain) owns, at the time of
    determination, stock possessing more than fifty percent (50%) of
    the total combined voting power of all classes of stock in one
    of the other corporations in such chain.

 

    E.  A participant who is absent from active Employee
    status for a portion of a Plan Period by reason of an authorized
    leave of absence shall not be deemed to have ceased Employee
    status during the period of that leave. However, any bonus to
    which such participant may otherwise become entitled under the
    Plan for that Plan Year may be pro-rated based on the portion of
    the Plan Period during which that individual is in active
    working status and not on such leave of absence, unless the Plan
    Administrator otherwise deems it appropriate under the
    circumstances to provide that individual with a full bonus for
    the Plan Period.

 

		
	
    IV.  
	
    DETERMINATION
    OF PERFORMANCE GOALS AND POTENTIAL BONUS AMOUNTS

 

    A.  Participants will be eligible to receive cash
    awards under the Plan for each Plan Year for which one or more
    performance objectives established for that Plan Year by the
    Plan Administrator are attained. The Plan Administrator shall,
    within the first ninety (90) days of each Plan Year,
    establish the specific performance objectives for that Plan
    Year. In no event may a performance objective be established at
    a time when there exists no substantial uncertainty as to its
    attainment.

 

    B.  For the Plan Year ending December 31, 2007,
    the Plan Administrator shall set the applicable performance
    objectives on the basis of the following measures: (i) net
    revenue, (ii) non-GAAP gross margin, (iii) non-GAAP
    operating margin, (iv) non-GAAP earnings per share and
    (v) non-GAAP free cash flow. In determining whether the
    non-GAAP measures under clauses (ii), (iii), (iv) and
    (v) are attained, the Plan Administrator shall apply the
    dollar amounts that the Company reports for those items in
    accordance with U.S. generally accepted accounting
    principles (“GAAP”), as adjusted for certain non-cash,
    non-recurring, extraordinary and other items set forth in
    Paragraph IV.C.

 

    C.  For each subsequent Plan Year during the term of
    the Plan, the performance objectives may include one or more of
    the measures used as the 2007 Plan Year performance objectives
    as well as one or more of the following: (i) return on
    total shareholder equity; (ii) net income or operating
    income; (iii) earnings before interest, taxes, deprecation,
    amortization and stock-based compensation costs, or operating
    income before depreciation and amortization; (iv) return on
    assets, capital or investment; (v) market share in one or
    more markets; (vi) cost reduction goals; (vii) budget
    comparisons; (viii) implementation or completion of
    projects or processes strategic or critical to the
    Company’s business operations; (ix) measures of
    customer satisfaction; (x) the formation of joint ventures,
    research and development collaborations, marketing or customer
    service collaborations, or the completion of other corporate
    transactions intended to enhance the Company’s revenue or
    profitability or expand its customer base; (xi) completion
    of project milestones;

    

    2

 

    and (xii) any combination of, or a specified increase in,
    any of the foregoing provided, however, that for purposes
    of items (ii) and (vi) above, the Plan Administrator
    may, at the time the performance objects are established,
    specify certain adjustments to such items as reported in
    accordance with GAAP, which will exclude from the calculation of
    those performance objectives one or more of the following:
    certain charges related to acquisitions, stock-based
    compensation, employer payroll tax expense on certain stock
    option exercises, settlement costs, restructuring costs, gains
    or losses on strategic investments, non-operating gains, certain
    other non-cash charges, valuation allowance on deferred tax
    assets, and the related income tax effects, purchases of
    property and equipment, and any extraordinary non-recurring
    items as described in Accounting Principles Board Opinion
    No. 30, provided that such adjustments are in conformity
    with those reported by the Company on a non-GAAP basis. In
    addition, such performance objectives may be based upon the
    attainment of specified levels of the Company’s performance
    under one or more of the measures described above relative to
    the performance of other entities and may also be based on the
    performance of any of the Company’s business groups or
    division thereof or any parent or subsidiary.

 

    B.  For each performance objective, the Plan
    Administrator may establish up to four (4) designated
    levels of attainment: threshold, above-threshold, target and
    above-target levels of attainment. At the time the performance
    objectives for a particular Plan Year are established, the Plan
    Administrator shall also set the bonus potential for each
    participant at each of the designated levels of performance.
    Under no circumstance shall the bonus potential for any
    participant exceed the Maximum Bonus Amount set forth in
    Paragraph V.B.

 

    C.  The Plan Administrator shall also establish the
    maximum bonus pool to be paid in total under the Plan for each
    designated level of performance for a Plan Year. For the Plan
    Year ending December 31, 2007, the maximum bonus pool
    payable at each designated level of performance shall be as
    follows: for performance at the threshold level, the pool shall
    be $0, for performance at the above-threshold level, the pool
    shall be $250,000, for performance at the target level, the pool
    shall be $1,000,000, and for performance at the above-target
    level, the pool shall be $1,500,000. For each subsequent Plan
    Year during the term of the Plan, the maximum total bonus pool
    payable shall be limited to $10,000,000.

 

    D.  The actual bonus pool for each Plan Year shall be
    determined by the Plan Administrator on the basis of the
    Company’s actual performance relative to each of the
    performance objectives established for that Plan Year.
    Accordingly, each performance objective shall be measured
    separately in terms of actual level of attainment and shall be
    weighted, equally or in such other proportion as the Plan
    Administrator shall determine at the time such performance
    objectives are established, in determining the actual total
    bonus pool. For example, if five (5) performance objectives
    are established and weighted equally, then each of those
    objectives attained at target level will contribute to the total
    bonus pool for the Plan Year in an amount equal to twenty
    percent (20%) of the total bonus pool payable at target level
    for that Plan Year, and each objective attained at above-target
    level will contribute to the total bonus pool for that Plan Year
    in an amount equal to twenty percent (20%) of the total bonus
    pool at above-target level. However, no bonus amount shall be
    payable with respect any performance objective, unless the
    Company attains more than the specified threshold level for that
    objective, with such specification to be made by the Plan
    Administrator at the time each performance objective is
    established. If the actual level of attainment for any
    performance objective is between two specified levels, then the
    bonus amount attributable to that performance objective shall be
    interpolated on a straight-line basis.

 

    E.  The Plan Administrator shall certify in writing
    the actual level of attainment of each performance objective for
    the Plan Year before any bonus payments are made for that Plan
    Year under the Plan.

 

		
	
    V.  
	
    INDIVIDUAL
    BONUS AWARDS

 

    A.  The actual bonus to be made to each participant
    will be based on the bonus potential established for such
    individual at the various designated levels of performance for
    the Plan Year. Should the actual level of performance for the
    Plan Year be between two of the designated levels, then the
    participant’s bonus amount will be interpolated on a
    straight-line basis. In no event shall any participant receive a
    bonus in excess of the amount determined on the basis of the
    bonus potential (as interpolated) established for the
    particular level of performance attained for the Plan Year.
    However, the Plan Administrator shall have the discretion to
    reduce or eliminate the bonus that would otherwise be payable to
    one or more participants based upon the certified level of
    attained performance for the Plan Year.

 

    B.  The maximum bonus payment that any one participant
    may receive under the Performance Bonus Plan for a particular
    Plan Year is limited to $2,000,000 (the “Maximum Bonus
    Amount”).

 

    C.  Except as otherwise provided in
    Paragraphs III.B and C, no participant shall accrue any
    right to receive a bonus award under the Plan unless and until
    that participant remains in Employee status through the
    Distribution Date.

    

    3

 

    Accordingly, no bonus payment shall be made to any participant
    who ceases Employee status prior to the Distribution Date,
    provided, however, that the provisions of
    Paragraph III.B and C shall govern the bonus entitlement of
    participants whose Employee status terminates under the various
    circumstances set forth in those provisions.

 

    D.  The Distribution Date for the individual bonus
    amount for each participant shall be as soon as is practicable
    following the determination of the actual performance levels for
    the Plan Year, but in no event later than
    two and one-half (21/2) months
    after the end of such Plan Year or, in the event the audit of
    the Company’s financial statements for the Plan Year cannot
    be completed by the Company’s independent registered public
    accounting firm by that date, as soon as administratively
    practicable following the completion of such audit, but in no
    event beyond the close of the year immediately succeeding such
    Plan Year.

 

    E.  All bonus payments shall be made in cash, subject
    to the Company’s collection of all applicable federal,
    state and local income and employment withholding taxes.

 

		
	
    VI.  
	
    GENERAL
    PROVISIONS

 

    A.  The Plan shall be subject to shareholder approval
    at the 2007 Annual Meeting of Shareholders. Should such
    shareholder approval not be obtained, then the Plan shall not be
    implemented, and no bonus payments hereunder shall be made to
    the Company’s named executive officers for 2007.

 

    B.  The Plan and all rights hereunder shall be
    construed, administered and governed in all respects in
    accordance with the laws of the State of California without
    resort to its
    conflict-of-laws
    provisions. If any provision of the Plan shall be held by a
    court of competent jurisdiction to be invalid or unenforceable,
    the remaining provisions of the Plan shall continue in full
    force and effect.

 

    C.  The Plan Administrator may at any time amend,
    suspend or terminate the Plan, provided such action does not
    adversely affect the rights and interests of participants
    accrued to date under the Plan or otherwise impair their ability
    to earn a bonus award based upon the performance objectives
    established by the Plan Administrator for the then-current Plan
    Year. Any amendment or modification of the Plan shall be subject
    to shareholder approval to the extent required under Code
    Section 162(m) or any other applicable law, regulation or
    listing requirement of any securities exchange on which the
    Company’s Class A common stock is at the time listed
    for trading.

 

    D.  Neither the action of the Company in establishing
    or maintaining the Plan, nor any action taken under the Plan by
    the Plan Administrator, nor any provision of the Plan itself
    shall be construed to grant any person the right to remain in
    Employee status for any period of specific duration, and each
    participant shall at all times remain an Employee at-will and
    may accordingly be discharged at any time, with or without cause
    and with or without advance notice of such discharge.

 

    E.  Should a participant die before payment is made of
    the actual bonus to which he or she has become entitled under
    the Plan, then that bonus shall be paid to the executor or other
    legal representative of his or her estate.

 

    F.  No participant shall have the right to transfer,
    alienate, pledge or encumber his or her interest in the Plan,
    and such interest shall not (to the maximum permitted by law) be
    subject to the claims of the participant’s creditors or to
    attachment, execution or other process of law.

 

    G.  The terms and conditions of the Plan, together
    with the obligations and liabilities of the Company that accrue
    hereunder, shall be binding upon any successor to the Company,
    whether by way of merger, consolidation, reorganization or other
    change in ownership or control of the Company.

 

    H.  No amounts accrued or earned under the Plan shall
    actually be funded, set aside or to otherwise segregated prior
    to actual payment. The obligation to pay the bonuses that
    actually become due and payable under the Plan shall at all
    times be an unfunded and unsecured obligation of the Company.
    Participants shall have the status of general creditors and
    shall look solely and exclusively to the general assets of the
    Company for payment.

 

    I.  Any disputes between the Company and a participant
    arising out of or relating to the Plan, his or her entitlement
    to any bonus award hereunder or the amount or method of payment
    of such award shall be settled exclusively by binding
    arbitration to be held in the county in which the participant is
    (or has most recently been) employed by the Company (or any
    subsidiary) at the time of such arbitration. The arbitration
    proceedings shall be governed by (i) the national rules of
    the American Arbitration Association then in effect for the
    resolution of employment disputes and (ii) the Federal
    Arbitration Act. The decision of the arbitrator shall be final
    and binding on the parties to the arbitration and shall be in
    lieu of the rights those parties may otherwise have to a jury
    trial.

    

    4

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