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Prepared by MERRILL CORPORATION

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Exhibit 10.5    
  

INTEGRATED TELECOM EXPRESS, INC.  

 2001 DIRECTOR OPTION PLAN  

    1.  Purposes of the Plan.  The purposes of this 2001 Director Option Plan are to attract and retain the
best available personnel for service as Outside Directors (as defined herein) of the Company, to provide additional incentive to the Outside Directors of the Company to serve as Directors, and to
encourage their continued service on the Board. 

    All
options granted hereunder shall be nonstatutory stock options. 

    2.  Definitions.  As used herein, the following definitions shall apply: 

    (a) "Board" means the Board of Directors of the Company. 

    (b) "Change of Control" shall mean any merger, acquisition, combination, restructuring and/or reorganization of the
Company (other than an offering of Shares on the open market) in which the stockholders of record of the Company (as a group) immediately prior to the close of such transaction do not, as of the close
of such transaction, hold more than 50% of the then outstanding Shares of the Company (and/or the corporate entity resulting from such transaction). 

    (c) "Code" means the Internal Revenue Code of 1986, as amended. 

    (d) "Common Stock" means the common stock of the Company. 

    (e) "Company" means Integrated Telecom Express, Inc., a Delaware corporation. 

    (f)  "Director" means a member of the Board. 

    (g) "Disability" means total and permanent disability as defined in section 22(e)(3) of the Code. 

    (h) "Employee" means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary
of the Company. The payment of a Director's fee by the Company shall not be sufficient in and of itself to constitute "employment" by the Company. 

    (i)  "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

    (j)  "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: 

    (i)  If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination as reported in The Wall Street Journal or such other source as the Board deems
reliable; 

    (ii) If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock
shall be the mean between the high bid and low asked prices for the Common Stock for the last market trading day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable; or 

    (iii) In
the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board. 

    (k) "Inside Director" means a Director who is an Employee. 

    (l)  "Option" means a stock option granted pursuant to the Plan. 

    (m) "Optioned Stock" means the Common Stock subject to an Option. 

 

    (n) "Optionee" means a Director who holds an Option. 

    (o) "Outside Director" means a Director who is not an Employee. 

    (p) "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code. 

    (q) "Plan" means this 2001 Director Option Plan. 

    (r) "Share" means a share of the Common Stock, as adjusted in accordance with Section 10 of the Plan. 

    (s) "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in
Section 424(f) of the Internal Revenue Code of 1986. 

    3.  Stock Subject to the Plan.  Subject to the provisions of Section 10 of the Plan, the maximum
aggregate number of Shares which may be optioned and sold under the Plan is five hundred thousand (500,000) Shares (the "Pool"). The Shares may be authorized, but unissued, or reacquired Common Stock. 

    If
an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the
Plan. 

    4.  Administration and Grants of Options under the Plan.  

    (a)  Procedure for Grants.  All grants of Options to Outside Directors under this Plan shall be automatic
and nondiscretionary and shall be made strictly in accordance with the following provisions: 

    (i)  No
person shall have any discretion to select which Outside Directors shall be granted Options or to determine the number of Shares to be covered by Options. 

    (ii) Each
Outside Director shall be automatically granted an Option to purchase forty thousand (40,000) Shares (the "First Option") on the date on which such person
first becomes an Outside Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy; provided, however, that current Outside Directors, and
Inside Directors who cease to be Inside Directors but who remain as Directors, shall not receive a First Option. 

    (iii) Each
Outside Director shall be granted an Option to purchase ten thousand (10,000) Shares (a "Subsequent Option") on May 31st of each year, provided that
on such date, he or she is then an Outside Director, except that each Outside Director appointed after the date that this 2001 Director Option Plan is approved by the stockholders of the Company,
shall not be granted a Subsequent Option until the First Option has vested in its entirety. 

    (iv) The
terms of a First Option granted hereunder shall be as follows: 

    (A) the
term of the First Option shall be ten (10) years. 

    (B) the
First Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Sections 8 and 10 hereof. 

    (C) the
exercise price per Share shall be one hundred percent (100%) of the Fair Market Value per Share on the date of grant of the First Option. 

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    (D) subject to Section 10 hereof, the First Option shall become exercisable as to thirty-four (34%) of the Shares subject to the First Option on the
first anniversary of its date of grant, and as to thirty-three (33%) of the Shares subject to the First Option on each of the next two anniversaries of its date of grant, provided that the Optionee
continues to serve as a Director on such dates. 

    (v) The
terms of a Subsequent Option granted hereunder shall be as follows: 

    (A) the
term of the Subsequent Option shall be ten (10) years. 

    (B) the
Subsequent Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in Sections 8 and 10 hereof. 

    (C) the
exercise price per Share shall be one hundred percent (100%) of the Fair Market Value per Share on the date of grant of the Subsequent Option. 

    (D) subject
to Section 10 hereof, the Subsequent Option shall become exercisable as to one hundred percent (100%) of the Shares subject to the Subsequent Option
on the anniversary of its date of grant, provided that the Optionee continues to serve as a Director on such date. 

    (vi) In
the event that any Option granted under the Plan would cause the number of Shares subject to outstanding Options plus the number of Shares previously purchased
under Options to exceed the Pool, then the remaining Shares available for Option grant shall be granted under Options to the Outside Directors on a pro rata basis. No further grants shall be made
until such time, if any, as additional Shares become available for grant under the Plan through action of the Board or the stockholders to increase the number of Shares which may be issued under the
Plan or through cancellation or expiration of Options previously granted hereunder. 

    5.  Eligibility.  Options may be granted only to Outside Directors. All Options shall be automatically
granted in accordance with the terms set forth in Section 4 hereof. 

    The
Plan shall not confer upon any Optionee any right with respect to continuation of service as a Director or nomination to serve as a Director, nor shall it interfere in any way
with any rights which the Director or the Company may have to terminate the Director's relationship with the Company at any time. 

    6.  Term of Plan.  The Plan shall become effective upon its approval by the stockholders of the Company
as described in Section 16 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 11 of the Plan. 

    7.  Form of Consideration.  The consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall consist of (i) cash, (ii) check, (iii) other Shares, provided Shares acquired from the Company, (x) have been owned by the
Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised, (iv) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (v) any
combination of the foregoing methods of payment. 

    8.  Exercise of Option.  

    (a)  Procedure for Exercise; Rights as a Stockholder.  Any Option granted hereunder shall be exercisable
at such times as are set forth in Section 4 hereof; provided, however, that no Options shall be exercisable until stockholder approval of the Plan in accordance with Section 16 hereof
has been obtained. 

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    An
Option may not be exercised for a fraction of a Share. 

    An
Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to
exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may consist of any consideration and method of payment
allowable under Section 7 of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment shall be made for a dividend or
other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan. 

    Exercise
of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised. 

    (b)  Termination of Continuous Status as a Director.  Subject to Section 10 hereof, in the event
an Optionee's status as a Director terminates (other than upon the Optionee's death or Disability), the Optionee may exercise his or her Option, but only within thirty (30) days following the
date of such termination, and only to the extent that the Optionee was entitled to exercise it on the date of such termination (but in no event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not vested as to his or her entire Option on the date of such termination, the Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

    (c)  Disability of Optionee.  In the event Optionee's status as a Director terminates as a result of
Disability, the Optionee may exercise his or her Option, but only within twelve (12) months following the date of such termination, and only to the extent that the Optionee was entitled to
exercise it on the date of such termination (but in no event later than the expiration of its ten (10) year term). To the extent that the Optionee was not vested as to his or her entire Option
on the date of termination, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

    (d)  Death of Optionee.  In the event of an Optionee's death, the Optionee's estate or a person who
acquired the right to exercise the Option by bequest or inheritance may exercise the Option, but only within twelve (12) months following the date of death, and only to the extent that the
Optionee was entitled to exercise it on the date of death (but in no event later than the expiration of its ten (10) year term). To the extent that the Optionee was not vested as to his or her
entire Option on the date of death, the Shares covered by the unvested portion of the Option shall revert to the Plan. To the extent that the Optionee's estate or a person who acquired the right to
exercise such Option does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan. 

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    9.  Non-Transferability of Options.  The Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. 

    10.  Adjustments Upon Changes in Capitalization, Dissolution, Change of Control or Asset Sale.  

    (a)  Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the
number of Shares covered by each outstanding Option, the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which
have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per Share covered by each such outstanding Option, and the number of Shares issuable pursuant to the
automatic grant provisions of Section 4 hereof shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an Option. 

    (b)  Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company,
to the extent that an Option has not been previously exercised, it shall terminate immediately prior to the consummation of such proposed action. 

    (c)  Change of Control or Asset Sale.  In the event of a Change of Control or the sale of substantially
all of the assets of the Company, outstanding Options may be assumed or equivalent options may be substituted by the successor corporation or a Parent or Subsidiary thereof (the "Successor
Corporation"). If an Option is assumed or substituted for, the Option or equivalent option shall continue to be exercisable as provided in Section 4 hereof for so long as the Optionee serves as
a Director or a director of the Successor Corporation. Following such assumption or substitution, if the Optionee's status as a Director or director of the Successor Corporation, as applicable, is
terminated, the Option(s) shall become fully exercisable, including as to Shares for which it would not otherwise be exercisable if the following conditions are met: (i) the Optionee has
offered in writing and is willing to continue to serve as a Director or a director of the Successor Corporation for the duration of the vesting period described in Section 4 hereof;
(ii) the Optionee involved is not then in default of any material obligations to the Company (as to which the Company has provided written notice of default and which default the Optionee has
failed to cure within a reasonable time after such notice); and (iii) the Company (or the Successor Corporation), or the stockholders or directors thereof, do not offer the Optionee a
reasonable opportunity to continue in such capacity following the Change of Control or sale of assets so as to fully vest in all Options granted to such Optionee. Thereafter, the Option(s) shall
remain exercisable in accordance with Sections 8(b) through (d) above. 

    If
the Successor Corporation does not assume an outstanding Option or substitute for it an equivalent option, the Option shall become fully vested and exercisable, including as to
Shares for which it would not otherwise be exercisable. In such event the Board shall notify the Optionee that the Option shall be fully exercisable for a period of thirty (30) days from the
date of such notice, and upon the expiration of such period the Option shall terminate. 

    For
the purposes of this Section 10(c), an Option shall be considered assumed if, following the Change of Control or sale of assets, the Option confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option immediately prior to the Change of Control or sale of assets, the consideration (whether stock, cash, or other securities or property)
received in connection with the 

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Change of Control or sale of assets, by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares). If such consideration received in connection with the Change of Control or sale of assets is not solely common stock of
the successor corporation or its Parent, the Board may, with the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of
Optioned Stock subject to the Option, to be solely common stock of the Successor Corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock
in the connection with the Change of Control or sale of assets. 

    11.  Amendment and Termination of the Plan.  

    (a)  Amendment and Termination.  The Board may at any time amend, alter, suspend, or discontinue the
Plan, but no amendment, alteration, suspension, or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with any applicable law, regulation or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required. 

    (b)  Effect of Amendment or Termination.  Any such amendment or termination of the Plan shall not affect
Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated. 

    12.  Time of Granting Options.  The date of grant of an Option shall, for all purposes, be the date
determined in accordance with Section 4 hereof. 

    13.  Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

    As
a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or distribute such Shares, if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law. 

    Inability
of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 

    14.  Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 

    15.  Option Agreement.  Options shall be evidenced by written option agreements in such form as the Board
shall approve. 

    16.  Stockholder Approval.  The Plan shall be subject to approval by the stockholders of the Company
within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under applicable state and federal law and any stock
exchange rules. 

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Exhibit 10.5Prepared by MERRILL CORPORATION

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Exhibit 10.6    
  

AMENDMENT TO PREFERRED STOCK RIGHTS AGREEMENT  

	1.
	General
Background. In accordance with Section 27 of the Preferred Stock Rights Agreement between Fleet National Bank (the "Rights Agent") and Integrated Telecom
Express, Inc. ("Integrated Telecom") dated April 4, 2001 (the "Agreement"), the Rights Agent and Integrated Telecom desire to amend the Agreement to appoint EquiServe Trust Company, N.A

	2.
	Effectiveness.
This Amendment shall be effective as of                  (the "Amendment") and all defined terms and definitions in the Agreement shall be the same in the
Amendment
except as specifically revised by the Amendment.

	3.
	Revision.
The section in the Agreement entitled "Change of Rights Agent" is hereby deleted in its entirety and replaced with the following: 

Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon
30 days' notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preferred shares by registered or certified mail and to the holders of the Right Certificates
by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days' notice in writing mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Right Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Right Agent. If the Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit such holder's Right Certificate for inspection by the company), then the registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation or trust company organized and doing
business under the laws of the United States, in good standing, which is authorized under such laws to exercise corporate trust of stock transfer powers and is subject to supervision or examination by
federal or state authority and which has individually or combined with affiliate at the time of its appointment as Right Agent a combined capital and surplus of at least
$100 million dollars. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties, and responsibilities as if it had been originally named as Rights Agent
without further act of deed: but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares or Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be. 

	4.
	Except
as amended hereby, the Agreement and all schedules or exhibits thereto shall remain in full force and effect. 

    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed in their names and on their behalf by and through their duly authorized officers, as of this  18 day of October, 2001. 

	Integrated Telecom Express, Inc.	 	Fleet National Bank
	 	 	 	 	 	 	 
	

/s/ James Williams
	
 	

/s/ Michael J. Connor

	By:	 	James Williams	 	By:	 	Michael J. Connor
	Title:	 	CFO	 	Title:	 	Managing Director,

Client Administration
	 	 	 	 	 	 	 
	

 	
 	

 	
 	

EquiServe Trust Company, N.A.
	 	 	 	 	 	 	 
	

 	
 	

 	
 	

/s/ Michael J. Connor

	 	 	 	 	By:	 	Michael J. Connor
	 	 	 	 	Title:	 	Managing Director,

Client Administration

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Exhibit 10.6

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