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8-K - FORM 8-K - MINDSPEED TECHNOLOGIES, INC | a59208e8vk.htm |
Exhibit 10.1
Mindspeed
Technologies, Inc.
2003
Long-Term Incentives Plan,
As
Amended And Restated
As Of
January 24, 2011
Section 1:
Purpose
The purpose of the Mindspeed Technologies, Inc. 2003 Long-Term
Incentives Plan (as amended and restated, the Plan)
is to provide incentive compensation to officers, executives and
other employees, and prospective employees, contractors and
consultants of the Company and its Subsidiaries; to attract and
retain individuals of outstanding ability; and to align the
interests of such persons with the interests of the
Companys shareholders.
Section 2:
Definitions
The following terms, as used herein, shall have the meaning
specified:
Award means an award granted pursuant to
Section 4.
Award Agreement means a letter to a
Participant, together with the terms and conditions applicable
to an Award granted to the Participant, issued by the Company,
as described in Section 6.
Board of Directors means the Board of
Directors of the Company as it may be comprised from time to
time.
Code means the Internal Revenue Code of 1986, and
any successor statute, as it or they may be amended from time to
time.
Committee means the Compensation and
Management Development Committee of the Board of Directors as it
may be comprised from time to time or another committee of the
Board of Directors designated by the Board of Directors to
administer the Plan.
Company means Mindspeed Technologies, Inc., a
Delaware corporation, and any successor corporation.
Conexant means Conexant Systems, Inc., a
Delaware corporation, and any successor corporation.
Employee means, subject to the exclusions set
forth below, an individual who was hired (and advised that he or
she was being hired) directly by the Company or a Subsidiary as
a regular employee and who at the time of grant of an Award
performs regular employment services directly for the Company or
a Subsidiary, but shall not include (a) members of
the Board of Directors who are not also employees of the Company
or a Subsidiary or (b) any individuals who work, or who
were hired to work, or who were advised that they work:
(i) as independent contractors or employees of independent
contractors; (ii) as temporary employees, regardless of the
length of time that they work at the Company or a Subsidiary;
(iii) through a temporary employment agency, job placement
agency, or other third party; or (iv) as part of an
employee leasing arrangement between the Company or a Subsidiary
and any third party. For the purposes of the Plan, the
exclusions described above shall remain in effect even if the
described individual could otherwise be construed as an employee
under any applicable common law.
ERISA means the Employee Retirement Income
Security Act of 1974, as amended.
Exchange Act means the Securities Exchange
Act of 1934, and any successor statute, as it may be amended
from time to time.
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Executive Officer means an Employee who is an
executive officer of the Company as defined in
Rule 3b-7
under the Exchange Act (or any successor provision).
Fair Market Value means the closing sale
price of the Stock as reported on the Nasdaq Stock Market or
such other national securities exchange or automated
inter-dealer quotation system on which the Stock has been duly
listed and approved for quotation and trading on the relevant
date, or if no sale of the Stock is reported for such date, the
next preceding day for which there is a reported sale.
Incentive Stock Option means an option to
purchase Stock that is granted pursuant to Section 4(b) or
pursuant to any other plan of the Company or a Subsidiary that
complies with Code Section 422.
Immediate Family means a participants
spouse and natural, adopted or step-children and grandchildren.
Mindspeed Distribution Date means the date on
which Conexant completes the pro rata distribution of all
outstanding Stock to Conexant shareowners.
Non-Employee means an individual who at the
time of grant of an Award (a) has been extended an offer of
employment with the Company or a Subsidiary but who has not yet
accepted the offer and become an Employee, or (b) performs
consulting, contracting or other services for the Company or a
Subsidiary other than in a capacity as an Employee or who has
been extended an offer to perform consulting, contracting or
other services for the Company or a Subsidiary, but shall not
include members of the Board of Directors.
Non-Qualified Stock Option shall have the
meaning set forth in Section 4(a).
Participant means any Employee or
Non-Employee who has been granted an Award pursuant to the Plan.
Restricted Stock shall have the meaning set
forth in Section 4(c).
Restricted Stock Units shall have the meaning
set forth in Section 4(f).
SARs shall have the meaning set forth in
Section 4(e).
Share Reserve shall have the meaning set
forth in Section 5(a).
Stock means shares of common stock, par value
$.01 per share, of the Company, or any security of the Company
issued in substitution, exchange or lieu thereof.
Subsidiary means any corporation or other
entity in which the Company, directly or indirectly, controls
50% or more of the total combined voting power of such
corporation or other entity.
Ten-Percent Shareholder means any person who
owns, directly or indirectly, on the relevant date, securities
having ten percent (10%) or more of the combined voting power of
all classes of the Companys securities or of its parent or
subsidiaries. For purposes of applying the foregoing ten percent
(10%) limitation, the rules of Code Section 424(d) shall
apply.
Unrestricted Stock shall have the meaning set
forth in Section 4(d).
Section 3:
Eligibility
Persons eligible for Awards shall consist of Employees and
Non-Employees whose performance or potential contribution, in
the judgment of the Committee, will benefit the future success
of the Company
and/or a
Subsidiary. Notwithstanding the foregoing, only Employees will
be eligible for Awards of Incentive Stock Options, Restricted
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Stock, Restricted Stock Units
and/or
Unrestricted Stock under the Plan and only Employees who are
foreign nationals or employed outside the United States will be
eligible for Awards of SARs under the Plan.
Section 4:
Awards
The Committee may grant any of the following types of Awards,
either singly, in tandem or in combination with other types of
Awards, as the Committee may in its sole discretion determine:
a. Non-Qualified Stock Options. A
Non-Qualified Stock Option is an Award to an
Employee or Non-Employee in the form of an option to purchase a
specific number of shares of Stock exercisable at such time or
times, and during such specified time not to exceed ten
(10) years, as the Committee may determine, at a price not
less than 100% of the Fair Market Value of the Stock on the date
the option is granted.
(i) The purchase price of the Stock subject to the option
may be paid in cash. At the discretion of the Committee, the
purchase price may also be paid by the tender of Stock (the
value of such Stock shall be its Fair Market Value on the date
of exercise), or through a combination of Stock and cash, or
through such other means as the Committee determines are
consistent with the Plans purpose and applicable law. No
fractional shares of Stock will be issued or accepted.
(ii) Without limiting the foregoing, the Committee may
permit Participants, either on a selective or aggregate basis,
to simultaneously exercise options and sell the shares of Stock
thereby acquired, pursuant to a brokerage or similar arrangement
approved in advance by the Committee, and use the proceeds from
such sale as payment of the purchase price of such Stock and any
applicable withholding taxes.
(iii) Dividends and dividend equivalents shall not be paid
on Non-Qualified Stock Options.
b. Incentive Stock Options. An Incentive Stock
Option is an Award to an Employee in the form of an option to
purchase a specified number of shares of Stock that complies
with the requirements of Code Section 422, which option
shall, subject to the following provisions, be exercisable at
such time or times, and during such specified time, as the
Committee may determine.
(i) The aggregate Fair Market Value (determined at the time
of the grant of the Award) of the shares of Stock subject to
Incentive Stock Options which are exercisable by one person for
the first time during a particular calendar year shall not
exceed $100,000.
(ii) No Incentive Stock Option may be granted under the
Plan after June 27, 2013.
(iii) No Incentive Stock Option may be exercisable more
than:
(A) in the case of an Employee who is not a Ten-Percent
Shareholder on the date the option is granted, ten
(10) years after the date the option is granted, and
(B) in the case of an Employee who is a Ten-Percent
Shareholder on the date the option is granted, five
(5) years after the date the option is granted.
(iv) The exercise price of any Incentive Stock Option shall
not be less than:
(A) in the case of an Employee who is not a Ten-Percent
Shareholder on the date the option is granted, the Fair Market
Value of the Stock subject to the option on such date; and
(B) in the case of an Employee who is a Ten-Percent
Shareholder on the date the option is granted, 110% of the Fair
Market Value of the Stock subject to the option on such date.
(v) The Committee may provide that the exercise price of an
Incentive Stock Option may be paid by one or more of the methods
available for paying the exercise price of a Non-Qualified Stock
Option.
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(vi) Dividends and dividend equivalents shall not be paid
on Incentive Stock Options.
c. Restricted Stock. Restricted Stock is an
Award of Stock that is issued to an Employee subject to
restrictions on transfer and such other restrictions on
incidents of ownership as the Committee may determine. Subject
to such restrictions, a Participant as owner of shares of
Restricted Stock shall have the rights of a holder of shares of
Stock, except that the Committee shall provide at the time of
the Award that any dividends or other distributions paid on the
Restricted Stock while subject to such restrictions shall be
reinvested in Stock and held subject to the same restrictions as
the Restricted Stock and such other terms and conditions as the
Committee shall determine. Shares of Restricted Stock shall be
registered in the name of the Participant and, at the
Companys sole discretion, (i) shall be held in
book-entry form subject to the Companys instructions until
the restrictions relating thereto lapse, or (ii) shall be
evidenced by a certificate, which shall bear an appropriate
restrictive legend, shall be subject to appropriate
stop-transfer orders and shall be held in custody by the Company
until the restrictions relating thereto lapse, and the
Participant shall deliver to the Company a stock power endorsed
in blank relating to the Restricted Stock.
d. Unrestricted Stock. Unrestricted Stock is an
Award of Stock that is issued to an Employee without any
restrictions, as the Committee in its sole discretion shall
determine, including the issuance of Unrestricted Stock pursuant
to awards conditioned upon the achievement of performance or
other vesting requirements (as may be established by the
Committee) prior to the delivery of such Unrestricted Stock. A
Participant shall not be required to make any payment for
Unrestricted Stock. Upon receipt of shares of Unrestricted
Stock, the Participant as owner of such shares shall have the
rights of a holder of shares of Stock, including the right to
vote the Unrestricted Stock and to receive dividends and
distributions thereon.
e. Stock Appreciation Rights (SARs). A SAR is
the right to receive a payment measured by the increase in the
Fair Market Value of a specified number of shares of Stock from
the date of grant of the SAR to the date on which the Employee
exercises the SAR. The payment to which the Employee is entitled
on exercise of a SAR may be in cash, in Stock valued at Fair
Market Value on the date of exercise or partly in cash and
partly in Stock, as the Committee may determine. Dividends and
dividend equivalents shall not be paid on SARs. No SAR may be
exercisable more than ten (10) years after the date the SAR is
granted.
f. Restricted Stock Units. A Restricted Stock
Unit is an Award which may be earned in whole or in part upon
the passage of time or the attainment of performance criteria
established by the Committee and which may be settled for cash,
Stock or other securities or a combination of cash, Stock or
other securities as established by the Committee. Dividend
equivalents declared prior to the settlement of Restricted Stock
Units shall not be paid until the settlement of the underlying
Restricted Stock Units.
Section 5:
Shares of Stock Available Under Plan
a. Subject to the provisions set forth in
Section 9, the maximum aggregate number of shares of Stock
which may be issued pursuant to all Awards (including Incentive
Stock Options) shall be 9,694,284 shares of Stock (the
Share Reserve). Notwithstanding the foregoing, any
Awards other than options (whether Non-Qualified Stock Options
or Incentive Stock Options) and SARs granted after the 2011
annual meeting of the Companys shareholders shall count
against the Share Reserve set forth herein as one and
twenty-eight one hundredths (1.28) shares of Stock for every one
(1) share of Stock subject to such Award. Any shares of
Stock that pursuant to Section 5(b) again become available
for grant upon the forfeiture, repurchase, cancellation or
expiration of an Award that originally counted as one and
twenty-eight one hundredths (1.28) shares of Stock upon grant
shall be added back to the Share Reserve as one and twenty-eight
one hundredths (1.28) shares of Stock for every one
(1) share of Stock forfeited, repurchased, cancelled or
expired or deemed not to have been issued from the Plan pursuant
to Section 5(b). Options (whether Non-Qualified Stock
Options or Incentive Stock Options) and SARs shall be counted
against the Share Reserve as one (1) share of Stock for
every one (1) share of Stock subject to such Award (and
shall be added back to the Share Reserve as one (1) share
of Stock for every one (1) share of Stock subject to such
Awards that is forfeited, repurchased, cancelled or expired or
deemed not to have been issued from the Plan pursuant to
Section 5(b). The shares of Stock to be issued pursuant to
Awards may be authorized, but
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unissued, or reacquired Stock. No single Participant shall
receive, in any one calendar year, Awards (whether Non-Qualified
Stock Options, Incentive Stock Options, Restricted Stock,
Restricted Stock Units (to the extent settled in Stock), SARs
(to the extent settled in Stock) or Unrestricted Stock) with
underlying shares of Stock exceeding three hundred thousand
(300,000) shares of Stock, subject to adjustment as set forth in
Section 9.
b. Any shares of Stock covered by an Award (or
portion of an Award) which is forfeited, canceled or expires
shall be deemed not to have been issued for purposes of
determining the Share Reserve. Shares of Stock that actually
have been issued under the Plan pursuant to an Award shall not
be returned to the Plan and shall not become available for
future issuance under the Plan, except that if unvested shares
of Stock are forfeited, or repurchased by the Company at the
lower of their original purchase price or their Fair Market
Value at the time of repurchase, such shares of Stock shall
become available for future grant under the Plan.
Notwithstanding anything to the contrary contained herein:
(i) shares of Stock tendered or withheld in payment of an
option exercise price shall not be returned to the Plan and
shall not become available for future issuance under the Plan;
(ii) shares of Stock withheld by the Company to satisfy any
tax withholding obligation shall not be returned to the Plan and
shall not become available for future issuance under the Plan;
and (iii) all shares of Stock covered by the portion of a
SAR that is exercised (whether or not shares of Stock are
actually issued to the Participant upon exercise of the SAR)
shall be considered issued pursuant to the Plan.
Section 6:
Award Agreements.
Each Award under the Plan shall be evidenced by an Award
Agreement. Each Award Agreement shall set forth the number of
shares of Stock subject to the Award and shall include the terms
set forth below and such other terms and conditions applicable
to the Award, as determined by the Committee, not inconsistent
with the terms of the Plan. Notwithstanding the foregoing, the
provisions of subsection (b) below may be modified to the
extent deemed advisable by the Committee in Award Agreements
pertaining to Non-Employees providing consulting, contracting or
other services to the Company or a Subsidiary. In the event of
any conflict between an Award Agreement and the Plan, the terms
of the Plan shall govern.
a. Transferability. A provision stating that an
Award may not be transferred or assigned other than (i) by
will or by the laws of descent and distribution; or (ii) by
gift to members of the Participants Immediate Family or to
a trust established for the benefit of one or more members of
the Participants Immediate Family.
b. Termination of Employment.
(i) A provision describing the treatment of an Award in the
event of the Retirement, Disability, death or other termination
of a Participants employment with the Company or a
Subsidiary, including, but not limited to, the definitions of
Retirement and Disability and terms relating to the vesting,
time for exercise, forfeiture or cancellation of an Award in
such circumstances. Participants who terminate employment due to
Retirement, Disability or death prior to the satisfaction of
applicable conditions and restrictions associated with their
Awards may be entitled to prorated Awards as and to the extent
determined by the Committee.
(ii) A provision describing the treatment of an Award in
the event of (A) a transfer of an Employee from the Company
to a Subsidiary or an affiliate of the Company, whether or not
incorporated, or vice versa, or from one Subsidiary or affiliate
of the Company to another or (B) a leave of absence, duly
authorized in writing by the Company.
(iii) A provision stating that in the event the
Participants employment is terminated for Cause (as
defined in the Award Agreement), anything else in the Plan or
Award Agreement to the contrary notwithstanding, all Awards
granted to the Participant shall immediately terminate and be
forfeited.
c. Rights as a Shareholder. A provision stating
that a Participant shall have no rights as a shareholder with
respect to any Stock covered by an Award until the date the
Participant becomes the holder of record thereof. Except
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as provided in Section 9, no adjustment shall be made for
dividends or other rights, unless the Award Agreement
specifically requires such adjustment.
d. Withholding. A provision requiring the
withholding of applicable taxes required by law from all amounts
paid in satisfaction of an Award. A Participant may satisfy the
withholding obligation by paying the amount of any taxes in cash
or, with the approval of the Committee, shares of Stock may be
delivered to the Company or deducted from the payment or, in
accordance with Section 4(a)(ii), sold to satisfy the
obligation in full or in part. If such tax withholding
obligation is paid in shares of Stock, tax amounts shall be
limited to the statutory minimum as required by law.
e. Treatment of Options. Each Award of an
option shall state whether it will or will not be treated as an
Incentive Stock Option.
f. Performance Conditions. The Committee may
condition, or provide for the acceleration of, the
exercisability or vesting of any Award upon such prerequisites
as it, in its sole discretion, deems appropriate, including, but
not limited to, achievement of specific objectives, whether
absolute or relative to a peer group or index designated by the
Committee, with respect to one or more measures of the
performance of the Company
and/or one
or more Subsidiaries, including, but not limited to, earnings
per share, revenue, net income, net operating income, earnings
before interest, taxes, depreciation and amortization (EBITDA),
stock price, total shareholder return, operating margin, gross
margin, return on equity, return on assets, return on
investment, operating income, pre-tax profit, cash flow,
expenses, earnings before interest, taxes and depreciation,
economic value added and market share. At the time it sets the
performance measures, the Committee may determine to include or
exclude extraordinary, unusual, nonrecurring or other items.
Such performance objectives shall be determined in accordance
with the Companys audited financial statements, to the
extent applicable, and so that a third party having knowledge of
the relevant facts could determine whether such performance
objectives are met.
Section 7:
Amendment and Termination
The Board of Directors may at any time amend, suspend or
discontinue the Plan, in whole or in part, provided,
however, that no such action shall be effective without
the approval of the shareholders of the Company to the extent
that such approval is necessary to comply with any tax or
regulatory requirement applicable to the Plan; and
provided, further, that subject to Section 9,
no such action shall impair the rights of any holder of an Award
without the holders consent. The Committee may at any time
alter or amend any or all Awards and Award Agreements under the
Plan to the extent permitted by law, except that, subject to the
provisions of Section 9, no such alteration or amendment
shall impair the rights of any holder of an Award without the
holders consent. Notwithstanding the foregoing and subject
to Section 10(n), no such action may, without approval of
the shareholders of the Company, increase the number of shares
of Stock with respect to which Awards may be granted or reduce
the exercise price of any Option or SAR below Fair Market Value
on the date of grant.
Section 8:
Administration
a. The Plan and all Awards shall be administered by the
Committee. The members of the Committee shall be designated by
the Board of Directors from among its members who are not
eligible for Awards under the Plan.
b. Any member of the Committee who, at the time of any
proposed grant of one or more Awards, is not a
Non-Employee Director as defined in
Rule 16b-3(b)(3)(i)
under the Exchange Act (or any successor provision) shall
abstain from and take no part in the Committees action on
the proposed grant.
c. The Committee and others to whom the Committee has
delegated such duties shall keep a record of all their
proceedings and actions and shall maintain all such books of
account, records and other data as shall be necessary for the
proper administration of the Plan.
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d. The Company shall pay all reasonable expenses of
administering the Plan, including, but not limited to, the
payment of professional fees.
e. The Committee may appoint such accountants, counsel and
other experts as it deems necessary or desirable in connection
with the administration of the Plan. Subject to the express
provisions of the Plan, the Committee may delegate to the
officers or employees of the Company and its Subsidiaries the
authority to execute and deliver such instruments and documents,
to do all such acts and things, and to take all such other steps
deemed necessary, advisable or convenient for the effective
administration of the Plan in accordance with its terms and
purpose.
f. The Committee may adopt such procedures and
sub-plans as
are necessary or appropriate to permit participation in the Plan
by employees who are foreign nationals or employed outside the
U.S. Without limiting the foregoing, the Committee may
authorize supplementary plans applicable to Employees subject to
the tax laws of one or more countries other than the United
States in order to provide for the grant of Non-Qualified Stock
Options, Restricted Stock, Restricted Stock Units, Unrestricted
Stock or SARs to such Employees on terms and conditions,
consistent with the Plan, determined by the Committee which may
differ from the terms and conditions of other Awards in those
forms pursuant to the Plan for the purpose of complying with the
conditions for qualification of Awards for favorable treatment
under foreign tax laws.
g. Subject to the express provisions of the Plan, the
Committee shall have the power (i) to implement (including
the power to delegate such implementation to appropriate
officers of the Company), interpret and construe the Plan and
Awards and Award Agreements or other documents defining the
rights and obligations of the Company and Participants hereunder
and thereunder, (ii) to determine all questions arising
hereunder and thereunder, and (iii) to adopt and amend such
rules and regulations for the administration hereof and thereof
as it may deem desirable. The interpretation and construction by
the Committee of any provisions of the Plan or of any Award or
Award Agreement shall be conclusive and binding. Any action
taken by, or inaction of, the Committee relating to the Plan or
any Award or Award Agreement shall be within the discretion of
the Committee and shall be conclusive and binding upon all
persons. Subject only to compliance with the express provisions
hereof, the Committee may act in its discretion in matters
related to the Plan and any and all Awards and Award Agreements.
The Committees determinations under the Plan need not be
uniform and may be made by it selectively among Employees and
Non-Employees who receive, or who are eligible to receive,
Awards under the Plan, whether or not such persons are similarly
situated.
h. It is the intent of the Company that the Plan and Awards
hereunder satisfy, and be interpreted in a manner that satisfy,
in the case of Participants who are or may be Executive
Officers, the applicable requirements of
Rule 16b-3
under the Exchange Act, so that such persons will be entitled to
the benefits of
Rule 16b-3,
or other exemptive rules under Section 16 of the Exchange
Act, and will not be subjected to avoidable liability under
Section 16(b) of the Exchange Act.
i. The Committee may delegate, and revoke the delegation
of, all or any portion of its authority and powers under the
Plan to the Chief Executive Officer of the Company, except that
the Committee may not delegate any discretionary authority with
respect to substantive decisions or functions regarding the Plan
or Awards to the extent (i) related to Awards granted to
Executive Officers, (ii) inconsistent with the intent
expressed in Section 8(h) or (iii) prohibited by
applicable law.
Section 9:
Adjustment Provisions
a. In the event of any change in or affecting the
outstanding shares of Stock by reason of a stock dividend or
split, recapitalization, reclassification, merger or
consolidation (whether or not the Company is a surviving
corporation), reorganization, combination or exchange of shares
or other similar corporate changes or an extraordinary dividend
in cash, securities or other property, the Board of Directors
shall make or take such amendments to the Plan and outstanding
Awards and Award Agreements and such adjustments and actions
hereunder and thereunder as it deems appropriate, in its sole
discretion, under the circumstances, and its determination in
that respect shall be final and binding. Such amendments,
adjustments and actions may include, but are not limited to,
changes in the number of
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shares of Stock (or other securities) then remaining subject to
the Plan, and the maximum number of shares that may be delivered
to any single Participant pursuant to the Plan, including those
that are then covered by outstanding Awards, or accelerating the
vesting of outstanding Awards. No fractional interests will be
issued under the Plan resulting from any adjustments.
b. The Committee shall make any further adjustments as it
deems necessary to ensure equitable treatment of any holder of
an Award as the result of any transaction affecting the
securities subject to the Plan not described in (a), or as is
required or authorized under the terms of any applicable Award
Agreement.
c. The existence of the Plan and the Awards granted
hereunder shall not affect or restrict in any way the right or
power of the Board of Directors or the shareholders of the
Company to make or authorize any adjustment, recapitalization,
reorganization or other change in its capital structure or its
business, any merger or consolidation of the Company, any issue
of bonds, debentures, preferred or prior preference stock or
other securities ahead of or affecting the Stock or the rights
thereof, the dissolution or liquidation of the Company or any
sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding.
Section 10:
Miscellaneous
a. Other Payments or Awards. Nothing contained
in the Plan shall be deemed in any way to limit or restrict the
Company or a Subsidiary from making any award or payment to any
person under any other plan, arrangement or understanding,
whether now existing or hereafter in effect.
b. Payments to Other Persons. If payments are
legally required to be made to any person other than the person
to whom any amount is made available under the Plan, payments
shall be made accordingly. Any such payment shall be a complete
discharge of the liability hereunder.
c. Unfunded Plan. The Plan shall be unfunded.
No provision of the Plan or any Award or Award Agreement shall
require the Company or a Subsidiary, for the purpose of
satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor
shall the Company or a Subsidiary maintain separate bank
accounts, books, records or other evidence of the existence of a
segregated or separately maintained or administered fund for
such purposes. Participants shall have no rights under the Plan
other than as unsecured general creditors of the Company or a
Subsidiary, except that insofar as they may have become entitled
to payment of additional compensation by performance of
services, they shall have the same rights as other employees or
consultants, as applicable, under generally applicable law.
d. Limits of Liability. Any liability of the
Company or a Subsidiary to any Participant with respect to an
Award shall be based solely upon contractual obligations created
by the Plan and the Award Agreement. Neither the Company or its
Subsidiaries, nor any member of the Board of Directors or of the
Committee, nor any other person participating in any
determination of any question under the Plan, or in the
interpretation, administration or application of the Plan, shall
have any liability to any party for any action taken, or not
taken, in good faith under the Plan.
e. Rights of Employees and
Non-Employees. Status as an eligible Employee or
Non-Employee shall not be construed as a commitment that any
Award shall be made under the Plan to such eligible Employee or
Non-Employee or to eligible Employees or Non-Employees
generally. Nothing contained in the Plan or in any Award
Agreement shall confer upon any Employee or Non-Employee any
right to continue in the employ or other service of or, in the
case of prospective employees, contractors or consultants,
become employed by or render service to the Company or a
Subsidiary or constitute any contract or limit in any way the
right of the Company or a Subsidiary to change such
persons compensation or other benefits or, in the case of
prospective employees, contractors or consultants, prospective
compensation or benefits or to terminate the employment or other
service or, in the case of prospective employees, contractors or
consultants, withdraw an offer of employment or offer to retain
such person with or without cause.
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f. Section Headings. The section headings
contained herein are for the purpose of convenience only, and in
the event of any conflict, the text of the Plan, rather than the
section headings, shall control.
g. Gender, Etc. In interpreting the Plan, the
masculine gender shall include the feminine, the neuter gender
shall include the masculine or feminine, and the singular shall
include the plural unless the context clearly indicates
otherwise.
h. Invalidity. If any term or provision
contained herein or in any Award Agreement shall to any extent
be invalid or unenforceable, such term or provision, to the
extent practicable, will be reformed so that it is valid and as
consistent as possible with the original provisions hereof, and
such invalidity or unenforceability shall not affect any other
provision or part thereof.
i. Applicable Law. The Plan, the Award
Agreements and all actions taken hereunder or thereunder shall
be governed by, and construed in accordance with, the laws of
the State of Delaware without regard to the conflict of law
principles thereof.
j. Compliance with Laws. Notwithstanding
anything contained herein or in any Award Agreement to the
contrary, the Company shall not be required to sell or deliver
shares of Stock or other securities hereunder or thereunder if
the sale or delivery thereof would constitute a violation by the
Participant or the Company of any provisions of any law or
regulation of any governmental authority or any national
securities exchange or interdealer quotation system, and as a
condition of any sale or delivery the Company may require such
agreements or undertakings, if any, as the Company may deem
necessary or advisable in its discretion to assure compliance
with any such law or regulation.
k. Effective Date and Term. The Plan was
adopted by the Board of Directors of the Company and approved by
the sole shareholder of the Company to be effective as of the
Mindspeed Distribution Date. The Plan shall remain in effect
until all Awards granted under the Plan have been exercised or
terminated under the terms of the Plan and applicable Award
Agreements, provided that Awards under the Plan may only be
granted within ten (10) years from the effective date of
the Plan.
l. Awards for Compensation Purposes Only. The
Plan is not intended to constitute an employee benefit
plan within the meaning of Section 3(3) of ERISA.
m. Plan History. The Plan was amended and
restated effective July 1, 2008 to adjust (in accordance
with Section 9 of the Plan) the number of shares of Stock
available under the Plan, the limits on the number of shares of
Stock that may be granted as certain Awards and the annual
limits of Awards that may be granted to Participants (as set
forth in Section 5(a) of the Plan) after giving effect to a
1-for-5
reverse stock split of the Companys Stock, which became
effective at 11:59 p.m. EDT on June 30, 2008. Such
amendment and restatement was not subject to the approval of the
Companys shareholders.
n. Repricings. Except in connection with a
corporate transaction (including, without limitation, any stock
dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation,
split-up,
spin-off, combination or exchange of shares), the terms of
outstanding Awards may not be amended to reduce the exercise
price of outstanding Incentive Stock Options, Non-Qualified
Stock Options or SARs or cancel outstanding Incentive Stock
Options, Non-Qualified Stock Options or SARs in exchange for
cash, other Awards or Incentive Stock Options, Non-Qualified
Stock Options or SARs with an exercise price that is less than
the exercise price of the original Incentive Stock Options,
Non-Qualified Stock Options or SARs without shareholder approval.
9