EXHIBIT 10.10
MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
TABLE OF CONTENTS
PAGE
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Purpose........................................................................................................ 1
ARTICLE 1 Definitions................................................................................... 1
ARTICLE 2 Selection, Enrollment, Eligibility............................................................ 9
2.1 Selection by Committee........................................................................ 9
2.2 Enrollment Requirements....................................................................... 9
2.3 Eligibility/Commencement of Participation..................................................... 9
2.4 Termination of Participation and/or Deferrals................................................. 9
ARTICLE 3 Deferral Commitments/Company Matching/Crediting/Taxes......................................... 9
3.1 Minimum Deferrals............................................................................. 9
3.2 Maximum Deferrals............................................................................. 10
3.3 Election to Defer/Effect of Election Form..................................................... 11
3.4 Withholding of Annual Deferral Amounts........................................................ 12
3.5 Annual Company Contribution Amount............................................................ 12
3.6 Annual Company Matching Amount................................................................ 13
3.7 Stock Option Amount........................................................................... 13
3.8 Restricted Stock Amount....................................................................... 13
3.9 Rollover Amount............................................................................... 13
3.10 Investment of Trust Assets.................................................................... 14
3.11 Sources of Stock.............................................................................. 14
3.12 Vesting....................................................................................... 14
3.13 Crediting/Debiting of Account Balances........................................................ 15
3.14 FICA and Other Taxes.......................................................................... 18
3.15 Distribution.................................................................................. 18
ARTICLE 4 Short-Term Payout/Unforeseeable Financial Emergencies/Withdrawal Election; 401(k) Roll-Over... 18
4.1 Short-Term Payout............................................................................. 18
4.2 Other Benefits Take Precedence Over Short-Term................................................ 19
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies......................... 19
4.4 Withdrawal Election........................................................................... 19
ARTICLE 5 Retirement Benefit............................................................................ 20
5.1 Retirement Benefit............................................................................ 20
5.2 Payment of Retirement Benefit................................................................. 20
5.3 Death Prior to Completion of Retirement Benefit............................................... 20
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MINDSPEED TECHNOLOGIES, INC.
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Master Plan Document
ARTICLE 6 Pre-Retirement Survivor Benefit............................................................... 20
6.1 Pre-Retirement Survivor Benefit............................................................... 20
6.2 Payment of Pre-Retirement Survivor Benefit.................................................... 20
ARTICLE 7 Termination Benefit........................................................................... 21
7.1 Termination Benefit........................................................................... 21
7.2 Payment of Termination Benefit................................................................ 21
ARTICLE 8 Disability Waiver and Benefit................................................................. 21
8.1 Disability Waiver............................................................................. 21
8.2 Continued Eligibility/Disability Benefit...................................................... 22
ARTICLE 9 Beneficiary Designation....................................................................... 22
9.1 Beneficiary................................................................................... 22
9.2 Beneficiary Designation/Change/Spousal Consent................................................ 22
9.3 Acknowledgement............................................................................... 22
9.4 No Beneficiary Designation.................................................................... 22
9.5 Doubt as to Beneficiary....................................................................... 23
9.6 Discharge of Obligations...................................................................... 23
ARTICLE 10 Leave of Absence.............................................................................. 23
10.1 Paid Leave of Absence......................................................................... 23
10.2 Unpaid Leave of Absence....................................................................... 23
ARTICLE 11 Termination, Amendment or Modification........................................................ 23
11.1 Termination................................................................................... 23
11.2 Amendment..................................................................................... 24
11.3 Plan Agreement................................................................................ 24
11.4 Effect of Payment............................................................................. 24
ARTICLE 12 Administration................................................................................ 25
12.1 Committee Duties.............................................................................. 25
12.2 Administration Upon Change In Control......................................................... 25
12.3 Agents........................................................................................ 25
12.4 Binding Effect of Decisions................................................................... 25
12.5 Indemnity of Committee........................................................................ 26
12.6 Employer Information.......................................................................... 26
ARTICLE 13 Other Benefits and Agreements................................................................. 26
13.1 Coordination with Other Benefits.............................................................. 26
ARTICLE 14 Claims Procedures............................................................................. 26
14.1 Presentation of Claim......................................................................... 26
14.2 Notification of Decision...................................................................... 26
14.3 Review of a Denied Claim...................................................................... 27
14.4 Decision on Review............................................................................ 27
14.5 Legal Action.................................................................................. 27
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
ARTICLE 15 Trust......................................................................................... 28
15.1 Establishment of the Trust.................................................................... 28
15.2 Interrelationship of the Plan and the Trust................................................... 28
15.3 Distributions From the Trust.................................................................. 28
15.4 Stock Transferred to the Trust................................................................ 28
ARTICLE 16 Miscellaneous................................................................................. 28
16.1 Status of Plan................................................................................ 28
16.2 Unsecured General Creditor.................................................................... 28
16.3 Employer's Liability.......................................................................... 29
16.4 Nonassignability.............................................................................. 29
16.5 Not a Contract of Employment.................................................................. 29
16.6 Furnishing Information........................................................................ 29
16.7 Terms......................................................................................... 29
16.8 Captions...................................................................................... 29
16.9 Governing Law................................................................................. 29
16.10 Notice........................................................................................ 29
16.11 Successors.................................................................................... 30
16.12 Spouse's Interest............................................................................. 30
16.13 Validity...................................................................................... 30
16.14 Incompetent................................................................................... 30
16.15 Court Order................................................................................... 30
16.16 Distribution in the Event of Taxation......................................................... 31
16.17 Insurance..................................................................................... 31
16.18 Legal Fees To Enforce Rights After Change in Control.......................................... 31
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
MINDSPEED TECHNOLOGIES, INC.
DEFERRED COMPENSATION PLAN
Effective June 27, 2003
PURPOSE
The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of Mindspeed Technologies, Inc., a Delaware corporation, and its
subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA.
ARTICLE 1
DEFINITIONS
For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a credit on
the records of the Employer equal to the sum of (i) the Deferral Account
balance, (ii) the vested Company Contribution Account balance, (iii) the
Company Matching Account balance, (iv) the Stock Option Account balance,
(v) the Restricted Stock Account balance and (vi) the Rollover Account.
The Account Balance, and each other specified account balance, shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to a Participant,
or his or her designated Beneficiary, pursuant to this Plan.
1.2 "Annual Bonus" shall mean any compensation, in addition to Base Annual
Salary relating to services performed during any calendar year, whether or
not paid in such calendar year or included on the Federal Income Tax Form
W-2 for such calendar year, payable to a Participant as an Employee under
any Employer's annual bonus and cash incentive plans, excluding stock
options and restricted stock.
1.3 "Annual Company Contribution Amount" shall mean, for any one Plan Year,
the amount determined in accordance with Section 3.5.
1.4 "Annual Company Matching Amount" shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.6.
1.5 "Annual Deferral Amount" shall mean that portion of a Participant's Base
Annual Salary, Annual Bonus and Directors Fees that a Participant elects
to have, and is deferred, in accordance with Article 3, for any one Plan
Year. In the event of a Participant's Retirement, Disability (if deferrals
cease in accordance with Section 8.1), death or a Termination of
Employment prior to
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
the end of a Plan Year, such year's Annual Deferral Amount shall be the
actual amount withheld prior to such event.
1.6 "Annual Installment Method" shall be an annual installment payment over
the number of years selected by the Participant in accordance with this
Plan, calculated as follows: The Account Balance of the Participant shall
be calculated as of the close of business on the last business day of the
year. The annual installment shall be calculated by multiplying this
balance by a fraction, the numerator of which is one, and the denominator
of which is the remaining number of annual payments due the Participant.
By way of example, if the Participant elects a 10-year Annual Installment
Method, the first payment shall be 1/10 of the Account Balance, calculated
as described in this definition. The following year, the payment shall be
1/9 of the Account Balance, calculated as described in this definition.
Each annual installment shall be paid on or as soon as practicable after
the last business day of the applicable year.
1.7 "Annual Restricted Stock Amount" shall mean, with respect to a Participant
for any one Plan Year, the value of unvested restricted stock under any
Company stock incentive plan, deferred in accordance with Section 3.8 of
this Plan.
1.8 "Annual Stock Option Amount" shall mean, with respect to a Participant for
any one Plan Year, the amount of Qualifying Gains deferred on Eligible
Stock Option exercise in accordance with Section 3.7 of this Plan,
calculated using the closing price of Stock as of the end of the business
day closest to the date of such Eligible Stock Option exercise
1.9 "Base Annual Salary" shall mean the annual cash compensation relating to
services performed during any calendar year, whether or not paid in such
calendar year or included on the Federal Income Tax Form W-2 for such
calendar year, excluding bonuses, commissions, overtime, fringe benefits,
stock options, relocation expenses, incentive payments, non-monetary
awards, directors fees and other fees, automobile and other allowances
paid to a Participant for employment services rendered (whether or not
such allowances are included in the Employee's gross income). Base Annual
Salary shall be calculated before reduction for compensation voluntarily
deferred or contributed by the Participant pursuant to all qualified or
non-qualified plans of any Employer and shall be calculated to include
amounts not otherwise included in the Participant's gross income under
Code Sections 125, 132(f)(4), 402(e)(3), 402(h), or 403(b) pursuant to
plans established by any Employer; provided, however, that all such
amounts will be included in compensation only to the extent that, had
there been no such plan, the amount would have been payable in cash to the
Employee.
1.10 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, that are entitled to
receive benefits under this Plan upon the death of a Participant.
1.11 "Beneficiary Designation Form" shall mean the form established from time
to time by the Committee that a Participant completes, signs and returns
to the Committee to designate one or more Beneficiaries.
1.12 "Board" shall mean the board of directors of the Company.
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Deferred Compensation Plan
Master Plan Document
1.13 "Change in Control" shall mean the first to occur of any of the following
events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more
of either (A) the then outstanding shares of Common Stock of
the Employer (the "Outstanding Employer Common Stock") or (B)
the combined voting power of the then outstanding voting
securities of the Employer entitled to vote generally in the
election of directors (the "Outstanding Employer Voting
Securities"); provided, however, that for purposes of this
subparagraph (a), the following acquisitions shall not
constitute a Change in Control: (v) any acquisition directly
from the Employer, (w) any acquisition by the Employer, (x)
any acquisition by Conexant Systems, Inc. ("Conexant"); (y)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Employer, Conexant, or
any corporation controlled by the Employer or Conexant or (z)
any acquisition pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (c) of this Section
1.13; or
(b) Individuals who, as of the date this Trust is established
constitute the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board of Directors; provided, however, that any individual
becoming a director subsequent to that date whose election, or
nomination for election by the Employer's shareowners, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or
removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Employer or the acquisition of assets of another
entity (a "Corporate Transaction"), in each case, unless,
following such Corporate Transaction, (A) all or substantially
all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Employer Common Stock
and Outstanding Employer Voting Securities immediately prior
to such Corporate Transaction beneficially own, directly or
indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Employer or all
or substantially all of the Employer's assets either directly
or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Corporate Transaction of the Outstanding Employer Common Stock
and Outstanding Employer Voting Securities, as the case may
be, (B) no Person (excluding Conexant or any employee benefit
plan (or related trust) of the Employer, of Conexant or of
such corporation resulting from such Corporate Transaction)
beneficially owns, directly or indirectly, 20% or more
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
of, respectively, the then outstanding shares of common stock
of the corporation resulting from such Corporate Transaction
or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Corporate Transaction and (C)
at least a majority of the members of the board of directors
of the corporation resulting from such Corporate Transaction
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Incumbent Board of Directors providing for such Corporate
Transaction; or
(d) Approval by the Employer's shareowners of a complete
liquidation or dissolution of the Employer.
1.14 "Claimant" shall have the meaning set forth in Section 14.1.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
from time to time.
1.16 "Committee" shall mean the committee described in Article 12.
1.17 "Company" shall mean Mindspeed Technologies, Inc., a Delaware corporation,
and any successor to all or substantially all of the Company's assets or
business.
1.18 "Company Contribution Account" shall mean (i) the sum of the Participant's
Annual Company Contribution Amounts, plus (ii) amounts credited (net of
amounts debited) in accordance with all of the applicable crediting
provisions of this Plan that relate to the Participant's Company
Contribution Account, less (iii) all distributions made to the Participant
or his or her Beneficiary pursuant to this Plan that relate to the
Participant's Company Contribution Account.
1.19 "Company Matching Account" shall mean (i) the sum of all of a
Participant's Annual Company Matching Amounts, plus (ii) amounts credited
(net of amounts debited) in accordance with all of the applicable
crediting provisions of this Plan that relate to the Participant's Company
Matching Account, less (iii) all distributions made to the Participant or
his or her Beneficiary pursuant to this Plan that relate to the
Participant's Company Matching Account.
1.20 "Deduction Limitation" shall mean the following described limitation on a
benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied
to all distributions that are "subject to the Deduction Limitation" under
this Plan. If an Employer determines in good faith prior to a Change in
Control that there is a reasonable likelihood that any compensation paid
to a Participant for a taxable year of the Employer would not be
deductible by the Employer solely by reason of the limitation under Code
Section 162(m), then to the extent deemed necessary by the Employer to
ensure that the entire amount of any distribution to the Participant
pursuant to this Plan prior to the Change in Control is deductible, the
Employer may defer all or any portion of a distribution under this Plan.
Any amounts deferred pursuant to this limitation shall continue to be
credited/debited with additional amounts in accordance with Section 3.13
below, even if such amount is being paid out in installments. The amounts
so deferred and amounts credited thereon shall be distributed to the
Participant or his or her Beneficiary (in the event of the Participant's
death) at the earliest possible date, as determined by the Employer in
good faith, on which the deductibility of
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Deferred Compensation Plan
Master Plan Document
compensation paid or payable to the Participant for the taxable year of
the Employer during which the distribution is made will not be limited by
Section 162(m), or if earlier, the effective date of a Change in Control.
Notwithstanding anything to the contrary in this Plan, the Deduction
Limitation shall not apply to any distributions made after a Change in
Control.
1.21 "Deferral Account" shall mean (i) the sum of all of a Participant's Annual
Deferral Amounts, plus (ii) amounts credited (net of amounts debited) in
accordance with all of the applicable crediting provisions of this Plan
that relate to the Participant's Deferral Account, less (iii) all
distributions made to the Participant or his or her Beneficiary pursuant
to this Plan that relate to his or her Deferral Account.
1.22 "Director" shall mean any member of the board of directors of any
Employer.
1.23 "Directors Fees" shall mean the annual fees paid by any Employer,
including retainer fees and meetings fees, as compensation for serving on
the board of directors.
1.24 "Disability" shall mean a period of disability during which a Participant
qualifies for permanent disability benefits under the Mindspeed
Technologies, Inc. Long-term Disability Plan, or, if a Participant does
not participate in such plan, a period of disability during which the
Participant would have qualified for permanent disability benefits under
such plan had the Participant been a participant in such plan, as
determined in the sole and absolute discretion of the Committee. If the
Participant's Employer does not sponsor such plan, or discontinues to
sponsor such plan, Disability shall be determined by the Committee in its
sole and absolute discretion.
1.25 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.26 "Election Form" shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee
to make an election under the Plan.
1.27 "Eligible Stock Option" shall mean one or more non-qualified stock
option(s) selected by the Committee in its sole and absolute discretion
and exercisable under a plan or arrangement of any Employer permitting a
Participant under this Plan to defer gain with respect to such option.
1.28 "Employee" shall mean a person who is an employee of any Employer.
1.29 "Employer(s)" shall mean the Company and/or any of its subsidiaries (now
in existence or hereafter formed or acquired) that have been selected by
the Board to participate in the Plan and have adopted the Plan as a
sponsor.
1.30 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.31 "Executive Committee" shall mean the Company's executive committee.
1.32 "First Plan Year" shall mean the period beginning June 27, 2003 and ending
December 31, 2003.
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Deferred Compensation Plan
Master Plan Document
1.33 "401(k) Plan" shall be that certain Mindspeed Technologies, Inc.
Retirement Savings Plan adopted by the Company.
1.34 "Participant" shall mean any Employee or Director (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan, (iii)
who signs a Plan Agreement, an Election Form and a Beneficiary Designation
Form, (iv) whose signed Plan Agreement, Election Form and Beneficiary
Designation Form are accepted by the Committee, (v) who commences
participation in the Plan, and (vi) whose Plan Agreement has not
terminated. A spouse or former spouse of a Participant shall not be
treated as a Participant in the Plan or have an account balance under the
Plan, even if he or she has an interest in the Participant's benefits
under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce.
1.35 "Plan" shall mean the Mindspeed Technologies, Inc. Deferred Compensation
Plan, effective June 27, 2003, which shall be evidenced by this instrument
and by each Plan Agreement, as they may be amended from time to time.
1.36 "Plan Agreement" shall mean a written agreement, as may be amended from
time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the
Participant's Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one Plan
Agreement, the Plan Agreement bearing the latest date of acceptance by the
Employer shall supersede all previous Plan Agreements in their entirety
and shall govern such entitlement. The terms of any Plan Agreement may be
different for any Participant, and any Plan Agreement may provide
additional benefits not set forth in the Plan or limit the benefits
otherwise provided under the Plan; provided, however, that any such
additional benefits or benefit limitations must be agreed to by both the
Employer and the Participant.
1.37 "Plan Year" shall, except for the First Plan Year, mean a period beginning
on January 1 of each calendar year and continuing through December 31 of
such calendar year.
1.38 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.39 "Qualifying Gain" shall mean the value accrued upon exercise of an
Eligible Stock Option (i) using a Stock-for-Stock payment method and (ii)
having an aggregate fair market value in excess of the total Stock
purchase price necessary to exercise the option. In other words, the
Qualifying Gain upon exercise of an Eligible Stock Option equals the total
market value of the shares (or share equivalent units) acquired minus the
total stock purchase price. For example, assume a Participant elects to
defer the Qualifying Gain accrued upon exercise of an Eligible Stock
Option to purchase 1000 shares of Stock at an exercise price of $20 per
share, when Stock has a current fair market value of $25 per share. Using
the Stock-for-Stock payment method, the Participant would deliver 800
shares of Stock (worth $20,000) to exercise the Eligible Stock Option and
receive, in return, 800 shares of Stock plus a Qualifying Gain (in this
case, in the form of an unfunded and unsecured promise to pay money or
property in the future) equal to $5,000 (i.e., the current value of the
remaining 200 shares of Stock).
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
1.40 "Restricted Stock" shall mean unvested shares of restricted stock selected
by the Committee in its sole and absolute discretion and awarded to the
Participant under any Company stock incentive plan.
1.41 "Restricted Stock Account" shall mean (i) the sum of the Participant's
Annual Restricted Stock Amounts, plus (ii) amounts credited/debited in
accordance with all the applicable crediting/debiting provisions of this
Plan that relate to the Participant's Restricted Stock Account, less (iii)
all distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to the Participant's Restricted Stock
Account.
1.42 "Restricted Stock Amount" shall mean, for any grant of Restricted Stock,
the amount of such Restricted Stock deferred in accordance with Section
3.8 of this Plan, calculated using the closing price of Stock as of the
end of the business day closest to the date such Restricted Stock would
otherwise vest, but for the election to defer.
1.43 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, death or Disability at such time as the sum
of the Employee's age and Years of Service equals at least fifty-five
(55); and shall mean with respect to a Director who is not an Employee,
severance of his or her directorships with all Employers on or after the
later of (y) the attainment of age seventy (70), or (z) in the sole and
absolute discretion of the Committee, an age later than age seventy (70).
If a Participant is both an Employee and a Director, Retirement shall not
occur until he or she Retires as both an Employee and a Director, which
Retirement shall be deemed to be a Retirement as a Director; provided,
however, that such a Participant may elect, at least one year prior to
Retirement and in accordance with the policies and procedures established
by the Committee, to Retire for purposes of this Plan at the time he or
she Retires as an Employee, which Retirement shall be deemed to be a
Retirement as an Employee.
1.44 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.45 "Rollover Account" shall mean (i) the sum of the Participant's Rollover
Amount, plus (ii) amounts credited/debited in accordance with all the
applicable crediting/debiting provisions of this Plan that relate to the
Participant's Rollover Account, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to
the Participant's Rollover Account.
1.46 "Rollover Amount" shall mean the amount determined in accordance with
Section 3.9.
1.47 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.48 "Stock" shall mean Mindspeed Technologies, Inc. common stock, $1.00 par
value, or any other equity securities of the Company designated by the
Committee.
1.49 "Stock Option Account" shall mean the sum of (i) the Participant's Annual
Stock Option Amounts, plus (ii) amounts credited/debited in accordance
with all the applicable crediting/debiting provisions of this Plan that
relate to the Participant's Stock Option Account,
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Master Plan Document
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's Stock
Option Account.
1.50 "Stock Option Amount" shall mean, for any Eligible Stock Option, the
amount of Qualifying Gains deferred in accordance with Section 3.7 of this
Plan, calculated using the closing price of Stock as of the end of the
business day closest to the date of exercise of such Eligible Stock
Option.
1.51 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.52 "Termination of Employment" shall mean the severing of employment with all
Employers, or service as a Director of all Employers, voluntarily or
involuntarily, for any reason other than Retirement, Disability, death or
an authorized leave of absence. If a Participant is both an Employee and a
Director, a Termination of Employment shall occur only upon the
termination of the last position held; provided, however, that such a
Participant may elect, at least three years before Termination of
Employment and in accordance with the policies and procedures established
by the Committee, to be treated for purposes of this Plan as having
experienced a Termination of Employment at the time he or she ceases
employment with an Employer as an Employee.
1.53 `Trust' shall mean the trust established pursuant to that certain Trust
Agreement, dated as of June 27, 2003, between the Company and the Trustee
named therein, as amended from time to time.
1.54 "Unforeseeable Financial Emergency" shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting
from (i) a sudden and unexpected illness or accident of the Participant or
a dependent of the Participant, (ii) a loss of the Participant's property
due to casualty, or (iii) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole and absolute discretion of the
Committee.
1.55 "Years of Service" shall mean the total number of full years in which a
Participant has been employed by one or more Employers. For purposes of
this definition, any time in which a Participant was employed by Rockwell
International Corporation, a Delaware corporation, and/or Conexant
Systems, Inc., a Delaware corporation, shall be counted. A year of
employment shall be a 365-day period (or 366-day period in the case of a
leap year) that, for the first year of employment, commences on the
Employee's date of hiring and that, for any subsequent year, commences on
an anniversary of that hiring date. Any partial year of employment shall
not be counted. Notwithstanding any provision of this Plan that may be
construed to the contrary, for purposes of this definition, the Committee
may, in its sole and absolute discretion, deem a Participant to be
credited with additional years of employment for purpose of calculating
his or her Years of Service.
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Master Plan Document
ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY
2.1 SELECTION BY COMMITTEE. Participation in the Plan shall be limited to a
select group of management and highly compensated Employees and Directors
of the Employers, as determined by the Committee in its sole and absolute
discretion. From that group, the Committee shall select, in its sole and
absolute discretion, Employees and Directors to participate in the Plan.
2.2 ENROLLMENT REQUIREMENTS. As a condition to participation, each selected
Employee or Director shall complete, execute and return to the Committee a
Plan Agreement, an Election Form and a Beneficiary Designation Form, all
within 30 days after he or she is selected to participate in the Plan. In
addition, the Committee shall establish from time to time such other
enrollment requirements as it determines in its sole and absolute
discretion are necessary.
2.3 ELIGIBILITY/COMMENCEMENT OF PARTICIPATION. Provided an Employee or
Director selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the
specified time period, that Employee or Director shall commence
participation in the Plan on the first day of the month following the
month in which the Employee or Director completes all enrollment
requirements. If an Employee or a Director fails to meet all such
requirements within the period required, in accordance with Section 2.2,
that Employee or Director shall not be eligible to participate in the Plan
until the first day of the Plan Year following the delivery to and
acceptance by the Committee of the required documents.
2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee determines
in good faith that a Participant no longer qualifies as a member of a
select group of management or highly compensated employees, as membership
in such group is determined in accordance with Sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA, the Committee shall have the right, in its sole
and absolute discretion, to (i) terminate any deferral election the
Participant has made for the remainder of the Plan Year in which the
Participant's membership status changes, (ii) prevent the Participant from
making future deferral elections and/or (iii) immediately distribute the
Participant's then Account Balance as a Termination Benefit and terminate
the Participant's participation in the Plan.
ARTICLE 3
DEFERRAL COMMITMENTS/COMPANY MATCHING/CREDITING/TAXES
3.1 MINIMUM DEFERRALS.
(a) BASE ANNUAL SALARY, ANNUAL BONUS AND DIRECTOR'S FEES. For each Plan
Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, Base Annual Salary, Annual Bonus and/or Director's
Fees in the following minimum amounts for each deferral elected:
DEFERRAL MINIMUM AMOUNT
- ------------------ --------------
Base Annual Salary $2,000
Annual Bonus $2,000
Directors Fees $2,000
If an election is made for less than stated minimum amounts, or if
no election is made, the amount deferred shall be zero.
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(b) SHORT PLAN YEAR. Notwithstanding the foregoing, if a Participant
first becomes a Participant after the first day of a Plan Year, or
in the case of the first Plan Year of the Plan itself, the minimum
Base Annual Salary deferral shall be an amount equal to the minimum
set forth above, multiplied by a fraction, the numerator of which is
the number of complete months remaining in the Plan Year and the
denominator of which is 12.
(c) STOCK OPTION AMOUNT. For each Eligible Stock Option, a Participant
may elect to defer, as his or her Stock Option Amount, the following
minimum percentage of Qualifying Gain with respect to exercise of
the Eligible Stock Option:
DEFERRAL MINIMUM PERCENTAGE
- --------------- ------------------
Qualifying Gain 25%
provided, however, that such Stock Option Amount shall be no less
than the lesser of $50,000 or 100% of such Qualifying Gain.
(d) RESTRICTED STOCK AMOUNT. For Restricted Stock, a Participant may
elect to defer, as his or her Restricted Stock Amount, the following
minimum percentage of the Participant's Restricted Stock:
DEFERRAL MINIMUM PERCENTAGE
- ---------------- ------------------
Restricted Stock 25%
provided, however, that the Annual Restricted Stock Amount shall be
no less than the lesser of $50,000 or 100% of the Participant's
Restricted Stock.
3.2 MAXIMUM DEFERRAL.
(a) BASE ANNUAL SALARY, ANNUAL BONUS AND DIRECTORS FEES. For each Plan
Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, Base Annual Salary, Annual Bonus and/or Directors
Fees up to the following maximum percentages for each deferral
elected:
DEFERRAL MAXIMUM PERCENTAGE
- ------------------- ------------------
Base Annual Salary 100%
Annual Bonus 100%
Directors Fees 100%
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(b) Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, or in the case of
the first Plan Year of the Plan itself, the maximum Annual Deferral
Amount, with respect to Base Annual Salary, Annual Bonus and
Directors Fees shall be limited to the amount of compensation not
yet earned by the Participant as of the date the Participant submits
a Plan Agreement and Election Form to the Committee for acceptance.
(c) For each Eligible Stock Option, a Participant may elect to defer, as
his or her Stock Option Amount, Qualifying Gain up to the following
maximum percentage with respect to exercise of the Eligible Stock
Option:
DEFERRAL MAXIMUM PERCENTAGE
- ----------------- ------------------
Qualifying Gain 100%
(d) Stock Option Amounts may also be limited by other terms or
conditions set forth in the stock option plan or agreement under
which such options are granted.
(e) A Participant may elect to defer up to 100% of his or her Restricted
Stock
3.3 ELECTION TO DEFER/EFFECT OF ELECTION FORM.
(a) FIRST PLAN YEAR. In connection with a Participant's commencement of
participation in the Plan, the Participant shall make an irrevocable
deferral election for the Plan Year in which the Participant
commences participation in the Plan, along with such other elections
as the Committee deems necessary or desirable under the Plan. For
these elections to be valid, the Election Form must be completed and
signed by the Participant, timely delivered to the Committee (in
accordance with Section 2.2 above) and accepted by the Committee. As
a condition to making such irrevocable deferral election for the
Plan Year, such Participant shall make an irrevocable election under
such Election Form to make the maximum "Basic Pre-Tax Contributions"
and "Supplemental Pre-Tax Contributions" (as such terms are defined
in the 401(k) Plan) permitted under the terms of the 401(k) Plan for
such Plan Year.
(b) SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an irrevocable
deferral election for that Plan Year, and such other elections as
the Committee deems necessary or
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desirable under the Plan, shall be made by timely delivering to the
Committee, in accordance with its rules and procedures, before the
end of the Plan Year preceding the Plan Year for which the election
is made, a new Election Form. If no such Election Form is timely
delivered for a Plan Year, the Annual Deferral Amount shall be zero
for that Plan Year. As a condition to making such irrevocable
deferral election for the Plan Year, such Participant shall make an
irrevocable election under such Election Form to make the maximum
"Basic Pre-Tax Contributions" and "Supplemental Pre-Tax
Contributions" (as such terms are defined in the 401(k) Plan)
permitted under the terms of the 401(k) Plan for such Plan Year.
(c) STOCK OPTION DEFERRAL. For an election to defer gain upon an
Eligible Stock Option exercise to be valid: (i) a separate
irrevocable Election Form must be completed and signed by the
Participant with respect to the Eligible Stock Option; (ii) the
Election Form must be timely delivered to the Committee and accepted
by the Committee at least six (6) months prior to the date the
Participant elects to exercise the Eligible Stock Option; (iii) the
Eligible Stock Option must be exercised using an actual or phantom
Stock-for-Stock payment method; and (iv) the Stock actually or
constructively delivered by the Participant to exercise the Eligible
Stock Option must have been owned by the Participant during the
entire six (6) month period prior to its delivery.
(d) RESTRICTED STOCK. For an election to defer Restricted Stock Amounts
to be valid: (i) a separate irrevocable Election Form must be
completed and signed by the Participant, with respect to such
Restricted Stock; and (ii) such Election Form must be timely
delivered to the Committee and accepted by the Committee at least
six (6) months prior to the date such Restricted Stock vests under
the terms of the Company's stock incentive plan.
3.4 WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the Base
Annual Salary portion of the Annual Deferral Amount shall be withheld from
each regularly scheduled Base Annual Salary payroll in equal amounts, as
adjusted from time to time for increases and decreases in Base Annual
Salary. The Annual Bonus and/or Directors Fees portion of the Annual
Deferral Amount shall be withheld at the time the Annual Bonus or
Directors Fees are or otherwise would be paid to the Participant, whether
or not this occurs during the Plan Year itself.
3.5 ANNUAL COMPANY CONTRIBUTION AMOUNT. For each Plan Year, an Employer, in
its sole and absolute discretion, may, but is not required to, credit any
amount it desires to any Participant's Company Contribution Account under
this Plan, which amount shall be for that Participant the Annual Company
Contribution Amount for that Plan Year. The amount so credited to a
Participant may be smaller or larger than the amount credited to any other
Participant, and the amount credited to any Participant for a Plan Year
may be zero, even though one or more other Participants receive an Annual
Company Contribution Amount for that Plan Year. The Annual Company
Contribution Amount, if any, shall be credited as of the date determined
by the Committee in its sole and absolute discretion. If a Participant is
not employed by an Employer as of the last day of a Plan Year for a reason
other than his or her Retirement or death while employed, the Annual
Company Contribution Amount for that Plan Year shall be zero.
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3.6 ANNUAL COMPANY MATCHING AMOUNT. A Participant's Annual Company Matching
Amount for any Plan Year shall be equal to the match the Participant would
have received under the 401(k) Plan during the corresponding plan year of
the 401(k) Plan, but for (i) his or her Participation in this Plan and
(ii) the limitations imposed under Code Sections 401(a)(17), 401(k)(3),
402(g) and 415, less the match actually credited to the Participant's
401(k) Plan account. If a Participant is not employed by an Employer, or
is no longer providing services as a Director, as of the last business day
of a Plan Year other than by reason of his or her Retirement or death, the
Annual Company Matching Amount for such Plan Year shall be zero. In the
event of Retirement or death, a Participant shall be credited with the
Annual Company Matching Amount for the Plan Year in which he or she
Retires or dies. A Participant's Annual Company Matching Amount for any
Plan Year shall be equal to: (a) the "Company Matching Contribution" (as
such term is defined in the 401(k) Plan) that would have been made on
behalf of such Participant under the 401(k) Plan during the corresponding
plan year of the 401(k) Plan assuming: (i) his or her "Basic Pre-Tax
Contributions" and "Supplemental Pre-Tax Contributions" (as such terms are
defined in the 401(k) Plan) included the Base Annual Salary portion of his
or her Annual Deferral Amount for the Plan Year, (ii) his or her "Base
Compensation" (as such term is defined in the 401(k) Plan) equaled his or
her Base Annual Salary for the Plan Year, and (iii) the limitations
imposed under Code Sections 401(a)(17), 401(k), 401(m), 402(g) and 415 did
not apply for purposes of determining his or her "Company Matching
Contributions" under the 401(k) Plan, less (b) the "Company Matching
Contributions" actually credited to such Participant's 401(k) Plan account
for such Plan Year. Such Participant's Annual Company Matching Amount for
any Plan Year shall be credited during such Plan Year as the Base Annual
Salary portion of the Annual Deferral Amount for such Participant is
withheld from each regularly scheduled Base Annual Salary payroll in
accordance with Section 3.4. As a condition to the crediting of the Annual
Company Matching Amount for such Participant for the Plan Year, such
Participant shall make an irrevocable election under such Participant's
Election Form for such Plan Year to make the maximum "Basic Pre-Tax
Contributions" and "Supplemental Pre-Tax Contributions" (as such terms are
defined in the 401(k) Plan) permitted under the terms of the 401(k) Plan
for such Plan Year.
3.7 STOCK OPTION AMOUNT. Subject to any terms and conditions imposed by the
Committee, Participants may elect to defer, under the Plan, Qualifying
Gains attributable to an Eligible Stock Option exercise. Stock Option
Amounts shall be credited/debited to the Participant on the books of the
Employer at the time Stock would otherwise have been delivered to the
Participant pursuant to the Eligible Stock Option exercise, but for the
election to defer.
3.8 RESTRICTED STOCK AMOUNT. Subject to any terms and conditions imposed by
the Committee, Participants may elect to defer, under the Plan, Restricted
Stock Amounts. Restricted Stock Amounts shall be credited/debited to the
Participant on the books of the Employer in connection with such an
election at the time the Restricted Stock would otherwise vest under the
terms of the Company's stock incentive plan, but for the election to
defer.
3.9 ROLLOVER AMOUNT. If an Employee has an account balance in the Conexant
Systems, Inc. Deferred Compensation Plan (the "Conexant DCP"), the Company
will specify a Transfer Date on which the Employee's Conexant DCP account
balance, as determined as of the Transfer Date,
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shall be transferred and added to the Participant's Account Balance under
this Plan, and shall thereafter be governed by the terms and conditions of
this Plan and shall be referred to as the "Rollover Amount." The Transfer
Date shall be the date specified by the Company for each affected
Employee. All elections made by a Participant with respect to his or her
account balance under the Conexant DCP shall apply to his or her Rollover
Amount under this Plan. The Rollover Amount shall be subject to the terms
and conditions of this Plan and any Participant with a Rollover Amount
shall have no right to demand distribution of such amounts other than as
provided for herein.
3.10 INVESTMENT OF TRUST ASSETS. The Trustee of the Trust shall be authorized,
upon written instructions received from the Committee or investment
manager appointed by the Committee, to invest and reinvest the assets of
the Trust in accordance with the applicable Trust Agreement, including the
disposition of Stock and reinvestment of the proceeds in one or more
investment vehicles designated by the Committee.
3.11 SOURCES OF STOCK. If Stock is credited under the Plan in the Trust in
connection with an Eligible Stock Option exercise or in connection with a
deferral of Restricted Stock, the shares so credited shall be deemed to
have originated, and shall be counted against the number of shares
reserved, under such other plan, program or arrangement.
3.12 VESTING.
(a) A Participant shall at all times be 100% vested in his or her
Deferral Account, Matching Account, Stock Option Account, Restricted
Stock Account and Rollover Account.
(b) A Participant shall be vested in his or her Company Contribution
Account in accordance with the vesting schedules established by the
Committee, in its sole and absolute discretion, for each Annual
Company Contribution Amount (and amounts credited or debited
thereon) at the time each such Annual Company Contribution Amount is
first credited to the Participant's Account Balance under the Plan.
(c) Notwithstanding anything to the contrary contained in this Section
3.12, in the event of a Change in Control, a Participant's Company
Contribution Account shall immediately become 100% vested (if it is
not already vested in accordance with the above vesting schedules).
(d) Notwithstanding subsection (c), the vesting schedule for a
Participant's Company Contribution Account shall not be accelerated
to the extent that the Committee determines that such acceleration
would cause the deduction limitations of Section 280G of the Code to
become effective. In the event that all of a Participant's Company
Contribution Account is not vested pursuant to such a determination,
the Participant may request independent verification of the
Committee's calculations with respect to the application of Section
280G. In such case, the Committee must provide to the Participant
within 15 business days of such a request an opinion from a
nationally recognized accounting firm selected by the Participant
(the "Accounting Firm"). The opinion shall state the Accounting
Firm's opinion that any limitation in the vested percentage
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hereunder is necessary to avoid the limits of Section 280G and
contain supporting calculations. The cost of such opinion shall be
paid for by the Company.
3.13 CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and subject
to, the rules and procedures that are established from time to time by the
Committee, in its sole and absolute discretion, amounts shall be credited
or debited to a Participant's Account Balance in accordance with the
following rules:
(a) ELECTION OF MEASUREMENT FUNDS. Subject to Section 3.13(f) below, a
Participant, in connection with his or her initial deferral election
in accordance with Section 3.3(a) above, shall elect, on the
Election Form, one or more Measurement Fund(s) (as described in
Section 3.13(c) below) to be used to determine the additional
amounts to be credited to his or her Account Balance for the first
business day in which the Participant commences participation in the
Plan and continuing thereafter for each subsequent day in which the
Participant participates in the Plan, unless changed in accordance
with the next sentence. Subject to Section 3.13(f) below, commencing
with the first business day that follows the Participant's
commencement of participation in the Plan and continuing thereafter
for each subsequent day in which the Participant participates in the
Plan, the Participant may (but is not required to) elect, by
submitting an Election Form to the Committee that is accepted by the
Committee, to add or delete one or more Measurement Fund(s) to be
used to determine the additional amounts to be credited to his or
her Account Balance, or to change the portion of his or her Account
Balance allocated to each previously or newly elected Measurement
Fund. If an election is made in accordance with the previous
sentence, it shall apply to the next business day and continue
thereafter for each subsequent day in which the Participant
participates in the Plan, unless changed in accordance with the
previous sentence. Notwithstanding any provision of this Plan that
may be construed to the contrary, no more than one such election may
be made in any calendar quarter by a Participant without the prior
written consent of the Committee.
(b) PROPORTIONATE ALLOCATION. In making any election described in
Section 3.13(a) above, the Participant shall specify on the Election
Form, in increments of five percentage points (5%), the percentage
of his or her Account Balance to be allocated to a Measurement Fund
(as if the Participant was making an investment in that Measurement
Fund with that portion of his or her Account Balance).
(c) MEASUREMENT FUNDS. From time to time, the Committee in its sole and
absolute discretion shall select and announce to Participants its
selection of mutual funds, insurance company separate accounts,
indexed rates or other methods (each, a "Measurement Fund"), for the
purpose of providing the basis on which gains and losses shall be
attributed to Account Balances under the Plan. The Committee may, in
its sole and absolute discretion, discontinue, substitute or add a
Measurement Fund at any time. Each such action will take effect as
of the first day of the calendar quarter that follows by thirty (30)
days the day on which the Committee gives Participants advance
written notice of such change. Subject to Section 3.13(f) below, the
Participant may elect one or
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Master Plan Document
more of the following Measurement Funds for purposes of
crediting/debiting additional amounts to his or her Account Balance:
(1) Fidelity Contrafund;
(2) Fidelity Growth;
(3) Fidelity High Income;
(4) Fidelity Money Market;
(5) PIMCO Short-Term Bond;
(6) T. Rowe Price Equity Income;
(7) T. Rowe Price International Stock;
(8) Janus Aspen Series Growth;
(9) Janus Aspen Series Capital Appreciation;
(10) Janus Aspen Series Worldwide;
(11) Janus Aspen Series High Yield;
(12) BT Small Cap Index;
(13) BT Equity 500 Index;
(14) BT EAFE Equity Index;
(15) INVESCO VIF Clue Chip Growth;
(16) INVESCO VIF Dynamics;
(17) INVESCO VIF Financial Services;
(18) INVESCO VIF Health Sciences;
(19) INVESCO VIF Technology;
(20) INVESCO VIF Telecommunications; and
(21) Company Stock Measurement Fund (described as a mutual fund
100% invested in shares of Stock, with any dividends deemed
reinvested in additional shares of Stock); provided, that such
Company Stock Measurement Fund shall be established and
maintained in such manner and at such times as the Committee
determines, in its sole and absolute discretion.
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(d) CREDITING OR DEBITING METHOD. The performance of each elected
Measurement Fund (either positive or negative) will be determined by
the Committee, in its reasonable discretion, based on the
performance of the Measurement Funds themselves. A Participant's
Account Balance shall be credited or debited on a daily basis based
on the performance of each Measurement Fund selected by the
Participant, as determined by the Committee in its sole and absolute
discretion, as though (i) a Participant's Account Balance were
invested in the Measurement Fund(s) selected by the Participant, in
the percentages applicable to such day, as of the close of business
on such day, at the closing price on such date; (ii) the portion of
the Annual Deferral Amount that was actually deferred during any day
were invested in the Measurement Fund(s) selected by the
Participant, in the percentages applicable to such day, no later
than the close of business on the first business day after the day
on which such amounts are actually deferred from the Participant's
Base Annual Salary through reductions in his or her payroll, at the
closing price on such date; and (iii) any distribution made to a
Participant that decreases such Participant's Account Balance ceased
being invested in the Measurement Fund(s), in the percentages
applicable to such day, no earlier than one business day prior to
the distribution, at the closing price on such date. The
Participant's Annual Company Matching Amount shall be credited to
his or her Company Matching Account for purposes of this Section
3.13(d) as of the close of business on the last business day of the
Plan Year to which it relates. The Participant's Annual Stock Option
Amount(s) shall be credited to his or her Stock Option Account no
later than the close of business on the first business day after the
day on which the Eligible Stock Option was exercised or otherwise
disposed of. The Participant's Annual Restricted Stock Amounts shall
be credited to his or her Restricted Stock Account no later than the
close of business on the first business day after the day on which
the Restricted Stock to which it relates would have vested, but for
the election to defer.
(e) NO ACTUAL INVESTMENT. Notwithstanding any other provision of this
Plan that may be interpreted to the contrary, the Measurement Funds
are to be used for measurement purposes only, and a Participant's
election of any such Measurement Fund, the allocation to his or her
Account Balance thereto, the calculation of additional amounts and
the crediting or debiting of such amounts to a Participant's Account
Balance shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the Trustee (as
that term is defined in the Trust), in its own discretion, decides
to invest funds in any or all of the Measurement Funds, no
Participant shall have any rights in or to such investments
themselves. Without limiting the foregoing, a Participant's Account
Balance shall at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the Company or
the Trust; the Participant shall at all times remain an unsecured
creditor of the Company.
(f) STOCK OPTION ACCOUNT AND RESTRICTED STOCK ACCOUNT MUST BE ALLOCATED
TO COMPANY STOCK MEASUREMENT FUND. Notwithstanding any provision of
this Plan that may be construed to the contrary, a Participant's
Stock Option Account and Restricted Stock Account must always be
allocated to the Company Stock Measurement Fund, may
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never be reallocated to any other Measurement Fund and must be
distributed from this Plan in the form of actual shares of Stock.
3.14 FICA AND OTHER TAXES.
(a) ANNUAL DEFERRAL AMOUNTS. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of the
Participant's Base Annual Salary and Bonus that is not being
deferred, in a manner determined by the Employer(s), the
Participant's share of FICA, other employment taxes and other
employee contributions on such Annual Deferral Amount. If necessary,
the Committee may reduce the Annual Deferral Amount in order to
comply with this Section 3.14.
(b) COMPANY MATCHING AMOUNTS. When a participant becomes vested in a
portion of his or her Company Matching Account, the Participant's
Employer(s) shall withhold from the Participant's Base Annual Salary
and/or Bonus that is not deferred, in a manner determined by the
Employer(s), the Participant's share of FICA and other employment
taxes. If necessary, the Committee may reduce the vested portion of
the Participant's Company Matching Account in order to comply with
this Section 3.14.
(c) ANNUAL STOCK OPTION AMOUNTS AND ANNUAL RESTRICTED STOCK AMOUNTS. For
each Plan Year in which an Annual Stock Option Amount or Annual
Restricted Stock Amount is being first withheld from a Participant,
the Participant's Employer(s) shall withhold from that portion of
the Participant's Base Annual Salary, Bonus, Qualifying Gains and
Restricted Stock that is not being deferred, in a manner determined
by the Employer(s), the Participant's share of FICA and other
employment taxes on such Annual Stock Option Amount or Annual
Restricted Stock Amount. If necessary, the Committee may reduce the
Annual Stock Option Amount or Annual Restricted Stock Amount in
order to comply with this Section 3.14.
3.15 DISTRIBUTIONS. The Participant's Employer(s), or the trustee of the Trust,
shall withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required to be
withheld by the Employer(s), or the trustee of the Trust, in connection
with such payments, in amounts and in a manner to be determined in the
sole and absolute discretion of the Employer(s) and the trustee of the
Trust.
ARTICLE 4
SHORT-TERM PAYOUT/UNFORESEEABLE FINANCIAL EMERGENCIES/WITHDRAWAL ELECTION
4.1 SHORT-TERM PAYOUT. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a future
"Short-Term Payout" from the Plan with respect to such Annual Deferral
Amount. Subject to the Deduction Limitation, the Short-Term Payout shall
be a lump sum payment in an amount that is equal to the Annual Deferral
plus amounts credited or debited in the manner provided in Section 3.13
above on that amount, determined at the time that the Short-Term Payout
becomes payable (rather than the date of a
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Termination of Employment). Subject to the Deduction Limitation and the
other terms and conditions of this Plan, each Short-Term Payout elected
shall be paid out during a 60 day period commencing immediately after the
last day of any Plan Year designated by the Participant that is at least
three Plan Years after the Plan Year in which the Annual Deferral Amount
is actually deferred. By way of example, if a three year Short-Term Payout
is elected for Annual Deferral Amounts that are deferred in the Plan Year
commencing January 1, 2001, the three year Short-Term Payout would become
payable during a 60 day period commencing January 1, 2005.
4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM. Should an event occur that
triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral Amount,
plus amounts credited or debited thereon, that is subject to a Short-Term
Payout election under Section 4.1 shall not be paid in accordance with
Section 4.1 but shall be paid in accordance with the other applicable
Article.
4.3 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES. If
the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee to (i) suspend any deferrals
required to be made by a Participant and/or (ii) receive a partial or full
payout from the Plan. The payout shall not exceed the lesser of the
Participant's Account Balance, calculated as if such Participant were
receiving a Termination Benefit, or the amount reasonably needed to
satisfy the Unforeseeable Financial Emergency. If, subject to the sole and
absolute discretion of the Committee, the petition for a suspension and/or
payout is approved, suspension shall take effect upon the date of approval
and any payout shall be made within 60 days of the date of approval. The
payment of any amount under this Section 4.3 shall not be subject to the
Deduction Limitation.
4.4 WITHDRAWAL ELECTION. A Participant (or, after a Participant's death, his
or her Beneficiary) may elect, at any time, to withdraw all of his or her
Account Balance, calculated as if there had occurred a Termination of
Employment as of the day of the election, less a withdrawal penalty equal
to 10% of such amount (the net amount shall be referred to as the
"Withdrawal Amount"). This election can be made at any time, before or
after Retirement, Disability, death or Termination of Employment, and
whether or not the Participant (or Beneficiary) is in the process of being
paid pursuant to an installment payment schedule. If made before
Retirement, Disability or death, a Participant's Withdrawal Amount shall
be his or her Account Balance calculated as if there had occurred a
Termination of Employment as of the day of the election. No partial
withdrawals of the Withdrawal Amount shall be allowed. The Participant (or
his or her Beneficiary) shall make this election by giving the Committee
advance written notice of the election in a form determined from time to
time by the Committee. The Participant (or his or her Beneficiary) shall
be paid the Withdrawal Amount within 60 days of his or her election. Once
the Withdrawal Amount is paid, the Participant's participation in the Plan
shall terminate and the Participant shall not be eligible to participate
in the Plan for the remainder of the Plan Year of such payment and the
next Plan Year. The payment of this Withdrawal Amount shall not be subject
to the Deduction Limitation.
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Master Plan Document
ARTICLE 5
RETIREMENT BENEFIT
5.1 RETIREMENT BENEFIT. Subject to the Deduction Limitation, a Participant who
Retires shall receive, as a Retirement Benefit, his or her Account
Balance.
5.2 PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his or
her commencement of participation in the Plan, shall elect on an Election
Form to receive the Retirement Benefit in a lump sum or pursuant to an
Annual Installment Method of 2, 5, 10, 15 or 20 years. The Participant may
annually change his or her election to an allowable alternative payout
period by submitting a new Election Form to the Committee, provided that
any such Election Form is submitted at least 1 year prior to the
Participant's Retirement and is accepted by the Committee in its sole and
absolute discretion. The Election Form most recently accepted by the
Committee shall govern the payout of the Retirement Benefit. If a
Participant does not make any election with respect to the payment of the
Retirement Benefit, then such benefit shall be payable in a lump sum. The
lump sum payment shall be made, or installment payments shall commence, no
later than 60 days after the last day of the Plan Year which the
Participant Retires. Any payment made shall be subject to the Deduction
Limitation.
5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and shall
be paid to the Participant's Beneficiary (a) over the remaining number of
years and in the same amounts as that benefit would have been paid to the
Participant had the Participant survived, or (b) in a lump sum, if
requested by the Beneficiary and allowed in the sole and absolute
discretion of the Committee, that is equal to the Participant's unpaid
remaining Account Balance.
ARTICLE 6
PRE-RETIREMENT SURVIVOR BENEFIT
6.1 PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction Limitation, the
Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit
equal to the Participant's Account Balance if the Participant dies before
he or she Retires, experiences a Termination of Employment or suffers a
Disability.
6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant, in connection
with his or her commencement of participation in the Plan, shall elect on
an Election Form whether the Pre-Retirement Survivor Benefit shall be
received by his or her Beneficiary in a lump sum or pursuant to an Annual
Installment Method of 2, 5, 10, 15 or 20 years. The Participant may
annually change this election to an allowable alternative payout period by
submitting a new Election Form to the Committee, which form must be
accepted by the Committee in its sole and absolute discretion. The
Election Form most recently accepted by the Committee prior to the
Participant's death shall govern the payout of the Participant's
Pre-Retirement Survivor Benefit. If a Participant does not make any
election with respect to the payment of the Pre-Retirement Survivor
Benefit, then such benefit shall be paid in a lump sum. Despite the
foregoing, if the
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Master Plan Document
Participant's Account Balance at the time of his or her death is less than
$25,000, payment of the Pre-Retirement Survivor Benefit may be made, in
the sole and absolute discretion of the Committee, in a lump sum or
pursuant to an Annual Installment Method of not more than 5 years. The
lump sum payment shall be made, or installment payments shall commence, no
later than 60 days after the last day of the Plan Year in which the
Committee is provided with proof that is satisfactory to the Committee of
the Participant's death. Any payment made shall be subject to the
Deduction Limitation.
ARTICLE 7
TERMINATION BENEFIT
7.1 TERMINATION BENEFIT. Subject to the Deduction Limitation, the Participant
shall receive a Termination Benefit, which shall be equal to the
Participant's Account Balance if a Participant experiences a Termination
of Employment prior to his or her Retirement, death or Disability.
7.2 PAYMENT OF TERMINATION BENEFIT. If the Participant's Account Balance at
the time of his or her Termination of Employment is less than $25,000,
payment of his or her Termination Benefit shall be paid in a lump sum. If
his or her Account Balance at such time is equal to or greater than that
amount, the Committee, in its sole and absolute discretion, may cause the
Termination Benefit to be paid in a lump sum or pursuant to an Annual
Installment Method of 5 years. The lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the last
day of the Plan Year in which the Participant experiences the Termination
of Employment. Any payment made shall be subject to the Deduction
Limitation.
ARTICLE 8
DISABILITY WAIVER AND BENEFIT
8.1 DISABILITY WAIVER.
(a) WAIVER OF DEFERRAL. A Participant who is determined by the Committee
to be suffering from a Disability shall be (i) excused from
fulfilling that portion of the Annual Deferral Amount commitment
that would otherwise have been withheld from a Participant's Base
Annual Salary, Annual Bonus and/or Directors Fees for the Plan Year
during which the Participant first suffers a Disability and (ii)
excused from fulfilling any existing unvested Restricted Stock
Amount or unexercised Stock Option Amount commitments. During the
period of Disability, the Participant shall not be allowed to make
any additional deferral elections, but will continue to be
considered a Participant for all other purposes of this Plan.
(b) RETURN TO WORK. If a Participant returns to employment, or service
as a Director, with an Employer, after a Disability ceases, the
Participant may elect to defer an Annual Deferral Amount, Stock
Option Amount and Restricted Stock Amount for the Plan Year
following his or her return to employment or service and for every
Plan Year thereafter while a Participant in the Plan; provided such
deferral elections are otherwise allowed
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Master Plan Document
and an Election Form is delivered to and accepted by the Committee
for each such election in accordance with Section 3.3 above.
8.2 CONTINUED ELIGIBILITY/DISABILITY BENEFIT. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed, or in the service of an Employer as a
Director, and shall be eligible for the benefits provided for in
Article 4, 5, 6 or 7 in accordance with the provisions of those
Articles. Notwithstanding the above, the Committee shall have the right
to, in its sole and absolute discretion and for purposes of this Plan
only, and must in the case of a Participant who is otherwise eligible
to Retire, deem the Participant to have experienced a Termination of
Employment, or in the case of a Participant who is eligible to Retire,
to have Retired, at any time (or in the case of a Participant who is
eligible to Retire, as soon as practicable) after such Participant is
determined to be suffering a Disability, in which case the Participant
shall receive a Disability Benefit equal to his or her Account Balance
at the time of the Committee's determination; provided, however, that
should the Participant otherwise have been eligible to Retire, he or
she shall be paid in accordance with Article 5. The Disability Benefit
shall be paid in a lump sum within 60 days of the Committee's exercise
of such right. Any payment made shall be subject to the Deduction
Limitation.
ARTICLE 9
BENEFICIARY DESIGNATION
9.1 BENEFICIARY. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent)
to receive any benefits payable under the Plan to a beneficiary upon the
death of a Participant. The Beneficiary designated under this Plan may be
the same as or different from the Beneficiary designation under any other
plan of an Employer in which the Participant participates.
9.2 BENEFICIARY DESIGNATION/CHANGE/SPOUSAL CONSENT. A Participant shall
designate his or her Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated
agent. A Participant shall have the right to change a Beneficiary by
completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Committee's rules and procedures, as
in effect from time to time. If the Participant names someone other than
his or her spouse as a Beneficiary, a spousal consent, in the form
designated by the Committee, must be signed by that Participant's spouse
and returned to the Committee. Upon the acceptance by the Committee of a
new Beneficiary Designation Form, all Beneficiary designations previously
filed shall be canceled. The Committee shall be entitled to rely on the
last Beneficiary Designation Form filed by the Participant and accepted by
the Committee prior to his or her death.
9.3 ACKNOWLEDGMENT. No designation or change in designation of a Beneficiary
shall be effective until received and acknowledged in writing by the
Committee or its designated agent.
9.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated
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Deferred Compensation Plan
Master Plan Document
Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, then the Participant's
designated Beneficiary shall be deemed to be his or her surviving spouse.
If the Participant has no surviving spouse, the benefits remaining under
the Plan to be paid to a Beneficiary shall be payable to the executor or
personal representative of the Participant's estate.
9.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Plan, the Committee shall
have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.
9.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant's Plan Agreement shall terminate upon
such full payment of benefits.
ARTICLE 10
LEAVE OF ABSENCE
10.1 PAID LEAVE OF ABSENCE. If a Participant is authorized by the Participant's
Employer for any reason to take a paid leave of absence from the
employment of the Employer, the Participant shall continue to be
considered employed by the Employer and the Annual Deferral Amount shall
continue to be withheld during such paid leave of absence in accordance
with Section 3.3.
10.2 UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence
from the employment of the Employer, the Participant shall continue to be
considered employed by the Employer and the Participant shall be excused
from making deferrals until the earlier of the date the leave of absence
expires or the Participant returns to a paid employment status. Upon such
expiration or return, deferrals shall resume for the remaining portion of
the Plan Year in which the expiration or return occurs, based on the
deferral election, if any, made for that Plan Year. If no election was
made for that Plan Year, no deferral shall be withheld.
ARTICLE 11
TERMINATION, AMENDMENT OR MODIFICATION
11.1 TERMINATION. Although each Employer anticipates that it will continue the
Plan for an indefinite period of time, there is no guarantee that any
Employer will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, each Employer reserves the right to
discontinue its sponsorship of the Plan and/or to terminate the Plan at
any time with respect to any or all of its participating Employees and
Directors, by action of its board of directors. Upon the termination of
the Plan with respect to any Employer, the Plan Agreements of the affected
Participants who are employed by that Employer, or in the service of that
Employer as Directors, shall terminate and their Account Balances,
determined as if they had experienced a Termination of Employment on the
date of Plan termination or, if Plan termination occurs after the date
upon which a Participant was eligible to Retire, then with respect to that
Participant as if he or she had Retired on the date of Plan termination,
shall be paid to the Participants as follows: Prior to a
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Master Plan Document
Change in Control, if the Plan is terminated with respect to all of its
Participants, an Employer shall have the right, in its sole and absolute
discretion, and notwithstanding any elections made by the Participant, to
pay such benefits in a lump sum or pursuant to an Annual Installment
Method of up to 15 years, with amounts credited and debited during the
installment period as provided herein. If the Plan is terminated with
respect to less than all of its Participants, an Employer shall be
required to pay such benefits in a lump sum. After a Change in Control,
the Employer shall be required to pay such benefits in a lump sum. The
termination of the Plan shall not adversely affect any Participant or
Beneficiary who has become entitled to the payment of any benefits under
the Plan as of the date of termination; provided however, that the
Employer shall have the right to accelerate installment payments without a
premium or prepayment penalty by paying the Account Balance in a lump sum
or pursuant to an Annual Installment Method using fewer years (provided
that the present value of all payments that will have been received by a
Participant at any given point of time under the different payment
schedule shall equal or exceed the present value of all payments that
would have been received at that point in time under the original payment
schedule).
11.2 AMENDMENT. Any Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of its board
of directors; provided, however, that: (i) no amendment or modification
shall be effective to decrease or restrict the value of a Participant's
Account Balance in existence at the time the amendment or modification is
made, calculated as if the Participant had experienced a Termination of
Employment as of the effective date of the amendment or modification or,
if the amendment or modification occurs after the date upon which the
Participant was eligible to Retire, the Participant had Retired as of the
effective date of the amendment or modification, (ii) no amendment or
modification shall be effective upon or after a Change in Control without
the prior written consent of a majority of the Participants, and (iii) no
amendment or modification of this Section 11.2 or Section 12.2 of the Plan
shall be effective. The amendment or modification of the Plan shall not
affect any Participant or Beneficiary who has become entitled to the
payment of benefits under the Plan as of the date of the amendment or
modification; provided, however, that the Employer shall have the right to
accelerate installment payments by paying the Account Balance in a lump
sum or pursuant to an Annual Installment Method using fewer years
(provided that the present value of all payments that will have been
received by a Participant at any given point of time under the different
payment schedule shall equal or exceed the present value of all payments
that would have been received at that point in time under the original
payment schedule).
11.3 PLAN AGREEMENT. Despite the provisions of Sections 11.1 and 11.2 above, if
a Participant's Plan Agreement contains benefits or limitations that are
not in this Plan document, the Employer may only amend or terminate such
provisions with the consent of the Participant.
11.4 EFFECT OF PAYMENT. The full payment of the applicable benefit under
Article 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries under
this Plan and the Participant's Plan Agreement shall terminate.
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
ARTICLE 12
ADMINISTRATION
12.1 COMMITTEE DUTIES. Except as otherwise provided in this Article 12, this
Plan shall be administered by a Committee which shall consist of the
Board, or such committee as the Board shall appoint. Members of the
Committee may be Participants under this Plan. The Committee shall also
have the discretion and authority to (i) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of
this Plan and (ii) decide or resolve any and all questions including
interpretations of this Plan, as may arise in connection with the Plan.
Any individual serving on the Committee who is a Participant shall not
vote or act on any matter relating solely to himself or herself. When
making a determination or calculation, the Committee shall be entitled to
rely on information furnished by a Participant or the Company.
12.2 ADMINISTRATION UPON CHANGE IN CONTROL. For purposes of this Plan, the
Company shall be the "Administrator" at all times prior to the occurrence
of a Change in Control. Upon and after the occurrence of a Change in
Control, the "Administrator" shall be an independent third party selected
by the Trustee and approved by the individual who, immediately prior to
such event, was the Company's Chief Executive Officer or, if not so
identified, the Company's highest ranking officer (the "Ex-CEO"). The
Administrator shall have the discretionary power to determine all
questions arising in connection with the administration of the Plan and
the interpretation of the Plan and Trust including, but not limited to
benefit entitlement determinations; provided, however, upon and after the
occurrence of a Change in Control, the Administrator shall have no power
to direct the investment of Plan or Trust assets or select any investment
manager or custodial firm for the Plan or Trust. Upon and after the
occurrence of a Change in Control, the Company must: (1) pay all
reasonable administrative expenses and fees of the Administrator; (2)
indemnify the Administrator against any costs, expenses and liabilities
including, without limitation, attorney's fees and expenses arising in
connection with the performance of the Administrator hereunder, except
with respect to matters resulting from the gross negligence or willful
misconduct of the Administrator or its employees or agents; and (3) supply
full and timely information to the Administrator or all matters relating
to the Plan, the Trust, the Participants and their Beneficiaries, the
Account Balances of the Participants, the date of circumstances of the
Retirement, Disability, death or Termination of Employment of the
Participants, and such other pertinent information as the Administrator
may reasonably require. Upon and after a Change in Control, the
Administrator may be terminated (and a replacement appointed) by the
Trustee only with the approval of the Ex-CEO. Upon and after a Change in
Control, the Administrator may not be terminated by the Company.
12.3 AGENTS. In the administration of this Plan, the Committee may, from time
to time, employ agents and delegate to them such administrative duties as
it sees fit (including acting through a duly appointed representative) and
may from time to time consult with counsel who may be counsel to any
Employer.
12.4 BINDING EFFECT OF DECISIONS. The decision or action of the Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of
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Master Plan Document
the Plan and the rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons having any interest in
the Plan.
12.5 INDEMNITY OF COMMITTEE. All Employers shall indemnify and hold harmless
the members of the Committee, and any Employee to whom the duties of the
Committee may be delegated, and the Administrator against any and all
claims, losses, damages, expenses or liabilities arising from any action
or failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, any of its members, any such Employee or the
Administrator.
12.6 EMPLOYER INFORMATION. To enable the Committee and/or Administrator to
perform its functions, the Company and each Employer shall supply full and
timely information to the Committee and/or Administrator, as the case may
be, on all matters relating to the compensation of its Participants, the
date and circumstances of the Retirement, Disability, death or Termination
of Employment of its Participants, and such other pertinent information as
the Committee or Administrator may reasonably require.
ARTICLE 13
OTHER BENEFITS AND AGREEMENTS
13.1 COORDINATION WITH OTHER BENEFITS. The benefits provided for a Participant
and Participant's Beneficiary under the Plan are in addition to any other
benefits available to such Participant under any other plan or program for
employees of the Participant's Employer. The Plan shall supplement and
shall not supersede, modify or amend any other such plan or program except
as may otherwise be expressly provided.
ARTICLE 14
CLAIMS PROCEDURES
14.1 PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within 60 days after such
notice was received by the Claimant. All other claims must be made within
180 days of the date on which the event that caused the claim to arise
occurred. The claim must state with particularity the determination
desired by the Claimant.
14.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's claim
within a reasonable time, and shall notify the Claimant in writing:
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
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MINDSPEED TECHNOLOGIES, INC.
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Master Plan Document
(b) that the Committee has reached a conclusion contrary, in whole or in
part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the
Claimant:
(i) the specific reason(s) for the denial of the claim, or any
part of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary;
and
(iv) an explanation of the claim review procedure set forth in
Section 14.3 below.
14.3 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from the
Committee that a claim has been denied, in whole or in part, a Claimant
(or the Claimant's duly authorized representative) may file with the
Committee a written request for a review of the denial of the claim.
Thereafter, but not later than 30 days after the review procedure began,
the Claimant (or the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole and absolute
discretion, may grant.
14.4 DECISION ON REVIEW. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written request
for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's
decision must be rendered within 120 days after such date. Such decision
must be written in a manner calculated to be understood by the Claimant,
and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
this Article 14 is a mandatory prerequisite to a Claimant's right to
commence any legal action with respect to any claim for benefits under
this Plan.
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
ARTICLE 15
TRUST
15.1 ESTABLISHMENT OF THE TRUST. The Company shall establish the Trust, and
each Employer shall at least annually transfer over to the Trust such
assets as the Employer determines, in its sole and absolute discretion,
are necessary to provide, on a present value basis, for its respective
future liabilities created with respect to the Annual Deferral Amounts,
Annual Company Contribution Amounts, Company Matching Amounts, Annual
Stock Option Amounts and Annual Restricted Stock Amounts for such
Employer's Participants for all periods prior to the transfer, as well as
any debits and credits to the Participants' Account Balances for all
periods prior to the transfer, taking into consideration the value of the
assets in the trust at the time of the transfer.
15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the Plan
and the Plan Agreement shall govern the rights of a Participant to receive
distributions pursuant to the Plan. The provisions of the Trust shall
govern the rights of the Employers, Participants and the creditors of the
Employers to the assets transferred to the Trust. Each Employer shall at
all times remain liable to carry out its obligations under the Plan.
15.3 DISTRIBUTIONS FROM THE TRUST. Each Employer's obligations under the Plan
may be satisfied with Trust assets distributed pursuant to the terms of
the Trust, and any such distribution shall reduce the Employer's
obligations under this Plan.
15.4 STOCK TRANSFERRED TO THE TRUST. Notwithstanding any other provision of
this Plan or the Trust, if Trust assets are distributed to a Participant
in a distribution which reduces the Participant's Stock Option Account
balance and/or Restricted Stock Account balance under this Plan, such
distribution must be made in the form of Stock.
ARTICLE 16
MISCELLANEOUS
16.1 STATUS OF PLAN. The Plan is intended to be a plan that is not qualified
within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employee" within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted to the extent
possible in a manner consistent with that intent.
16.2 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the
payment of benefits under this Plan, any and all of an Employer's assets
shall be, and remain, the general, unpledged unrestricted assets of the
Employer. An Employer's obligation under the Plan shall be merely that of
an unfunded and unsecured promise to pay money in the future.
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16.3 EMPLOYER'S LIABILITY. An Employer's liability for the payment of benefits
shall be defined only by the Plan and the Plan Agreement, as entered into
between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in
the Plan and his or her Plan Agreement.
16.4 NONASSIGNABILITY. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or any
part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable
shall, prior to actual payment, be subject to seizure, attachment,
garnishment or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person,
be transferable by operation of law in the event of a Participant's or any
other person's bankruptcy or insolvency or be transferable to a spouse as
a result of a property settlement or otherwise.
16.5 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between any Employer
and the Participant. Such employment is hereby acknowledged to be an "at
will" employment relationship that can be terminated at any time for any
reason, or no reason, with or without cause, and with or without notice,
unless expressly provided in a written employment agreement. Nothing in
this Plan shall be deemed to give a Participant the right to be retained
in the service of any Employer, either as an Employee or a Director, or to
interfere with the right of any Employer to discipline or discharge the
Participant at any time.
16.6 FURNISHING INFORMATION. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested
in order to facilitate the administration of the Plan and the payments of
benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
16.7 TERMS. Whenever any words are used herein in the masculine, they shall be
construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or
in the plural, they shall be construed as though they were used in the
plural or the singular, as the case may be, in all cases where they would
so apply.
16.8 CAPTIONS. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
16.9 GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State of
California without regard to its conflicts of laws principles.
16.10 NOTICE. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
Senior Vice President and Chief Administrative Officer
Mindspeed Technologies, Inc.
4311 Jamboree Road
Newport Beach, California 92660
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.
16.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns and
the Participant and the Participant's designated Beneficiaries.
16.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass
to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse's will, nor shall such
interest pass under the laws of intestate succession.
16.13 VALIDITY. In case any provision of this Plan shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as
if such illegal or invalid provision had never been inserted herein.
16.14 INCOMPETENT. If the Committee determines in its discretion that a benefit
under this Plan is to be paid to a minor, a person declared incompetent or
to a person incapable of handling the disposition of that person's
property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of
such minor, incompetent or incapable person. The Committee may require
proof of minority, incompetence, incapacity or guardianship, as it may
deem appropriate prior to distribution of the benefit. Any payment of a
benefit shall be a payment for the account of the Participant and the
Participant's Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment amount.
16.15 COURT ORDER. The Committee is authorized to make any payments directed by
court order in any action in which the Plan or the Committee has been
named as a party. In addition, if a court determines that a spouse or
former spouse of a Participant has an interest in the Participant's
benefits under the Plan in connection with a property settlement or
otherwise, the Committee, in its sole and absolute discretion, shall have
the right, notwithstanding any election made by a Participant, to
immediately distribute the spouse's or former spouse's interest in the
Participant's benefits under the Plan to that spouse or former spouse.
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
16.16 DISTRIBUTION IN THE EVENT OF TAXATION.
(a) IN GENERAL. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the Trust
after a Change in Control, for a distribution of that portion of his
or her benefit that has become taxable. Upon the grant of such a
petition, which grant shall not be unreasonably withheld (and, after
a Change in Control, shall be granted), a Participant's Employer
shall distribute to the Participant immediately available funds in
an amount equal to the taxable portion of his or her benefit (which
amount shall not exceed a Participant's unpaid Account Balance under
the Plan). If the petition is granted, the tax liability
distribution shall be made within 90 days of the date when the
Participant's petition is granted. Such a distribution shall affect
and reduce the benefits to be paid under this Plan.
(b) TRUST. If the Trust terminates in accordance with its terms and
benefits are distributed from the Trust to a Participant in
accordance with that Section, the Participant's benefits under this
Plan shall be reduced to the extent of such distributions.
16.17 INSURANCE. The Employers, on their own behalf or on behalf of the trustee
of the Trust, and, in their sole and absolute discretion, may apply for
and procure insurance on the life of the Participant, in such amounts and
in such forms as the Trust may choose. The Employers or the trustee of the
Trust, as the case may be, shall be the sole owner and beneficiary of any
such insurance. The Participant shall have no interest whatsoever in any
such policy or policies, and at the request of the Employers shall submit
to medical examinations and supply such information and execute such
documents as may be required by the insurance company or companies to whom
the Employers have applied for insurance.
16.18 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company and each
Employer is aware that upon the occurrence of a Change in Control, the
Board or the board of directors of a Participant's Employer (which might
then be composed of new members) or a shareholder of the Company or the
Participant's Employer, or of any successor corporation might then cause
or attempt to cause the Company, the Participant's Employer or such
successor to refuse to comply with its obligations under the Plan and
might cause or attempt to cause the Company or the Participant's Employer
to institute, or may institute, litigation seeking to deny Participants
the benefits intended under the Plan. In these circumstances, the purpose
of the Plan could be frustrated. Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company, the
Participant's Employer or any successor corporation has failed to comply
with any of its obligations under the Plan or any agreement thereunder or,
if the Company, such Employer or any other person takes any action to
declare the Plan void or unenforceable or institutes any litigation or
other legal action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the Company and the
Participant's Employer irrevocably authorize such Participant to retain
counsel of his or her choice at the expense of the Company and the
Participant's Employer (who shall be jointly and severally liable) to
represent such Participant in connection with the initiation or defense of
any litigation or other legal action, whether by or against the Company,
the Participant's Employer or any
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MINDSPEED TECHNOLOGIES, INC.
Deferred Compensation Plan
Master Plan Document
director, officer, shareholder or other person affiliated with the
Company, the Participant's Employer or any successor thereto in any
jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document as of
June 27, 2003.
"Company"
Mindspeed Technologies, Inc., a Delaware
corporation
By: /s/ Bradley W. Yates
-------------------------------------
Name: Bradley W. Yates
Title: Senior Vice President and
Chief Administrative Officer
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