MINDSPEED TECHNOLOGIES, INC. DIRECTORS STOCK PLAN STOCK OPTION AGREEMENT STOCK OPTION TERMS AND CONDITIONS

 

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                                                                    EXHIBIT 10.8

 

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                          MINDSPEED TECHNOLOGIES, INC.

                              DIRECTORS STOCK PLAN

                             STOCK OPTION AGREEMENT

                        STOCK OPTION TERMS AND CONDITIONS

 

1.    Definitions

 

      Capitalized terms used and not defined herein shall have the respective

      meanings assigned to such terms in the Plan. As used in these Stock Option

      Terms and Conditions, the following words and phrases shall have the

      respective meanings ascribed to them below unless the context in which any

      of them is used clearly indicates a contrary meaning:

 

      (a)   FAST: Fidelity's automated service telephone system that is used to

            facilitate stock option transactions.

 

      (b)   FIDELITY: Fidelity Stock Plan Services, the stock option

            administrator whom Mindspeed has engaged to administer and process

            all stock option exercises.

 

      (c)   GRANT DATE: The date of the grant of the Options.

 

      (d)   GRANT LETTER: The letter from Mindspeed granting the stock option or

            stock options to you.

 

      (e)   MINDSPEED: Mindspeed Technologies, Inc., a Delaware corporation.

 

      (f)   NASDAQ: The Nasdaq National Market.

 

      (g)   OPTIONS: The stock option or stock options listed in the first

            paragraph of the Grant Letter and which together with these Stock

            Option Terms and Conditions constitutes the Stock Option Agreement.

 

      (h)   OPTION SHARES: The shares of Mindspeed Common Stock issuable or

            transferable on exercise of the Options.

 

      (i)   PLAN: Mindspeed's 2003 Directors Stock Plan, as such Plan may be

            amended and in effect at the relevant time.

 

      (j)   SHARES: Shares of Mindspeed Common Stock.

 

      (k)   STOCK OPTION AGREEMENT: These Stock Option Terms and Conditions

            together with the Grant Letter to which they are attached.

 

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      (l)   WEB: Fidelity's website that is used to facilitate stock option

            transactions.

 

2.    When Options May be Exercised

 

      The Options may be exercised, in whole or in part (but only for a whole

      number of shares) and at one time or from time to time, as follows:

 

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                                       Beginning                  Ending

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<S>                             <C>                        <C>

25% of the Option Shares        1 Year from Grant Date     10 Years from Grant Date

25% of the Option Shares        2 Years from Grant Date    10 Years from Grant Date

25% of the Option Shares        3 Years from Grant Date    10 Years from Grant Date

25% of the Option Shares        4 Years from Grant Date    10 Years from Grant Date

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      All vesting increments are rounded to the nearest whole number of Option

      Shares and vest only during the period indicated above, provided that:

 

      (a)   if you die while a Director of Mindspeed, your estate, or any person

            who acquires the Options by bequest or inheritance, may exercise all

            the Options not theretofore exercised within (and only within) the

            period beginning on your date of death (even if you die before you

            have become entitled to exercise all or any part of the Options) and

            ending three (3) years thereafter or ten (10) years after the Grant

            Date, if earlier;

 

      (b)   if you retire as a Director at or after age fifty five (55) and

            completing at least five (5) years of service as a Director, you (or

            if you die after your retirement date, your estate or any person who

            acquires the Options by bequest or inheritance) may thereafter

            exercise the Options not theretofore exercised within (and only

            within) the period beginning on your retirement date (even if you

            retire before you have become entitled to exercise all or any part

            of the Options) and ending five (5) years thereafter or on ten (10)

            years after the Grant Date, if earlier;

 

      (c)   if your service as a Director terminates as a result of your

            disability or as a result of your resignation for reasons of the

            antitrust laws, compliance with Mindspeed's conflict of interest

            policies or other circumstances that the Committee may determine as

            serving the best interests of Mindspeed, you (or if you die after

            termination of your service as a Director, your estate or any person

            who acquires the Options by bequest or inheritance) may thereafter

            exercise the Options not theretofore exercised that are exercisable

            on the date your service as a Director terminates within (and only

            within) such period, if any, after your termination date as the

            Committee may determine by action taken not more than sixty (60)

            days after your termination date, which period shall in no event end

            more than five years after your termination date or on ten (10)

            years from the Grant Date, if earlier;

 

      (d)   in the event a Change of Control shall occur, then all the Options

            shall forthwith become fully exercisable whether or not otherwise

            then exercisable; and

 

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      (e)   if your service as a Director terminates for any other reason, the

            Options shall terminate forthwith on the date of termination of your

            service as a Director and shall not be exercised thereafter.

 

3.    Exercise Procedure

 

      (a)   To exercise all or any part of the Options, you (or after your

            death, your estate or any person who has acquired the Options by

            bequest or inheritance) must:

 

            (i)   contact the administrator, Fidelity, by using the FAST or Web

                  system or by speaking to a Fidelity customer service

                  representative and follow the instructions provided;

 

            (ii)  confirm the Option transaction by receiving a confirmation

                  number through the FAST or Web system or by speaking to a

                  Fidelity customer service representative;

 

            (iii) submit full payment of the exercise price for the Option

                  Shares to be purchased on exercise of the Options:

 

                  -     by check or cash; or

 

                  -     in Shares; or

 

                  -     in a combination of check or cash and Shares; and

 

            (iv)