Exhibit 10.1
LSI CORPORATION INCENTIVE
PLAN
1. Purposes of the Plan . The
purpose of the LSI Corporation Incentive Plan is to motivate and
reward Participants by making a significant portion of their cash
compensation directly dependent upon achieving performance goals
that further the Company’s business and strategic objectives.
It is the Company’s intention that the compensation paid
hereunder will qualify as “performance-based” within
the meaning of Section 162(m) of the Internal Revenue Code of 1986,
and will thereby be fully deductible by the Company.
2. Definitions .
(a) “Affiliate” means any
corporation or other entity (including, but not limited to,
partnerships and joint ventures) controlled by the
Company.
(b) “Actual Award” means, as to any
Performance Period, the actual award, if any, payable to a
Participant, as determined pursuant to Section 6 for a
Performance Period. Each Actual Award is determined by a Payout
Formula for a Performance Period, subject to the Committee’s
authority under Section 8(d) to reduce the Award otherwise
payable.
(c) “Board” means the Board of
Directors of the Company.
(d) “CEO” means the chief executive
officer of the Company.
(e) “Committee” means the
Compensation Committee of the Board, or a sub-committee of the
Compensation Committee, which shall consist solely of two or more
members of the Board who qualify as “outside directors”
within the meaning of Section 162(m).
(f) “Company” means LSI
Corporation.
(g) “Determination Date” means
the latest possible date that will not jeopardize a Target Award or
an Actual Award’s qualification as performance-based
compensation under Section 162(m).
(h) “Earnings Per Share” means,
as to any Performance Period, the Company’s earnings per
share, determined in accordance with GAAP or such other basis
determined by the Committee.
(i) “Employee” means any
employee of the Company or of an Affiliate, whether such employee
is so employed at the time the Plan is adopted or becomes so
employed subsequent to the adoption of the Plan.
(j) “GAAP” means generally accepted
accounting principles in the United States.
(k) “Maximum Award” means as to
any Participant during any period of three (3) consecutive Plan
Years, $9,000,000.
(l) “Operating Income” means as
to any Performance Period, the Company’s operating income,
determined in accordance with GAAP or such other basis determined
by the Committee.
(m) “Participant” means as to
any Performance Period, an Employee who has been selected by the
Committee for participation in the Plan for that Performance
Period.
(n) “Payout Formula” means the
formula or payout matrix established by the Committee pursuant to
Section 7 in order to determine the Actual Awards, if any, to
Participants. The formula or matrix may differ from Participant to
Participant.
(o) “Performance-Based
Compensation” means compensation that is intended to qualify
as “performance-based compensation” within the meaning
of Section 162(m).
(p) “Performance Goals” means
the goal(s) (or combined goal(s)) determined by the Committee (in
its discretion) to be applicable to a Participant for an award for
a Performance Period. As determined by the Committee, the
Performance Goal(s) for any award applicable to a Participant may
provide for a targeted level or levels of achievement using one or
more of the following measures: (a) Earnings Per Share,
(b) Operating Income, (c) Profit, (d) Return On
Equity, (e) Revenue and (f) Total Shareholder Return.
Performance Goals may differ from Participant to Participant,
Performance Period to Performance Period and from award to award.
Any criteria used may be measured, as applicable, (i) in
absolute terms, (ii) in relative terms (including, but not limited
to, passage of time and/or against another company or companies),
(iii) on a per-share basis, (iv) against the performance
of the Company as a whole or a segment of the Company and/or
(v) on a pre-tax or after-tax basis. Prior to the
Determination Date, the Committee may determine that any element(s)
normally included in or excluded from the applicable measures shall
be included in or excluded from the calculation of any Performance
Goal with respect to any Participants, whether or not such
determinations result in any Performance Goal being measured on a
basis other than GAAP.
(q) “Performance
Period” means any Plan Year or such other shorter or
longer period, as determined by the Committee in its sole
discretion. Unless the Committee determines otherwise,
the Performance Period for a Participant shall be a Plan
Year.
(r) “Plan” means this LSI
Corporation Incentive Plan.
(s) “Plan Year” means the
Company’s fiscal year.
(t) “Profit” means as to any
Performance Period, the Company’s income, determined in
accordance with GAAP or such other basis determined by the
Committee.
(v) “Return On Equity”
means as to any Performance Period, the percentage equal to the
Company’s Profit divided by average shareholder’s
equity, determined in accordance with GAAP or such other basis
determined by the Committee.
(w) “Revenue” means as to any
Performance Period, the Company’s revenues determined in
accordance with GAAP or such other basis determined by the
Committee.
(x) “Section 162(m)” means
Section 162(m) of the Internal Revenue Code of 1986, as amended, as
that Section may be interpreted from time to time by the Internal
Revenue Service, whether by regulation, notice or
otherwise.
(y) “Section 409A” means
Section 409A of the Internal Revenue Code of 1986, as amended, as
that Section may be interpreted from time to time by the Internal
Revenue Service, whether by regulation, notice or
otherwise.
(z) “Shares” means shares of
the Company’s common stock.
(aa) “Target Award” means the
target award payable under the Plan to a Participant for the
Performance Period, expressed as a percentage of his or her base
salary or a specific dollar amount, as determined by the Committee
in accordance with Section 6.
(bb) “Total Shareholder Return”
means as to any Performance Period, the total return (based on
change in share price and taking into account reinvestment of any
dividends) of a Share.
3. Administration
of
