EXHIBIT 10.8
[MINDSPEED LOGO]
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.
[MINDSPEED LOGO]
(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:
Beginning Ending
--------- ------
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
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
-2-
[MINDSPEED LOGO]
(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) provide, in the case of an exercise of the Options by any
person other than you seeking to exercise the Options, such
documents as Fidelity or the Secretary of Mindspeed shall
require to establish to their satisfaction that the person
seeking to exercise the Options is entitled to do so.
(b) An exercise of the whole or any part of the Options shall be
effective:
(i) if you elect (or after your death, the person entitled to
exercise the Options elects) to pay the exercise price for the
Option Shares entirely by check or cash, (i) upon confirmation
of your transaction by using the FAST or Web system or by
speaking to a Fidelity customer service representative and
full payment of the exercise price and withholding taxes (if
applicable) are received by Fidelity within three (3) business
days following the confirmation; and (ii) receipt of any
documents required pursuant to Section 3(a)(iv); and
(ii) if you elect (or after your death, the person entitled to
exercise the Options elects) to pay the exercise price of the
Option Shares in Shares or in a combination of Shares and
check or cash, (i) upon confirmation of your transaction by
using the FAST or Web system or by speaking to a Fidelity
customer service representative and full payment of the
exercise price (as defined in Section 3(d)(i)) and withholding
taxes (if applicable) are received
-3-
[MINDSPEED LOGO]
by Fidelity within three (3) business days following the
confirmation; and (ii) receipt of any documents required
pursuant to Section 3(a)(iv).
(c) If you choose (or after your death, the person entitled to exercise
the Options chooses) to pay the exercise price for the Option Shares
to be purchased on exercise of any of the Options entirely by check
or cash, payment must be made by:
- delivering to Fidelity a check or cash in the full
amount of the exercise price for those Option Shares; or
- arranging with a stockbroker, bank or other financial
institution to deliver to Fidelity full payment, by
check, cash or (if prior arrangements are made with
Fidelity) by wire transfer, of the exercise price of
those Option Shares.
In either event, in accordance with Section 3(e), full payment of
the exercise price for the Option Shares purchased must be made
within three (3) business days after the exercise has been conducted
and confirmed through the FAST or Web system or by speaking to a
Fidelity customer service representative.
(d) (i) If you choose (or after your death, the person entitled to
exercise the Options chooses) to use already-owned Shares to
pay all or part of the exercise price for the Option Shares to
be purchased on exercise of any of the Options, you (or after
your death, the person entitled to exercise the Options) must
deliver to Fidelity one or more certificates (and executed
stock powers), or authorize the book-entry transfer to
Mindspeed of Shares, representing:
- at least the number of Shares whose value, based on the
closing price of the Shares on the NASDAQ reporting
system on the day you have exercised your Options
through the FAST or Web system or by speaking to a
Fidelity customer service representative, equals the
exercise price for those Option Shares; or
- any lesser number of Shares you desire (or after your
death, the person entitled to exercise the Options
desires) to use to pay the exercise price for those
Option Shares and a check or cash in the amount of such
exercise price less the value of the Shares delivered,
based on the closing price of the Shares on the NASDAQ
reporting system on the day you have exercised your
Options through the FAST or Web system or by speaking to
a Fidelity customer service representative.
In the event you are using Shares acquired from a Mindspeed
benefit plan, including but not limited to a stock option
plan, restricted stock plan, performance share plan and
employee stock purchase plan, these Shares must have been held
for a minimum of six (6) months from the date of
-4-
[MINDSPEED LOGO]
acquisition. You will be required to provide proper
documentation attesting to the fact that the Shares used to
pay all or part of the exercise price for the Option Shares
are mature Shares. In the event you are using Shares purchased
on the open market, there is no required holding period.
(ii) Fidelity will advise you (or any other person who, being
entitled to do so, exercises the Options) of the exact number
of Shares, valued in accordance with Section 4 of the Plan at
the closing price on the NASDAQ reporting system on the
effective date of exercise under Section 3(a)(ii), and any
funds required to pay in full the exercise price for the
Option Shares purchased. In accordance with Section 3(e), you
(or such other person) must pay, by check or cash, in Shares
or in a combination of check or cash and Shares, any balance
required to pay in full the exercise price of the Option
Shares purchased within three (3) business days following the
confirmation date of such exercise of the Options under
Section 3(a)(ii).
(iii) Notwithstanding any other provision of this Stock Option
Agreement, the Secretary of Mindspeed may limit the number,
frequency or volume of successive exercises of any of the
Options in which payment is made, in whole or in part, by
delivery of Shares pursuant to this subparagraph (d) to
prevent unreasonable pyramiding of such exercises.
(e) An exercise conducted and confirmed through the FAST or Web system
or by speaking to a Fidelity customer service representative,
whether or not full payment of the exercise price for the Option
Shares is date of by Fidelity, shall constitute a binding
contractual obligation by you (or the other person entitled to
exercise the Options) to proceed with and complete that exercise of
the Options (but only so long as you continue, or the other person
entitled to exercise the Options continues, to be entitled to
exercise the Options on that date). By your acceptance of this Stock
Option Agreement, you agree (for yourself and on behalf of any other
person who becomes entitled to exercise the Options) to deliver or
cause to be delivered to Fidelity any balance of the exercise price
for the Option Shares to be purchased upon the exercise pursuant to
the transaction conducted through the FAST or Web system or by
speaking to a Fidelity customer service representative required to
pay in full the exercise price for those Option Shares, that payment
being by check, cash, wire transfer, in Shares or in a combination
of check or cash and Shares, on or before the later of the third
(3rd) business day after the date on which you confirm the
transaction through the FAST or Web system or by speaking to a
Fidelity customer service representative. If such payment is not
made, you (for yourself and on behalf of any other person who
becomes entitled to exercise the Options) authorize Mindspeed, in
its discretion, to set off against salary payments or other amounts
due or which may become due you (or the other person entitled to
exercise the Options) any balance of the exercise price for those
Option Shares remaining unpaid thereafter.
(f) A book-entry statement representing the number of Option Shares
purchased will be issued as soon as practicable (i) after Fidelity
has received full payment therefor or
-5-
[MINDSPEED LOGO]
(ii) at Mindspeed's or Fidelity's election in their sole discretion,
after Mindspeed or Fidelity has received (x) full payment of the
exercise price of those Option Shares and (y) any reimbursement in
respect of withholding taxes due pursuant to Section 5.
4. Transferability
You are not entitled to transfer the Options except (i) by will or by the
laws of descent and distribution; or (ii) by gift to any member of your
immediate family or to a trust for the benefit of one or more members of
your immediate family; provided, however, that no transfer pursuant to
this clause (ii) shall be effective unless you have notified Mindspeed's
Office of the Secretary (Attention: Stock Administration) in writing
specifying the Option or Options transferred, the date of the gift and the
name and Social Security or other Taxpayer Identification Number of the
transferee. During your lifetime, only you are entitled to exercise the
Options unless you have transferred any Option in accordance with this
paragraph to a member of your immediate family or a trust for the benefit
of one or more members of your immediate family, in which case only that
transferee (or the legal representative of the estate or the heirs or
legatees of that transferee) shall be entitled to exercise that Option.
For purposes of this paragraph, your "immediate family" shall mean your
spouse and natural, adopted or step-children and grandchildren.
5. Withholding
Mindspeed or Fidelity shall have the right, in connection with the
exercise of the Options in whole or in part, to deduct from any payment to
be made by Mindspeed or Fidelity under the Plan an amount equal to the
taxes required to be withheld by law with respect to such exercise or to
require you (or any other person entitled to exercise the Options) to pay
to it an amount sufficient to provide for any such taxes so required to be
withheld. By your acceptance of this Stock Option Agreement, you agree
(for yourself and on behalf of any other person who becomes entitled to
exercise the Options) that if Mindspeed or Fidelity elects to require you
(or such other person) to remit an amount sufficient to pay such
withholding taxes, you (or such other person) must remit that amount
within three (3) business days after the confirmation of the Option
exercise (Section 3(a)(ii)). If such payment is not made, Mindspeed, in
its discretion, shall have the same right of set-off with respect to
payment of the withholding taxes in connection with the exercise of the
Option as provided under Section 3(e) with respect to payment of the
exercise price.
6. Rights as Shareowner
You will not have any rights as a shareowner with respect to any Option
Shares unless and until you become the holder of such Option Shares on the
books and records of Mindspeed.
-6-
[MINDSPEED LOGO]
7. Headings
The section headings contained in these Stock Option Terms and Conditions
are solely for the purpose of reference, are not part of the agreement of
the parties and shall in no way affect the meaning or interpretation of
this Stock Option Agreement.
8. References
All references in these Stock Option Terms and Conditions to Sections,
paragraphs, subparagraphs or clauses shall be deemed to be references to
Sections, paragraphs, subparagraphs and clauses of these Stock Option
Terms and Conditions unless otherwise specifically provided.
9. Entire Agreement
This Stock Option Agreement and the Plan embody the entire agreement and
understanding between Mindspeed and you with respect to the Options, and
there are no representations, promises, covenants, agreements or
understandings with respect to the Options other than those expressly set
forth in this Stock Option Agreement and the Plan.
10. Applicable Laws and Regulations
This Stock Option Agreement and Mindspeed's obligation to issue Option
Shares hereunder are governed by the laws of Delaware and the Federal law
of the United States.
-7-
