8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 9, 2007

LSI CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	1-10317	94-2712976
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation)		Identification No.)

1621 Barber Lane
Milpitas, California 95035
(Address of principal executive offices, including zip code)

(408) 433-8000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 10.1

EXHIBIT 10.2

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     On May 10, 2007, the Board of Directors elected Timothy Y. Chen to the Board. Mr. Chen is Corporate Vice President and Chief Executive Officer, Greater China Region, of Microsoft Corporation. Mr. Chen has been appointed to the Compensation Committee of the Board of Directors. Upon his election to the Board, Mr. Chen received an option to purchase 30,000 shares of our common stock under our 1995 Director Option Plan. The option has a seven-year term, becomes exercisable in four equal annual installments and has an exercise price per share equal to the closing price of a share of our common stock on the date of grant.

     Also on May 10, 2007, the Board named Gregorio Reyes, a current Director, Chairman of the Board of Directors, succeeding James H. Keyes, who remains a Director.

     In May 2005, we hired Abhijit Talwalkar to be our President and Chief Executive Officer pursuant to an employment agreement that was described in a Current Report on Form 8-K that we filed with the Securities and Exchange Commission on May 24, 2005. In addition to providing for Mr. Talwalkar’s salary, bonus and incentive and equity compensation, the employment agreement contained a number of relocation benefits. These benefits were provided because Mr. Talwalkar did not reside near our headquarters in Milpitas, California.

     The relocation benefits included a $5,000 per month housing allowance and reimbursement of closing and moving costs if Mr. Talwalkar moved to the San Jose area, in each case for the first two years of Mr. Talwalkar’s employment with the company. These amounts are “grossed-up” for taxes so that Mr. Talwalkar receives approximately $5,000 per month after taxes to use for housing expenses and an amount equal to his reimbursable closing and moving costs. Mr. Talwalkar has not relocated to the Milpitas area at this time. On May 9, 2007, the Compensation Committee of the Board of Directors extended these benefits for an additional one year period.

     On May 9, 2007, the Compensation Committee also amended our commuter expense reimbursement policy. This policy provides that the company will reimburse covered expenses incurred by an employee residing more than 100 miles from their primary work location, if the company has approved the employee’s participation in the program. Covered expenses include travel to the primary work location and lodging and meal expenses while at the primary work location. The policy also provides for a tax gross-up for participating employees. One of the amendments was to make the policy available to executive officers of the company.

     The Compensation Committee approved the participation in that program of Mr. Talwalkar (other than for housing expenses); Mr. Phil Brace, Senior Vice President, Corporate Planning and Marketing; and Mr. Jeff Richardson, Executive Vice President, Network and Storage Products Group. A copy of this policy is attached to this report as exhibit 10.2.

Item 9.01 Financial Statements and Exhibits.

Exhibit	Description
10.1	Description of Mr. Talwalkar’s relocation benefits
10.2	LSI Employee Commuter Expense Reimbursement Policy

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LSI CORPORATION
By:	/s/ Jean F. Rankin
	Jean F. Rankin
	Executive Vice President, General Counsel and
	Secretary

Date: May 15, 2007

Exhibit Index

Exhibit	Description
10.1	Description of Mr. Talwalkar’s relocation benefits
10.2	LSI Employee Commuter Expense Reimbursement Policy

EX-10.1

Exhibit 10.1

[Description of Mr. Talwalkar’s relocation benefits]

	Through May 23, 2008, LSI will provide Mr. Talwalkar with:
•	A $5,000 per month housing allowance.
	and
•	Reimbursement of his reasonable and documented closing costs (including the reasonable cost of a broker’s commission) associated with any sale of his home in Oregon and/or purchase of a home in the San Jose, California area, provided that he complies with LSI’s then existing relocation policy, if applicable, and provided that he uses a third party reasonably satisfactory to LSI to handle such sale. LSI will also pay Mr. Talwalkar’s reasonable costs associated with moving his household goods and personal items.

LSI will also make additional payments to him sufficient to pay any federal and state income and employment taxes due as a result of the housing allowance and relocation payments and the additional payments on account of taxes.

EX-10.2

Exhibit 10.2

APPROVALS			Spec Number
		CONTROLLERS
		POLICIES	COPY-REF COPY
			CORP DOC CTRL
			Date: Feb. 1, 2007
SUBJECT:       Employee Commuter Expense Reimbursement Policy

1.	PURPOSE	2
2.	APPROVALS	2
3.	COMMUTER EXPENSE CATEGORIES	2
3.1.	DIRECT COMMUTER TRAVEL EXPENSES	2
3.2.	INDIRECT COMMUTER EXPENSES	2
4.	DIRECT COMMUTER TRAVEL EXPENSE TYPES	2
4.1.1.	SINGLE COMMUTE	2
4.1.2.	MULTI-SEGMENT COMMUTE	2
5.	TAX IMPLICATIONS FOR COMMUTERS	2
5.2.	PAYROLL PROCESSES	3
6.	COMMUTER EXPENSE CALCULATIONS	3
6.1.	SINGLE COMMUTE	3
6.2.	MULTI-SEGMENT COMMUTE	3

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APPROVALS			Spec Number
		CONTROLLERS
		POLICIES	COPY-REF COPY
			CORP DOC CTRL
			Date: Feb. 1, 2007
SUBJECT:       Employee Commuter Expense Reimbursement Policy

1. Purpose

1.1. This policy outlines the process by which expenses will be managed and considered for reimbursement for employees who commute to/from LSI Corp. sites. An employee commuter (referred to herein as the “Commuter”) is a regular fulltime employee whose primary place of residence is more than 100 miles from their primary place of business. Primary place of business is defined as the physical location where an employee spends more than 50% of their hours worked. This policy will outline the reimbursement process and procedures.

2. Approvals

2.1.	To initially establish the commute expense reimbursement benefit, approval must be received from the Vice President of Human Resources (HR VP) and Chief Executive Officer (CEO). Approval for Section 16(b) officers to participate in this policy must first be approved by the Compensation Committee.
2.2.	Once established, Direct Commuter Travel Expenses will be reimbursed though the SAP Travel Expense system and Indirect Commuter Travel reimbursements will be managed by the Payroll department.

3. Commuter Expense Categories

3.1. Direct Commuter Travel Expenses

3.1.1. Direct Commuter Travel Expenses are defined as the expenses incurred by the Commuter to and from their home location to and from their primary place of business. These expenses include: round trip or one way flights to and from their home city to the LSI office, car rental at the LSI site, airport parking expenses at the commuter’s home location, taxi cab fees to or from the Commuter’s home to the airport or to/from the LSI office to the airport, hotel expenses at the LSI location, and personal meals at the LSI location.

3.2. Indirect Commuter Expenses

3.2.1. Indirect Commuter Expenses include: company-paid apartments, any utilities associated with the apartment (e.g., telephone, cable TV, Internet connection, electricity, gas, trash removal, water, association fees, etc.), and company-paid automobile leasing or ownership.

4. Direct Commuter Travel Expense Types

4.1. Direct Commuter Travel Expenses can be broken into two groups: Single Commute and Multi-Segment Commute. Any other kind of travel is referred to as Normal Business Travel.

4.1.1.	Single Commute is defined as a trip directly from the Commuter’s home location to the LSI location without any other stops (aside from a flight connection) on the way to, from, or during the stay at the LSI site. For example: the Commuter’s home residence is located in Phoenix, Arizona and they depart Phoenix on a Monday to their primary place of business, the Milpitas LSI office. The Commuter stays in Milpitas for 4 days and returns home on Thursday. This trip would be categorized as a Single Commute.
4.1.2.	Multi-Segment Commute is defined as a trip whereby the Commuter travels from their home city to their primary place of business as well as conducts other business travel outside their primary business location during the same trip. The order in which these occur does not matter. For example: the Commuter lives in Phoenix, Arizona and makes a trip to Milpitas, their primary place of business, for 2 days, then leaves Milpitas on a trip to New York on company business. The Commuter then leaves New York and flies directly back home to Phoenix. There would be no difference if the Commuter first went to New York, then went to Milpitas, it would still be considered a Multi-Segment Commute.
4.1.3.	Normal Business Travel would be any trip where the Commuter leaves their home and travels to a non-primary place of business and returns back home. For example: our Commuter who lives in Phoenix travels to Boston for a week then returns back home to Phoenix without any stops at their primary place of business in Milpitas.

5. Tax Implications for Commuters

5.1. Direct and Indirect Commuter Travel expenses are a taxable fringe benefit and must be included in the Commuter’s taxable income. Normal Business Travel is non-taxable and is not considered taxable income.

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APPROVALS			Spec Number
		CONTROLLERS
		POLICIES	COPY-REF COPY
			CORP DOC CTRL
			Date: Feb. 1, 2007
SUBJECT:       Employee Commuter Expense Reimbursement Policy

If approved by the HR EVP and CEO, LSI may choose to pay the tax burden for the Commuter by grossing-up the reimbursed commuting expense.

5.2. Section 16(b) officers receiving benefits under this policy must also receive Compensation Committee approval to be eligible for tax gross-up treatment for qualifying expenses as defined in this policy.

5.3. Payroll Processes

5.3.1.	It will be the responsibility of the HR organization to notify the Payroll department of the approval of the applicability of this policy to a new Commuter. HR VP and CEO approval will be required.
5.3.2.	On a quarterly basis, Payroll will track and calculate the Commuter’s Direct and Indirect commuting expenses. These amounts will be added to the Commuter’s taxable income and reflected on their Form W-2 at the end of the calendar year. The amounts will be grossed-up for tax purposes only if previously approved by the HR VP and CEO.

6. Commuter Expense Calculations

6.1. Single Commute

6.1.1. Direct Travel Expenses categorized as Single Commute are considered fully taxable, as a fringe benefit, and will be added to the Commuter’s taxable income and reflected on their Form W-2.

6.2. Multi-Segment Commute

6.2.1. Direct Travel Expenses categorized as Multi-Segment Commute are considered taxable income and are calculated as follows:

6.2.1.1.	For flight expenses, an average flight cost to/from the Commuter’s location is calculated. This amount is subtracted from the price of the multi-segment flight. The average flight cost is considered to be the taxable fringe benefit amount for that trip. The balance is considered a Normal Business Expense and is non-taxable. For example: a Commuter travels from their home in Phoenix to Milpitas (their primary place of business), to New York, then back to Phoenix. The total ticket cost is $800. The average ticket cost to/from Phoenix to Milpitas is $200. Therefore, the taxable amount for this trip is $200 and this amount is added to the Commuter’s taxable income. The balance of $600 is considered a non-taxable business expense.
6.2.1.2.	For parking or transportation to/from the Commuter’s home airport, 33% of the expense is treated as taxable and 67% is non-taxable. For example the Commuter makes a multi-segment trip as defined above. The cost of parking their personal vehicle at the Phoenix airport is $100. The taxable amount is $33 and this amount is added to the Commuter’s taxable income. The balance of $67 is a non-taxable business expense. This also applies if the Commuter took a taxi to/from their home airport.
6.2.1.3.	The following expenses incurred while in the primary place of business on a multi-segment trip are considered fully taxable and will be added to the Commuter’s taxable income: rental cars, hotels, personal meals, transportation to/from the airport(s) near the primary place of business. For example: the Commuter makes a multi-segment trip through Milpitas, their primary place of business. While in Milpitas they rent a car for 3 days and have a personal lunch. 100% of the meal and car rental are taxable. If the Commuter took a taxi from the San Jose airport to the office, then the cab fare would be fully taxable. Any expenses incurred on the multi-segment trip outside of the Commuter’s primary place of business are non-taxable.

6.3. Indirect Commuter expenses are considered a fully taxable as a fringe benefit and will be added to the Commuter’s taxable income.

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