Centillium Communications, Inc. 2006 Executive Bonus Plan

EXHIBIT 10.54

Centillium Communications, Inc.

2006

Executive Bonus Program

Program Description

Centillium Communications, Inc.

Executive Bonus Program

Program Description

The Centillium Communications, Inc. Executive Bonus Program (the Program) is intended to reward certain company executives for achievement of stated business objectives.

The Program is based on a plan year (January 1 through December 31). Payment for results achieved under the Program will be made annually, normally by March 1 of the year following the plan year.

To participate in the Program, an employee must be serving in a designated executive position. These positions carry titles of Vice President, General Manager, Chief Financial Officer, Chief Technical Officer or Chief Executive Officer. Final determination of whether an executive may participate in the Program rests with the Chief Executive Officer (CEO) and the Board of Directors (the Board).

In order to participate in the Program and to receive payment according to the Program, each eligible executive must sign an agreement form that describes the performance items and weightings upon which payment, if any, will be based.

Newly-hired executives will be eligible to participate in the Program based on the decision of the CEO and the Board. Executives hired or promoted into an executive position during the plan year will be eligible to receive a prorated bonus amount based on achievement of performance and time employed at Centillium.

Executives who terminate employment with Centillium during the plan year, or before payment is made, will not be eligible to receive any payment under the Program.

Bonus target amounts are based on a designated percentage of each eligible executive's base salary, as determined by the CEO and the Board. Bonus payments will be prorated to account for any changes in an executive's base salary during the plan year.

Program Structures

Each executive will have their bonus amount(s) weighted as follows:

Company Revenue will be the annual revenue reported in Centillium's annual filing with the Securities & Exchange Commission (SEC).

Company Earnings will be the annual Net Profit/Loss reported in Centillium's annual filing with the SEC.

The specific Key Corporate Initiative(s) and weighting will be determined by the CEO and the Board.

Any financial measure involved in the three performance areas noted above shall be without regard to the impact of FAS 123R.

Prior to the beginning of the plan year, or as soon as practicable after the start of the plan year, the CEO and the Board will establish performance targets for each measured item. Such performance targets are listed in Attachment 3.

For the Company Revenue and Company Earnings:

Performance Targets (Contd.)

For the Key Corporate Initiatives:

For the Company Revenue and Company Earnings items, the performance level relative to the target will be multiplied by the item weighting. The result of this calculation will be multiplied by the executive's bonus target amount to determine the payout for each item. The performance level will be calculated based on the description given earlier using a linear scale between various target levels.

For the Key Corporate Initiatives, performance for each specific initiative that meets or exceeds the target will be paid at 100%. The overall payout for the Key Corporate Initiatives item will be based on the results of the met targets (and multiplied by the category weighting, if there is such a category weighting). If there is no category weighting, the number of met initiatives will be divided by the total number of initiatives and the quotient will be multiplied by the item weighting.

Payment Calculation (Contd.)

The total annual bonus amount paid to each eligible executive under the Program is determined by adding together the payout amounts for each item, calculated as described above.

The CEO is responsible for the administration and interpretation of the Program. Questions or disputes regarding the Program should be directed to the Vice President of Human Resources who will work with the CEO to resolve such questions or disputes. No changes to the Program will be permitted without the written authorization of the CEO. The Company reserves the right to change, modify or eliminate all or any part(s) of the plan at any time in its discretion.

*** Confidential material redacted and filed separately with the Commission.

Attachment 1

List of Program Participants for 2006

[Effective July 1, 2006]

Executives eligible for the Program:

*** Confidential material redacted and filed separately with the Commission.

Attachment 2

2006 Executive Bonus Program

Key Corporate Initiatives

ADSL Product Line

A.) Win *** customer

VDSL Product Line

A.) Successful introduction of *** product

B.) Successful introduction of *** product

C.) Win *** customers;

Optical Product Line

A.) *** expand outside ***

B.) Establish next *** position

C.) Win *** business

VOIP Product Line

A.) Successful introduction of ***

B.) Introduce ***

*** Confidential material redacted and filed separately with the Commission.

Attachment 3

2006 Executive Bonus Program

Revenue and Earning Levels