Marvell Technology Group (MRVL)

Annual Incentive Compensation

For fiscal 2009, as a result of the changing global economic environment, the executive compensation committee decided that no annual performance-based incentive awards would be paid to the named executive officers.

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Table of Contents

Mr. Hosein received a sign-on bonus of $350,000 in connection with the acceptance of our offer of employment. The executive compensation committee determined that this payment was necessary to induce Mr. Hosein to accept our offer of employment. The payment is conditioned on Mr. Hosein remaining employed with us for two years. If, prior to the expiration of this two-year period, Mr. Hosein voluntarily terminates his employment with us without good reason or he is terminated by us for cause or for performance-related issues, he is required to repay a pro-rated portion of the sign-on bonus. In addition, as part of our employment negotiations with Mr. Hosein, we agreed that he would be eligible for a target bonus equal to 80% of his base salary. Pursuant to the terms of his employment agreement, 50% of this bonus would be earned based on the company’s overall performance and the remaining 50% would be earned based on achievement of mutually agreed upon performance metrics. Because of the challenging economic environment faced by the company at the end of fiscal 2009, the executive compensation committee and Mr. Hosein did not establish performance metrics for fiscal 2009 and agreed that Mr. Hosein would not receive a performance-based annual incentive award for fiscal 2009. For a further description of Mr. Hosein’s employment agreement, please refer the section entitled “Employment Contracts and Change-in-Control Arrangements” below.

In prior years, the executive compensation committee had granted to Dr. Sehat Sutardja and Dr. Pantas Sutardja stock options in lieu of participation in an annual cash incentive award plan. In December 2008, the executive compensation committee decided that, beginning in fiscal 2010, Dr. Sehat Sutardja and Dr. Pantas Sutardja will participate in our executive annual cash incentive compensation plan. The executive compensation committee believes that this was appropriate to provide a common focus within the executive team on both short-term and long-term goals. Under our executive annual cash incentive compensation plan, bonuses are determined at the end of the fiscal year based on a review of each executive’s performance and contributions to us. The executive compensation committee determines the amount of any bonus for Dr. Sehat Sutardja based on its judgment of his and our performance. For the other executives, Dr. Sehat Sutardja provides recommendations to the executive compensation committee on the performance of each executive and us and the amount of the bonus, based on his judgment. The executive compensation committee then reviews the recommendations provided by Dr. Sehat Sutardja and determines whether to approve a bonus to other executives.