Marvell Technology Group (MRVL)

The principal factors that the Committees took into account in establishing compensation packages for the 2006 fiscal year are described below. Either Committee may, however, in its discretion apply entirely different factors, such as different measures of financial performance, or create different compensation elements, in future fiscal years.

Base Salaries.   The base salary for each of the Company’s executive officers was generally established by the Executive Compensation Committee on the basis of the individual’s level of responsibility and performance, as well as market information and the salaries paid to executive officers of comparable companies in the Company’s industry. The President and Chief Executive Officer is involved in recommending the amount of base salary and stock option awards for the Vice President of Finance and Chief Financial Officer, but the Executive Compensation Committee has final authority for these amounts.

Stock Option Grants.   Because of the direct relationship between the value of a stock option and the stock price, both the Executive Compensation and Stock Option Committees believe that options motivate the Company’s executive officers and employees  who have been granted options to manage the Company

15

in a manner that is consistent with shareholder interests. Stock options are granted to reward the Company’s executive officers on a long-term basis and to align the interests of these executive officers with those of its shareholders. Stock options may be granted by the Executive Compensation Committee to the Company’s executive officers, and the Stock Option Committee may grant other employees stock options. All such grants are currently made under the Company’s Amended and Restated 1995 Stock Option Plan. In fiscal year 2006, the Company did not offer a long-term cash incentive plan to the Company’s executive officers.

Stock option grants are intended to focus the attention of the recipient on the Company’s long-term performance, which the Company believes results in improved shareholder value, and to retain the services of the Company’s executive officers and employees in a competitive job market by providing significant long-term earnings potential. To this end, stock options granted by both Committees generally vest and become fully exercisable over a period of years. Initial option grants typically vest as follows: 20% of the total shares underlying the option vest on the first anniversary of the vesting commencement date and 1.67% of the total shares vest on the monthly anniversary of the vesting commencement date thereafter. Grants made in connection with annual compensation reviews may vest on a different schedule. Options have an exercise price equal to the fair market value of a share of the Company’s common stock on the grant date thereof. The principal factors considered by the Executive Compensation Committee in granting stock options to the Company’s executive officers are the executive officer’s prior performance, prior stock option grants, level of responsibility and other compensation, the executive officer’s ability to influence the Company’s long-term growth and profitability and comparison with comparable awards granted to similar officers in comparable companies in the Company’s industry.  Similarly, the principal factors considered by the Stock Option Committee in granting stock options to non-executive officer employees of the Company are the employee’s prior performance, prior stock option grants, level of responsibility and other compensation, the employee’s ability to influence the Company’s long-term growth and profitability, and comparison with comparable awards granted to similar situated employees in comparable companies in the Company’s industry.

For fiscal year 2006, the compensation package of Dr. Sehat Sutardja, Ms. Weili Dai and Dr. Pantas Sutardja each consisted of a base salary only. For fiscal year 2006, the compensation package of Mr. Hervey consisted of: (i) a base salary; and (ii) an award of stock options under the Company’s stock option plan. In addition, Dr. Sehat Sutardja, Ms. Weili Dai and Dr. Pantas Sutardja received $58,750.00, $250.00 and $10,250.00, respectively, pursuant to the Company’s Patent Award Program. All employees of the Company, whether or not they are one of the Company’s executive officers, are eligible to receive awards under the Company’s Patent Award Program upon  (i) the submission to the Company of a bona fide invention disclosure, (ii) the filing of a patent application with the U.S. Patent and Trademark Office on such invention disclosure, or (iii) the issuance of a U.S. patent from the U.S Patent and Trademark Office on such patent application. The Executive Compensation Committee is currently in the process of reviewing the compensation for Dr. Sehat Sutardja, Weili Dai and Dr. Pantas Sutardja, and intends to reflect, in any adjustments or stock option grants made as a result of this process, the fact that no salary adjustments or stock option grants were made in either fiscal year 2005 or fiscal year 2006 for those individuals.

Annual Salary and Incentive Compensation Program

        The principal factors that the Committees took into account in establishing compensation packages for the 2005 fiscal year are described below. Either Committee may, however, in its discretion apply entirely different factors, such as different measures of financial performance, or create different compensation elements, in future fiscal years.

        Base Salaries.    The base salary for each of the Company's executive officers was generally established by the Executive Compensation Committee on the basis of the individual's level of responsibility and performance, as well as market information and the salaries paid to executive officers of comparable companies in the Company's industry. The President and Chief Executive Officer is involved in recommending the amount of base salary and stock option awards for the Vice President of Finance and Chief Financial Officer, but the Executive Compensation Committee has final authority for these amounts.

        Stock Option Grants.    In fiscal year 2005, the Company did not offer a long-term cash incentive plan to the Company's executive officers. Stock options are granted to reward the Company's executive officers on a long-term basis and to align the interests of these executive officers with those of its shareholders. Stock options may be granted by the Executive Compensation Committee to the Company's executive officers, and the Stock Option Committee may grant other employees stock options under the Company's Amended and Restated 1995 Stock Option Plan. Because of the direct relationship between the value of an option and the stock price, both the Executive Compensation and Stock Option Committees believe that options motivate the Company's executive officers and employees granted options to manage the Company in a manner that is consistent with shareholder interests. Stock option grants are intended to focus the attention of the recipient on the Company's long-term performance, which the Company believes results in improved shareholder value, and to retain the services of the Company's executive officers and employees in a competitive job market by providing significant long-term earnings potential. To this end, stock options granted by both Committees generally vest and become fully exercisable over a period of years. Initial option grants typically vest as follows: 20% of the total shares underlying the option vest on the first anniversary of the vesting commencement date and 1.67% of the total shares vest on the monthly anniversary of the vesting commencement date thereafter. Options have an exercise price equal to the fair market value of a share of the Company's common stock on the grant date thereof. The principal factors considered by the Executive Compensation Committee in granting stock options to the Company's executive officers are the executive officer's prior performance, prior stock option grants, level of responsibility and other compensation, the executive officer's ability to influence the Company's long-term growth and profitability and comparison with comparable awards granted to similar officers in comparable companies in the Company's industry. Similarly, the principal factors considered by the Stock Option Committee in granting stock options to non-executive officer employees of the Company are the employee's prior performance, prior stock option grants, level of responsibility and other compensation, the employee's ability to influence the Company's long-term growth and profitability, and comparison with comparable awards granted to similar situated employees in comparable companies in the Company's industry.

        For fiscal year 2005, the compensation package of Dr. Sehat Sutardja, Ms. Weili Dai and Dr. Pantas Sutardja each consisted of a base salary only. For fiscal year 2005, the compensation package of Mr. Hervey consisted of: (i) a base salary; and (ii) an award of stock options under the

20

Company's stock option plans. In addition, Dr. Sehat Sutardja and Dr. Pantas Sutardja received $36,000 and $30,000, respectively, pursuant to the Company's Patent Award Program. All employees of the Company, whether or not they are one of the Company's executive officers, are eligible to receive awards under the Company's Patent Award Program upon: i) the submission to the Company of a bona fide invention disclosure; ii) the filing of a patent application with the U.S. Patent and Trade Mark Office on such invention disclosure; or, iii) the issuance of a U.S. patent from the U.S Patent and Trademark Office on such patent application.