This excerpt taken from the MRVL 8-K filed May 30, 2008.
Example for Performance Period 2:
Target EPS = $0.40
Actual EPS 2 = $0.35
Since $0.35 < $0.40, 40,000 Segment 2 options will not vest, but will be added to the 40,000 unvested options in Segment 3.
Following the completion of Performance Period 1, the new number of unvested performance-based stock options in any Segment numbered 2 or greater will therefore be equal to 40,000 plus the cumulative number of performance-based stock options from the preceding Performance Periods that remain unvested.