Marvell Technology Group (MRVL)

Governance of Executive Compensation Program

Role of the Executive Compensation Committee

The executive compensation committee of our board of directors (referred to in this discussion as the executive compensation committee) has been charged to act on behalf of our board of directors to fulfill its responsibilities to set and oversee the compensation of our executive officers. With respect to our named executive officers, the executive compensation committee reviews and approves: (i) annual base salaries; (ii) annual incentive compensation; (iii) long-term incentive compensation (in the form of equity awards); (iv) employment, severance and change-in-control agreements; and (v) other compensation and benefits, if any.

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Committee Interaction with Management

In carrying out its responsibilities, the executive compensation committee works with Dr. Sehat Sutardja, our President and Chief Executive Officer, and Reid Linney, our Vice President of Human Resources, in determining executive compensation. Dr. Sehat Sutardja, with the assistance of Mr. Linney, assesses the performance and submits recommendations with respect to the compensation of the other executive officers that are given to the executive compensation committee for their review and approval. In addition, Dr. Sehat Sutardja and Mr. Linney provided assistance in the negotiation of the compensation of Mr. Hosein, whose compensation package was then approved by the executive compensation committee prior to the commencement of Mr. Hosein’s employment with us, subject to our board of directors’ process for reviewing his equity compensation, as described below. Subsequent to his accepting the added responsibility of Interim Chief Operating Officer in October 2008, Mr. Hosein has participated with Dr. Sehat Sutardja and Mr. Linney in the discussions regarding the compensation of the other named executive officer. With respect to his own compensation, Dr. Sehat Sutardja did not submit recommendations to the executive compensation committee nor did he participate in the deliberations regarding his own compensation. However, the executive compensation committee discussed Dr. Sehat Sutardja’s proposed compensation package with him to obtain his feedback. The final decision for the compensation of Dr. Sehat Sutardja was determined solely by the executive compensation committee, in its discretion, subject to our board of directors’ process for reviewing his equity compensation, as described below.

Committee Process

In fiscal 2009, the special committee regarding derivative litigation of our board of directors recommended several corporate governance reforms to our board of directors. One of these recommendations was that our full board of directors be involved in determining the equity compensation of our named executive officers. Our board of directors approved this recommendation, so that our current process, including the one used in our executive equity compensation decisions, now consists of a three-step process for the approval of executive equity compensation decisions. First, the executive compensation committee develops recommendations regarding the equity compensation of the named executive officers for our board of directors’ consideration. Our board of directors then reviews and recommends the equity compensation for approval (with any interested directors abstaining from voting) by the executive compensation committee. Finally, as required to comply with several regulatory requirements, the executive compensation committee approves the final recommendations of our board of directors for the equity compensation of our named executive officers.

The executive compensation committee reviews the compensation of the named executive officers annually. Typically, at the time of the review, the executive compensation committee evaluates our financial results and assesses the named executive officers’ performance for the prior fiscal year (which includes the assessment and recommendation of Dr. Sehat Sutardja for the other executive officers). Based on its evaluation and these assessments, the executive compensation committee then determines whether any adjustments to base salaries are appropriate, determines the payouts for the prior fiscal year’s annual incentive compensation plans and grants equity awards.

For fiscal 2009, the executive compensation committee finalized its review of named executive officer performance for fiscal 2008, which ended February 2, 2009, and made its executive compensation decisions in December 2008, the last quarter of fiscal 2009. The review of performance and compensation was completed late in fiscal 2009 because the executive compensation review in fiscal 2008 occurred in the last quarter of fiscal 2008, so the executive compensation committee did not believe it was necessary to review executive compensation earlier in fiscal 2009.

Committee Membership and Meetings

During fiscal 2009, Dr. Paul Gray served as the executive compensation committee’s chair until his retirement from our board of directors in April 2008. At that time, Dr. Juergen Gromer became the chairman of

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the executive compensation committee and Mr. Arturo Krueger became a member of the committee. In July 2008, Dr. John G. Kassakian was appointed to our board of directors and became a member of the executive compensation committee. In fiscal 2009, all executive compensation committee members met the “independent director” definition of the Nasdaq rules; the “non-employee director” definition of Rule 16b-3 under Section 16 of the Exchange Act; and the “outside director” definition of Section 162(m) of the Internal Revenue Code.

The executive compensation committee holds regular monthly meetings and meets additionally as often as it deems necessary to carry out its responsibilities. The executive compensation committee met 22 times in fiscal 2009.

Use of External Advisors

Beginning in March 2006 and continuing through fiscal 2009, the executive compensation committee has engaged Compensia, Inc., a national executive compensation consulting firm, to provide it with advice and market data relating to executive compensation. Compensia serves at the discretion of the executive compensation committee. Other than its engagement with the executive compensation committee, Compensia did not provide any services to us in fiscal 2009 nor did Compensia receive any compensation other than for the services provided to the executive compensation committee described below.

In fiscal 2009, Compensia provided the following assistance to the executive compensation committee:

Governance of Executive Compensation Program

    Role of the Executive Compensation Committee

        The executive compensation committee of our board of directors (referred to in this discussion as the executive compensation committee) has been charged to act on behalf of our board of directors to fulfill its responsibilities to set and oversee the compensation of our executive officers. With respect to our named executive officers, the executive compensation committee reviews and approves: (i) annual base salaries; (ii) annual incentive compensation; (iii) long-term incentive compensation; (iv) employment, severance and change-in-control agreements; and (v) other compensation and benefits, if any.

Committee Interaction with Management

        In carrying out its responsibilities, the executive compensation committee works with Dr. Sehat Sutardja, our Chief Executive Officer, in determining executive compensation. With respect to Mr. Tate and Mr. Rashkin, our two former interim Chief Financial Officers, Dr. Sehat Sutardja provided his review of their performance, and his recommendations for their compensation. Dr. Sehat Sutardja provided assistance in the negotiation of the compensation package of Mr. de Urioste, our current interim Chief Financial Officer, which package was then approved by the executive compensation committee, all prior to the commencement of Mr. de Urioste's employment with us. With respect to his own compensation, Dr. Sehat Sutardja did not submit recommendations to the executive compensation committee or participate in the deliberations regarding his compensation. However, the executive compensation committee discussed Dr. Sehat Sutardja's proposed compensation package with him to obtain his feedback. The final decision for the compensation of Dr. Sehat Sutardja was determined solely by the executive compensation committee, in its discretion, subject to our board of directors' review process for his equity compensation, as described below. For the past several years, including fiscal 2008, Dr. Sehat Sutardja has not been directly involved in determining the equity compensation for Ms. Dai, our former Chief Operating Officer, or Dr. Pantas Sutardja, our Chief Technology Officer, because their stock option grants were a fixed percentage of his stock option grant. The executive compensation committee determined the appropriate fixed percentages for each of them, with feedback from Dr. Sehat Sutardja, in fiscal 2006, which ended January 28, 2006, and the executive compensation committee did not change such fixed percentages in fiscal 2007, which ended January 27, 2007, and fiscal 2008.

Committee Process

        In fiscal 2008, the special litigation committee of our board of directors recommended several corporate governance reforms to our board of directors. One of these recommendations was that our full board of directors be involved in determining the equity compensation of our named executive officers. Our board of directors approved this recommendation, so that our current process, including the one used in our December 2007 compensation decisions, is for the executive compensation committee to develop proposals regarding the equity compensation of our named executive officers for our board of directors' consideration and approval for recommendation to the executive compensation committee (with any interested directors abstaining from voting). Thereafter, as required to comply with several regulatory requirements, the executive compensation committee has final approval over the recommended compensation proposals for our named executive officers.

        It is the executive compensation committee's goal to review the compensation of our named executive officers in the first quarter of each fiscal year. At this time, the executive compensation committee evaluates our financial results and assesses our named executive officers' performance for the prior fiscal year (which includes the assessment and recommendation of Dr. Sehat Sutardja, our Chief Executive Officer, where provided). Based on its evaluation and these assessments, the executive compensation committee then determines whether any adjustments to base salaries are appropriate,

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determines the payouts for the prior fiscal year's cash incentive plans and grants equity awards. However, for fiscal 2008, the executive compensation committee delayed all decisions on the compensation of our named executive officers until after the completion of the investigation of our stock option accounting practices. Because of this delay, the executive compensation committee reviewed performance for fiscal 2007 and made its decisions regarding executive compensation in December 2007, rather than March 2007. The executive compensation committee anticipates that it will finalize its review of executive officer performance for fiscal 2008 and make its executive compensation decisions in the second quarter of fiscal 2009.

Committee Membership and Meetings

        During fiscal 2008, Dr. Paul Gray served as the executive compensation committee's chair. From the start of fiscal 2008 until late October 2007, Mr. Douglas King also served on the executive compensation committee. In late October, Dr. Juergen Gromer and Mr. Michael Sophie joined the executive compensation committee. Mr. Sophie resigned from the executive compensation committee in early December while Dr. Gromer has remained on the executive compensation committee. In April 2008, Dr. Gray retired from our board of directors and the executive compensation committee. Also in April 2008, Dr. Gromer became the chairman of the executive compensation committee and Mr. Arturo Krueger became a member of the executive compensation committee. In fiscal 2008, all executive compensation committee members met the "independent director" definition of the Nasdaq listing standards; the "non-employee director" definition of Rule 16b-3 under Section 16 of the Exchange Act; and the "outside director" definition of Section 162(m) of the Internal Revenue Code.

        The executive compensation committee holds regular monthly meetings and, in addition, meets as often as it deems necessary to carry out its responsibilities. The executive compensation committee met 24 times in fiscal 2008 and also acted twice by unanimous written consent.

Use of External Advisors

        Beginning in March 2006 and continuing through fiscal 2008, the executive compensation committee engaged Compensia, Inc., a national executive compensation consulting firm, to provide it with advice, information and recommendations relating to executive compensation. Compensia serves at the discretion of the executive compensation committee. Other than its engagement with the executive compensation committee, Compensia did not provide any services to us in fiscal 2008 nor did Compensia receive any compensation other than for the services provided to the executive compensation committee described above.

        In fiscal 2008, Compensia provided the following assistance to the executive compensation committee:

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Reviewed and made recommendations related to our named executive officers' base salary, annual incentive compensation awards, and long-term incentive compensation levels and program structures;



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Assisted in the drafting of the Compensation Disclosure and Analysis included in the proxy statement filed with the SEC on September 14, 2007;



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Reviewed and made recommendations related to the compensation levels and program structures for our board of directors;



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Developed recommendations regarding stock ownership guidelines;



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Reviewed compensation practices for special committees investigating option accounting issues; and



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Provided market data on Chief Financial Officer compensation in connection with our search for a new Chief Financial Officer.

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